Oil Prices Slip on Unexpected Storage Build; Amount of Crude in Storage the Highest Since July 4
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Nov 2014: n/a.
Abstract:
Distillate stocks, which include heating oil and diesel fuel, fell by 2.1 million barrels to 114.8 million barrels, the lowest since May 9.
Full text: NEW YORK--Oil prices settled slightly lower Wednesday, paring earlier gains, after weekly U.S. inventory data showed crude supplies unexpectedly climbed last week. U.S. crude-oil stockpiles rose by 2.6 million barrels to 381.1 million barrels in the week ended Nov. 14, the U.S. Energy Information Administration said. Analysts surveyed by The Wall Street Journal had expected stocks to fall by 1 million barrels on the week. The amount of crude in storage is the highest since July 4. "It certainly is not the report the bulls wanted to see to stem the downtrend" in oil prices, said Kyle Cooper, analyst at IAF Advisors in Houston. Oil prices have been falling for months on concerns about ample global supplies, partly because of high U.S. production. This week, futures have held fairly steady as traders watched for indications of whether the Organization of the Petroleum Exporting Countries would cut output to raise prices at its Nov. 27 meeting. Market watchers have become increasingly skeptical in recent weeks that OPEC, and especially top exporter Saudi Arabia, is likely to take action. "With the prospect of production cuts, I think that traders are really reluctant to get very short before the meeting," said Andy Lebow, senior vice president for energy at Jefferies LLC. Short positions are wagers on falling prices. At the same time, Mr. Lebow said, traders are hesitant to bet on rising prices in case OPEC doesn't cut production. The market is "definitely in a holding pattern," Mr. Lebow said. "You may see some real random moves here." Light, sweet oil for December delivery settled down 3 cents at $74.58 a barrel on the New York Mercantile Exchange. The December contract expires at settlement Thursday. The more-actively traded January contract fell 14 cents, or 0.2%, to $74.50 a barrel. Brent fell 37 cents, or 0.5%, to $78.10 a barrel on ICE Futures Europe. In the U.S., domestic oil production fell slightly last week but held above 9 million barrels a day. Production surpassed that level last week for the first time in decades. Gasoline stockpiles rose by 1 million barrels. Analysts surveyed by The Wall Street Journal had predicted stockpiles would rise by 600,000 barrels. Distillate stocks, which include heating oil and diesel fuel, fell by 2.1 million barrels to 114.8 million barrels, the lowest since May 9. Analysts had expected a 1.4-million-barrel weekly decrease. Refining capacity utilization rose by 1.1 percentage points to 91.2%. Analysts had predicted the operating rate would gain 0.3 percentage point in the week. December reformulated gasoline blendstock, or RBOB, settled up 0.06 cent at $2.0438 a gallon. December diesel fell 2.23 cents, or 0.9%, to $2.3590 a gallon, the lowest settlement since Nov. 30, 2010. Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 19, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1625840515
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1625840515?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Technip Proposes $1.83 Billion French Oil-Services Merger; Move Comes Amid Consolidation in Oil-Services Industry
Author: Landauro, Inti; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
PARIS--France's Technip SA has made a preliminary takeover offer of [euro]1.46 billion ($1.83 billion) in cash for smaller French oil-services company CGG, a sign of accelerating consolidation in the sector as falling oil prices have crimped spending by big oil groups.
Full text: PARIS--Technip SA of France has made a preliminary takeover offer of [euro]1.46 billion ($1.83 billion) in cash for smaller French oil-services company CGG SA, a sign of accelerating consolidation in the sector as falling crude prices have crimped spending by large oil producers. CGG, a Paris-listed specialist in exploration equipment and services, said it has rejected the offer. "Conditions to pursue [the approach] weren't met," the company said in a written statement Thursday. "The company isn't for sale," a spokesman added. Technip said it would break up CGG, selling its underground data-collection unit that accounted for roughly 60% of the company's $3.77 billion in revenue last year. The announcement of Technip's approach to CGG comes just days after Halliburton Co. of the U.S. unveiled plans to buy smaller rival Baker Hughes Inc. in a deal valued at $34.6 billion, prompting speculation that more deals in the sector were in the offing. The industry's main competitors are rushing to buy smaller rivals to offset the effects of falling oil prices on their business. Oil-services companies typically provide equipment such as rigs, drill parts and tools, but can also undertake the engineering and construction for pipelines and projects. As oil prices have fallen to below $80 a barrel from more than $100 a barrel earlier this year, large oil companies have shelved expansion their plans for multibillion-dollar projects and shed operations with thin profit margins. Technip provides an array of services, engineering, construction and project management, while CGG focuses on seismic studies and other techniques to help energy companies locate oil and natural-gas reserves. CGG also makes equipment. The two companies have combined revenue of roughly [euro]13 billion and employ about 50,000 people. Technip, which said it first approached CGG on Nov. 10, has offered [euro]8.30 a share in cash, a premium of 27% over CGG's closing share price Wednesday. CGG shares surged 22% to close at [euro]7.95 in Paris on Thursday. Shares in Technip fell 7% to [euro]56.60, also in Paris. Some analysts questioned the logic of the deal given CGG's relatively weak financial position and declining operating profitability, as well as the absence of significant potential cost savings. "I don't think, at this point, Technip's shareholders have anything to win," said Jean-Pierre Dmirdjian, an analyst at London-based brokerage house Liberum. Providers of seismic studies and other exploration services tend to be the first to suffer when oil prices fall, because exploration budgets are often the easiest ones for oil and gas producers to cut. CGG has posted net losses in four of the past five years, and analysts who follow the company say that a current restructuring plan isn't likely to restore it to profitability until 2016. Mr. Dmirdjian said he suspects the French government, which has a 7.7% stake in Technip and a 10.6% stake in CGG, would like the tie-up to be completed. "I feel the government is very involved in this operation," he said. French government spokesman Stéphane Le Foll declined to comment on the merger on Thursday. Credit: By Inti Landauro and Selina Williams
Subject: Petroleum industry; Acquisitions & mergers; Prices; Energy industry
Location: France United States--US
Company / organization: Name: Technip SA; NAICS: 541330; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626118031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626118031?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Rise on Changing OPEC Expectations; OPEC Meeting Will Reveal Whether Production Will be Cut to Prop Up Prices
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
Multiple banks and consulting firms, including Bank of America Merrill Lynch, JBC Energy, Eurasia Group and Simmons & Co. International, said Tuesday that the cartel is most likely to either reinforce its existing quota or cut the quota by one million barrels a day or less.
Full text: Oil prices gained Thursday, snapping a three-day losing streak, on expectations that the Organization of the Petroleum Exporting Countries would take action at its meeting next week to stop prices from falling. Oil prices have plunged about 30% since mid-June on concerns about ample global supplies and tepid demand growth. OPEC, which controls about one third of global production, has acted in the past to cut output to keep prices high. However, traders have grown skeptical in recent months that the group, especially top exporter Saudi Arabia, will reduce production at its Nov. 27 meeting. More analysts are now calling for a small cut or a stronger commitment to complying with the current quota, since the group's production currently exceeds its quota of 30 million barrels a day. Multiple banks and consulting firms, including Bank of America Merrill Lynch, JBC Energy, Eurasia Group and Simmons & Co. International, said Tuesday that the cartel is most likely to either reinforce its existing quota or cut the quota by one million barrels a day or less. Light, sweet crude for December delivery settled up $1, or 1.3%, at $75.58 a barrel on the New York Mercantile Exchange. The December contract expired at settlement Thursday. The more-actively traded January contract rose $1.35, or 1.8%, to $75.85 a barrel. Brent, the global benchmark, rose $1.23, or 1.6%, to $79.33 a barrel on ICE Futures Europe. "People are keeping a wary eye on this meeting next week," said Gene McGillian, senior analyst at Tradition Energy. "Without a production cut from OPEC, I think the market probably will grind a little lower still." Traders may also be hesitant to take large positions ahead of next week, said Donald Morton, senior vice president at Herbert J. Sims & Co. Iran and six world powers are seeking a nuclear agreement that would, over time, lift international sanctions on Iran, but a deal may prove elusive before the Nov. 24 deadline. Also, the OPEC meeting coincides with Thanksgiving, when U.S. traders will be on vacation. "I do think there are people...taking money off the table here, if for nothing else, just to enjoy the long holiday weekend," Mr. Morton said. "The bets have all been taken." December reformulated gasoline blendstock, or RBOB, fell 1.62 cents, or 0.8%, to $2.0276 a gallon. December diesel gained 2.1 cents, or 0.9%, to $2.38 a gallon. Credit: By Nicole Friedman
Subject: Crude oil prices; Petroleum industry; Meetings
Location: Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Eurasia Group; NAICS: 523930; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626136476
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626136476?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Royal Dutch Shell Sells Some Nigeria Operations After Oil Thefts; Disposal Is Latest in Region Where Company Has Struggled With Theft, Security
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC said Thursday that it has sold its stake in a set of oil wells and processing plants in Nigeria's Niger Delta, the latest in a series of sales in an area where Shell has struggled with oil theft and other security issues.
Full text: LONDON--Royal Dutch Shell PLC said Thursday that it has sold its stake in a set of oil wells and processing plants in Nigeria's Niger Delta, the latest in a series of sales in an area where Shell has struggled with oil theft and other security issues. Shell said it sold its 30% stake in a property known as Oil Mining Lease 24 to Newcross Exploration and Production Ltd., a Nigerian-owned company. Total SA and Eni SpA also sold smaller stakes in OML to Newcross at the same time. Shell said its "cash proceeds" from the deal "amount to some $600 million." Newcross, which now owns 45% of OML, didn't immediately respond to a request for comment. OML 24 produced about 13,000 barrels of oil and equivalent volumes of natural gas a day during the first half of this year, Shell said. Credit: By Justin Scheck
Subject: Petroleum industry
Location: Niger Delta Nigeria
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626154118
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626154118?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Inch Higher to Records; Rebound in Oil Prices Boosts Energy Shares
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
U.S. stocks have hit a series of record highs in recent weeks, boosted by improving economic data, upbeat corporate earnings and stimulus efforts in Europe and Japan. Paul Ebner, who helps manage the BlackRock Global Long/Short Equity Fund, expects European exporters to get a boost from a weaker euro, as the European Central Bank works to prop up the region's economy.
Full text: U.S. stocks rose to record highs Thursday, as a rebound in oil prices sparked gains in energy stocks. The Dow Jones Industrial Average rose 33.27 points, or 0.2%, to 17719.00. The S&P 500 advanced 4.03 points, or 0.2%, to 2052.75, and the Nasdaq Composite rose 26.16 points, or 0.6%, to 4701.87. U.S. stocks have hit a series of record highs in recent weeks, boosted by improving economic data, upbeat corporate earnings and stimulus efforts in Europe and Japan. For the year, the Dow has ended at 27 records and the S&P 500 has hit 44 closing highs. A handful of upbeat economic data points and earnings reports prompted Thursday's advance. The rise was led by energy stocks and small-cap shares, which have lagged behind the S&P 500 so far this year. "It's nice to see different sectors rising to the top today," said Michael Antonelli, a sales trader at Robert W. Baird. That indicates "the market trend is going to continue." The small-stock Russell 2000 Index jumped 1.1%. The index is up only 0.6% for the year, while the large-cap S&P 500 has advanced 11%. Energy stocks posted the biggest gains in the S&P 500, rising 1.1%. The advance followed , which has dropped sharply since this summer, leaving energy stocks down 2.1% for the year. In recent sessions, oil prices have swung on changing expectations for a meeting of the Organization of the Petroleum Exporting Countries next week. Crude-oil futures rose 1.3% to settle at $75.58 a barrel. Fund managers have been taking a hard look at energy stocks during the recent steep decline in oil, trying to determine which companies will remain profitable if prices stay low. Sandy Villere III, a portfolio manager at Villere & Co., has been sticking with his favorite names, like Sanchez Energy Corp. "You can buy energy stocks, but they'd better be the very best," said Mr. Villere, whose New Orleans, La.-based firm manages $3.4 billion. Consumer discretionary stocks rose as well, after a strong reading on the housing market and a handful of upbeat earnings reports. Home builder stocks rose on news that existing-home sales made a surprise jump of 1.5% in October. The iShares U.S. Home Construction exchange-traded fund, which tracks home builders, gained 1.7%. Shares of retailers were buoyed by a trio of upbeat earnings reports. Best Buy Co. rallied 7% after reporting third-quarter results that beat analysts' expectations. Williams-Sonoma Inc. rose 8.4% on a strong quarterly report, driven by housing-market strength and growth in e-commerce. Discount retailer Dollar Tree Inc. jumped 5.2% after it reported its strongest quarterly sales growth at existing stores since 2011 and raised its outlook for the year. Stocks also got a boost from news that a survey of mid-Atlantic manufacturing activity surged to its highest level since December 1993. The Federal Reserve Bank of Philadelphia reported that its index jumped to 40.8 in November from 20.7 the previous month, while economists had forecast a dip to 18.0. "There's demand out there," said Tom Stringfellow, chief investment officer of Frost Investment Advisors, which manages $10 billion, referring to the U.S. economy. "That continues to underpin [gains in] the market." Mr. Stringfellow said that his firm was bullish on home-improvement retailers, and he expects the U.S. housing market to continue to improve. Declines in Europe weighed on U.S. stocks in early trading. European stocks fell after a survey on manufacturing and services activity indicated that eurozone growth will remain weak in the fourth quarter. Markit's composite purchasing managers index fell to 51.4 in November from 52.1 in October. November's level marked a 16-month low, but indicated that activity was increasing. The Stoxx Europe 600 fell 0.3%. But some investors have been picking up stocks in Europe. Paul Ebner, who helps manage the BlackRock Global Long/Short Equity Fund, expects European exporters to get a boost from a weaker euro, as the European Central Bank works to prop up the region's economy. "The EU continues to have...loose monetary policy," said Mr. Ebner, whose fund manages $1.6 billion. "That's going to take some pressure off the exporters." U.S. Treasury prices rose, sending the yield on the 10-year Treasury note down to 2.333%. In commodity markets, gold futures slipped 0.2% to $1190.70 an ounce. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Investment advisors; Stock exchanges; Purchasing managers index; Crude oil prices
Location: United States--US
Company / organization: Name: Williams-Sonoma Inc; NAICS: 442299, 454111; Name: Sanchez Energy Corp; NAICS: 211111; Name: Best Buy Co Inc; NAICS: 443141, 443142
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Placeof publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626166983
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626166983?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Apache to Divest Some Oil and Gas Assets for $1.4 Billion; Exploration and Production Company to Focus More on Shale Drilling
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
The divestitures of the noncore assets are part of the exploration and production company's broader effort to focus on shale drilling in the U.S. In a prepared statement before the company's investor update Thursday, Chairman and Chief Executive G. Steven Farris said proceeds from the deals are mostly targeted to fund Apache's 2014 leasehold acquisition program.
Full text: Apache Corp. said it agreed to sell some oil-and-gas assets in southern Louisiana and the Anadarko Basin in Texas and Oklahoma for roughly $1.4 billion in two separate deals. The divestitures of the noncore assets are part of the exploration and production company's broader effort to focus on shale drilling in the U.S. In a prepared statement before the company's investor update Thursday, Chairman and Chief Executive G. Steven Farris said proceeds from the deals are mostly targeted to fund Apache's 2014 leasehold acquisition program. Mr. Farris said the program "has added significant acreage within our primary focus areas." The identities of the buyers weren't provided. Both deals are expected to close during the fourth quarter. For next year, Apache projects its North American onshore production will increase 8% to 12%, and forecasts capital spending for production projects will reach roughly $4 billion. Earlier this month Apache reported swinging to a third-quarter loss on write-downs of its oil and gas assets, resulting from lower commodities prices, as well as other one-time tax-related items. The company, under pressure from activist investor Jana Partners LLC, has been considering a possible sale or spinoff of its international operations to focus on shale drilling in the U.S. Of the $2.06 billion in charges during the third quarter, about half were related to repatriating cash or plans to do so. Credit: By Tess Stynes
Subject: Petroleum industry; Financial performance
Location: United States--US Oklahoma Texas
People: Farris, G Steven
Company / organization: Name: Jana Partners LLC; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626167028
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626167028?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Advisory Firm Ordered to Pay Exxon Retirees $3.8M
Author: Rieker, Matthias
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Nov 2014: n/a.
Abstract:
An arbitration panel ordered a Texas advisory firm to pay a group of 19 retired Exxon Mobil Corp. employees a total of $3.8 million for losses from an alleged failed investment strategy designed to protect them from stock-market downturns.
Full text: An arbitration panel ordered a Texas advisory firm to pay a group of 19 retired Exxon Mobil Corp. employees a total of $3.8 million for losses from an alleged failed investment strategy designed to protect them from stock-market downturns. The retirees invested nearly $40 million with U.S. Capital Advisors LLC of Houston, and contended that they could have made $3 million from the strategy as it was described to them by advisers with the firm. Instead, they lost $1.25 million, according to their arbitration claim with the Financial Industry Regulatory Authority. The panel awarded them a combined $1.9 million in damages plus interest, along with $852,630 in punitive damages and almost $1 million in legal and other costs, according to the award posted on Finra's website. Individually, the damage awards ranged from $28,294 to $195,949. Finra arbitrators usually don't explain the reasoning for their decisions but in this case they did, saying they found "egregious, recurrent, and willful violations of a fiduciary relationship" between U.S. Capital Advisors and the investors. Many of the claimants put money into the strategy at the recommendation of a group of advisers who targeted Exxon Mobil employees nearing retirement with investment seminars. The advisers originally worked for UBS AG, and the clients stayed with them when they left that firm to join newly created U.S. Capital Advisers in 2010. The "total return" strategy, the investors were told, would hold mainly U.S. stocks and exchange-traded funds in a rising market and move the money into cash when markets fell, with trades triggered by "objective technical indicators," according to the claim. But when the advisers left UBS, their new firm was "understaffed" and "ill-equipped to execute" the strategy, and they strayed from the model, the claim said. Asked for comment on the award, Patrick Mendenhall, the chief executive of U.S. Capital Advisors, defended his firm. He said the client's claim focused only on the losses from the total return strategy but ignored gains from other investments. "We are clearly disappointed with the award; we certainly don't understand it," he said. Thomas Fulkerson, a Houston lawyer who represented the retirees with his partner, Wesley Lotz, said financial advisers can't argue that advisers who make money in one client accounts would have immunity for the losses in other accounts. He said the panel asked for a specific briefing about the argument. "We are gratified" by the award, he said. Credit: By Matthias Rieker
Subject: Owner operator; Advisors; Investments
Location: Texas United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Financial Industry Regulatory Authority Inc; NAICS: 926150; Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 20, 2014
Section: Wealth Management Journal
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626366854
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626366854?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Opens Up on Oil Reserves; No Disclosures Made on Second and Third Phases of Stockpile
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.
Abstract:
BEIJING--China is lifting some of the secrecy around its stockpiling of oil reserves, as it disclosed for the first time that the first phase of its strategic petroleum reserves contains about 91 million barrels.
Full text: BEIJING--China is lifting some of the secrecy around its stockpiling of oil reserves, as it disclosed for the first time that the first phase of its strategic petroleum reserves contains about 91 million barrels. The disclosure on Thursday follows a pledge by President Xi Jinping to provide regular updates on the size of its emergency stockpile. China's National Bureau of Statistics said that phase one of its strategic petroleum reserves contained 12.43 million metric tons of oil, or about 91 million barrels, across four sites. The statement didn't disclose the size of its second or third phases of reserves. By contrast, the U.S. strategic petroleum reserve has a capacity of 727 million barrels. China consumes about 10 million barrels a day. China intends to construct facilities that can hold up to 500 million barrels of oil by 2020, according to the U.S. Energy Information Administration. In addition to strategic government stockpiles, Chinese companies have also been building commercial stockpiles to hedge against price swings. State-owned Chinese oil companies have between 250 million and 400 million barrels of commercial storage capacity, according to the EIA. The U.S. government has been a vocal supporter of China's effort. Senior U.S. officials have said they are offering guidance to China on collecting and reporting oil-inventory data, and believe that greater transparency on the reserves of a major oil consumer like China is necessary for traders as well as for market stability. The state-owned China Daily newspaper quoted Mr. Xi as saying earlier this week during a gathering of leaders of the Group of 20 major economies in Australia that China would release oil-reserve data in a more complete and timely manner. Write to Brian Spegele at Credit: By Brian Spegele
Subject: Oil reserves; Strategic petroleum reserve; Petroleum industry; Energy policy
Location: China United States--US
People: Xi Jinping
Company / organization: Name: China Daily; NAICS: 511110; Name: Group of Twenty; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 21, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626434502
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626434502?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Explosion on Gulf of Mexico Oil Platform Kills One, Injures Three; Fieldwood Energy's Echo Platform Wasn't in Production at Time of Blast, Bureau Says
Author: Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.
Abstract:
The company has been buying up Gulf of Mexico wells and lease agreements over the last 18 months, including $4.5 billion worth of assets from Apache Corp. and SandRidge Energy Inc. Write to Lynn Cook at Credit: By Lynn Cook
Full text: An explosion at an offshore oil and gas platform in the Gulf of Mexico killed one worker and injured three others Thursday afternoon, the Bureau of Safety and Environmental Enforcement said. Fieldwood Energy LLC of Houston reported the blast around 3 p.m. at its Echo platform about 12 miles off the Louisiana coast. The oil and gas pumping facility wasn't producing fuel at the time and no pollution has been reported, according to the federal regulator. The employee who died worked for a contract company, and a second contract worker suffered serious injuries, the company said. The three wounded workers were transported back to shore to a medical facility Thursday afternoon. "We have accounted for all other personnel who were working at the facility," said Shannon Savoy, offshore production manager for Fieldwood. "This incident just occurred, so we do not have many details at this point." BSEE is coordinating with the U.S. Coast Guard and will investigate the blast. Fieldwood is an oil and gas company backed by private-equity firm Riverstone Holdings LLC. The company has been buying up Gulf of Mexico wells and lease agreements over the last 18 months, including $4.5 billion worth of assets from Apache Corp. and SandRidge Energy Inc. Write to Lynn Cook at Credit: By Lynn Cook
Subject: Petroleum industry
Location: Louisiana Gulf of Mexico
Company / organization: Name: Riverstone Holdings LLC; NAICS: 523910; Name: Fieldwood Energy LLC; NAICS: 211111; Name: Coast Guard-US; NAICS: 928110; Name: Apache Corp; NAICS: 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 21, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1626513704
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1626513704?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Higher on China's Surprise Rate Cut; Investors Waiting to See If OPEC Cuts Output to Prop Up Prices at Meeting Next Week
Author: Puko, Timothy; Werber, Cassie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.
Abstract:
With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said.
Full text: NEW YORK--Oil prices held on to small gains Friday, after an early rally was sparked by China's decision to cut interest rates, fanning hopes for increasing demand from the world's second-largest crude consumer. The move came after oil prices had fallen 30% since June on worries about global production outpacing demand, and a growing expectation that the Organization of the Petroleum Exporting Countries will decided to curb production when the cartel meets next week. A stimulus for the Chinese economy is something that gets macroeconomic investors to buy all kinds of commodities, oil included, said Andrew Lebow, senior vice president for energy derivatives at Jefferies Bache LLC. With lower interest rates, the Chinese could spend freely enough to support 100,000 barrels of oil demand growth in 2015 in a best-case scenario, he said. "No question I think the market was excited today," Mr. Lebow said. "The Chinese news probably helped to support that rally" that started Thursday in connection with the OPEC meeting. Light, sweet crude for January delivery settled up 66 cents, or 0.9%, at $76.51 a barrel on the New York Mercantile Exchange. It is the highest closing price since Nov. 12 and helped Nymex crude have its first week of gains since September. Brent, the global benchmark, rose $1.03 cents, or 1.3%, to $80.36 a barrel on ICE Futures Europe. That was also Brent's highest closing price since Nov. 12 and produced its biggest weekly percentage gains since the week that ended June 20. The unexpected move by the People's Bank of China was seen as a response to weaker economic activity in the giant Asian economy, which is second to the U.S. in terms of oil consumption. The central bank cut its benchmark one-year loan rate by 0.4 percentage point and its one-year deposit rate by a quarter of a percentage point. It also gave banks greater flexibility in setting deposit rates. Friday's gains in the crude market were small but put Brent above $80 a barrel for the first time this week. Brokerage PVM said Iran is also playing a role in the rally. It said talks over the Persian nation's nuclear-power program with a U.S.-led alliance were unlikely to be concluded by Monday's deadline, allaying fears that Iranian oil could soon flood back into the market. Iran has been hit with several rounds of sanctions, which have heavily affected the Islamic republic's ability to export oil since 2011. Markets have feared that if a deal were struck, Iran might quickly resume selling oil, adding to international markets that are already heavy with supplies. The market was due for a bounce, but bigger moves are likely next week, said Kyle Cooper, managing director of research for $15 million hedge fund Cypress Energy in Houston. Many traders are waiting for news from the OPEC meeting. Others had to jump on the Chinese economic news and buy back in to cover short-selling bets that oil prices would fall, said Peter Donovan, energy broker for Liquidity Energy in New York. "There's some nervousness in the curve here," Mr. Donovan added. "Whatever comes out of that OPEC meeting will supersede expectations that guys put in the market today." December reformulated gasoline blendstock, or RBOB, gained 2.89 cents, or 1.4%, to $2.0565 a gallon. December diesel gained 2.45 cents, or 1%, to $2.4045 a gallon. Write to Tim Puko at and Cassie Werber at Credit: By Timothy Puko And Cassie Werber
Subject: Crude oil prices; Petroleum industry; Interest rates; Meetings
Location: China Iran
Company / organization: Name: Peoples Bank of China; NAICS: 521110; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 21, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627089365
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627089365?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Talisman, Ecopetrol Report Second Oil Find in Colombia
Author: King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.
Abstract: None available.
Full text: Canada's Talisman Energy Inc. and Colombia's state-owned oil company Ecopetrol S.A. said Friday they have made a second oil discovery in Block CPO-9 in Colombia. The companies "have proven the presence of hydrocarbons in the Nueva Esperanza-1 exploratory well [A2b]," they said in a statement. The discovery comes almost a year after the partners declared the commercial viability of the Akacias oil area--one they said would add at least 35 million barrels of reserves for both the companies and Colombia's overall, dwindling supply. The Akacias oil area, part of the CPO-09 heavy oil block, is about 60 miles southeast of Bogotá, in the state of Meta. Ecopetrol owns 55% of the production, while Talisman owns 45%. The companies are awaiting a development license for the area. The oil find is good news for Calgary-based Talisman, which has been selling assets as it struggles to pay off debt amid a slump in oil and gas prices. It has a $2 billion divestiture goal by mid-2015, although Talisman Chief Executive Hal Kvisle said this month that the company was reluctant to part with its cash-rich businesses in the Americas and Asia. Talisman and Ecopetrol said Friday that the Nueva Esperanza-1 exploratory well was spudded in July and reached total depth at 12,056 feet on Sept. 26. The partners are analyzing the results of a flow test and will file an application with Colombian authorities to place the Nueva Esperanza-1 well on long-term test. Approval has been granted to drill two down-dip appraisal wells, the first of which, Nueva Esperanza-2, started drilling operations on Nov. 16. Write to Carolyn King at Credit: By Carolyn King
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627146864
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627146864?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Boom Returns to U.S. Gulf After Deepwater Horizon Disaster; Exxon, Shell--Even BP--Push Ahead With Giant Offshore Projects
Author: Gilbert, Daniel; Harder, Amy; Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Nov 2014: n/a.
Abstract:
The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day--more than the oil and gas output of California.
Full text: ABOARD THE OLYMPUS PLATFORM, Gulf of Mexico--Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf--bigger and more expensive than ever. This platform, owned by Royal Dutch Shell PLC, is a floating hive of human activity, 130 miles off the Louisiana coast. Larger than a New York City block and weighing more than an aircraft carrier, Olympus is among roughly a dozen new multibillion-dollar platforms that are or will be pumping oil in the deep waters of the Gulf by the end of next year. The resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf. For the near term, though, the activity promises to return the Gulf to prominence as a major source of U.S. energy. In 2001, the waters produced about a quarter of all American oil and gas. Since then, production has fallen by half as wells petered out and the government issued fewer permits in the aftermath of the 2010 Deepwater Horizon explosion and oil spill. Last year, the Gulf accounted for less than 10% of the country's energy production, in part because of soaring output from wells drilled in onshore shale formations. The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day--more than the oil and gas output of California. And that doesn't include supplies from two projects led by BP PLC, which declined to provide details on output. Costs here have been jumping, in part because companies are drilling farther from shore and in deeper waters. Deep-water wells are up to 25% more expensive today than in 2010, according to Shell and Chevron, and can cost $300 million each. New regulations have prompted companies to add safety features such as an extra stack of valves designed to stop an out-of-control well. The failure of such a device was a cause of the Deepwater Horizon disaster. Drilling the average deep-water well takes 13% longer than it did before the 2010 disaster, according to research firm Kessler Energy LLC, partly because rigs are idle longer for inspections and maintenance. Offshore drillers also must compete for skilled hands who can find jobs closer to home in shale fields, where the workers don't have to spend weeks away from their families. "There are fewer projects moving forward as a result, or they're moving more slowly than they otherwise would," Robert Kessler, the research firm's chief executive, says regarding higher costs. So while new projects under way will push energy production in the Gulf's deep waters to a record 1.9 million barrels a day in 2016, analysts at Wood Mackenzie forecast, growth is likely to stall afterward because of high costs and technological limitations. "The current slide in oil prices does not help the long-term outlook, either, especially if the downward trend continues for a prolonged period," says Imran Khan, an analyst at the energy research firm. Executives say that there will be great demand for fuels pumped from oil fields off the coasts of Louisiana and Texas. Costs aside, "the projects are robust, even under these conditions," John Hollowell, a Shell executive vice president, says aboard the Olympus platform. Hess said Monday that it had started pumping crude from its deep-water Tubular Bells installation about 135 miles southeast of New Orleans. Exxon Mobil and Anadarko Petroleum Corp. plan to start up two more major Gulf projects in the coming months. Hess, Chevron and other partners recently gave the green light for a $6 billion development in the Gulf, even though U.S. oil prices are below $80 a barrel at a four-year low. Even BP has returned to making big offshore bets. The company, which pleaded guilty to criminal charges and has taken a $43 billion hit related to the Deepwater Horizon explosion and oil spill, is developing technology to drill at greater depths. It said last year that it planned to spend $4 billion a year in the Gulf for the next decade and said recently that it was continuing its "multibillion-dollar investment program." For big energy companies, exploring the Gulf's waters is attractive compared with other parts of the world. Many petroleum-rich nations from the Middle East to Latin America limit the amount of profit that energy companies can make. Deep-water wells are also more prolific than shale wells, making it easier for the biggest companies to sustain their output. Unlike many projects that Shell and other oil companies have developed in recent years, the Olympus platform came online ahead of schedule and under budget. It began tapping oil and gas in February. The company decided to build Olympus in 2010, just months after the Deepwater Horizon exploded, as a way to get more oil and gas from a field that the company had pumped for decades. To bring down costs for the project, Shell used components made from polyethylene, a corrosion-resistant material that is less expensive than what Shell had used, according to RMB Products Inc., which made the new parts. Today Olympus sits in 3,000 feet of water and can process up to 100,000 barrels a day of oil, or roughly 3% of Shell's current global production. Now Shell is aiming for an even more remote prize. The company is working on a new Gulf project that will tap an oil field under 9,500 feet of water--three times deeper than Olympus. Write to Daniel Gilbert at , Amy Harder at and Justin Scheck at Credit: By Daniel Gilbert, Amy Harder and Justin Scheck
Subject: Oil spills; Petroleum industry; Energy policy; Costs
Location: New York United States--US California Louisiana
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Jou rnal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627152303
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627152303?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Boom Returns To Gulf After Spill
Author: Gilbert, Daniel; Harder, Amy; Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Nov 2014: B.1.
Abstract:
The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day -- more than the oil and gas output of California.
Full text: ABOARD THE OLYMPUS PLATFORM, Gulf of Mexico -- Four years after the Deepwater Horizon disaster, giant new oil projects are returning to the Gulf -- bigger and more expensive than ever. This platform, owned by Royal Dutch Shell PLC, is a floating hive of human activity, 130 miles off the Louisiana coast. Larger than a New York City block and weighing more than an aircraft carrier, Olympus is among roughly a dozen new multibillion-dollar platforms that are or will be pumping oil in the deep waters of the Gulf by the end of next year. The resurgence could be short-lived if the decline in crude-oil prices, down about 30% since June, continues and prompts companies to delay substantial investments in the Gulf. For the near term, though, the activity promises to return the Gulf to prominence as a major source of U.S. energy. In 2001, the waters produced about a quarter of all American oil and gas. Since then, production has fallen by half as wells petered out and the government issued fewer permits in the aftermath of the 2010 Deepwater Horizon explosion and oil spill. Last year, the Gulf accounted for less than 10% of the country's energy production, in part because of soaring output from wells drilled in onshore shale formations. The new projects here, from such companies as Hess Corp., Exxon Mobil Corp. and Chevron Corp., have the combined capacity to pump about 900,000 barrels a day -- more than the oil and gas output of California. And that doesn't include supplies from two projects led by BP PLC, which declined to provide details on output. For big energy companies, exploring the Gulf's waters is attractive compared with other parts of the world. Many petroleum-rich nations from the Middle East to Latin America limit the amount of profit that energy companies can make. Deep-water wells are also more prolific than shale wells, making it easier for the biggest companies to sustain their output. But costs have been jumping, in part because companies are drilling farther from shore and in deeper waters. Deep-water wells are up to 25% more expensive today than in 2010, according to Shell and Chevron, and can cost $300 million each. New regulations have prompted companies to add safety features such as an extra stack of valves designed to stop an out-of-control well. The failure of such a device was a cause of the Deepwater Horizon disaster. Drilling the average deep-water well takes 13% longer than it did before the 2010 disaster, according to research firm Kessler Energy LLC, partly because rigs are idle longer for inspections and maintenance. Offshore drillers also must compete for skilled hands who can find jobs closer to home in shale fields, where the workers don't have to spend weeks away from their families. "There are fewer projects moving forward as a result, or they're moving more slowly than they otherwise would," Robert Kessler, the research firm's chief executive, says regarding higher costs. So while new projects under way will push production in the Gulf's deep waters to a record 1.9 million barrels a day in 2016, analysts at Wood Mackenzie forecast, growth is likely to stall afterward because of high costs and technological limitations. "The current slide in oil prices does not help the long-term outlook, either, especially if the downward trend continues for a prolonged period," says Imran Khan, an analyst at the energy research firm. Executives say that there will be great demand for fuels pumped from oil fields off the coasts of Louisiana and Texas. Costs aside, "the projects are robust, even under these conditions," John Hollowell, a Shell executive vice president, says aboard the Olympus platform. Hess said Monday it had started pumping crude from its deep-water Tubular Bells installation about 135 miles southeast of New Orleans. Exxon Mobil and Anadarko Petroleum Corp. plan to start up two more major Gulf projects in the coming months. Hess, Chevron and other partners recently gave the green light for a $6 billion development in the Gulf, even though U.S. oil prices are below $80 a barrel at a four-year low. Even BP has returned to making big offshore bets. The company, which pleaded guilty to criminal charges and has taken a $43 billion hit related to the Deepwater Horizon explosion and oil spill, is developing technology to drill at greater depths. It said last year that it planned to spend $4 billion a year in the Gulf for the next decade and said recently that it was continuing its "multibillion-dollar investment program." Unlike many projects in recent years, the Olympus platform came online ahead of schedule and under budget. It began tapping oil and gas in February. The company decided to build Olympus in 2010, just months after the Deepwater Horizon exploded, as a way to get more oil and gas from a field that the company had pumped for decades. Today Olympus sits in 3,000 feet of water and can process up to 100,000 barrels a day of oil, or roughly 3% of Shell's current global production. Now Shell is aiming for an even more remote prize. The company is working on a project that will tap an oil field under 9,500 feet of water -- three times deeper than Olympus. Credit: By Daniel Gilbert, Amy Harder and Justin Scheck
Subject: Energy policy; Offshore oil wells; Oil spills; Crude oil prices; Offshore drilling; Petroleum production; Deepwater exploration & production
Location: Middle East United States--US California Louisiana Gulf of Mexico
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Hess Corp; NAICS: 211111, 324110, 447110; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Chevron Corp; NAICS: 211111, 324110; Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Nov 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627024972
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627024972?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Is It Time for the U.S. to Lift Its Restrictions on Oil Exports? Jason Bordoff on Why It Would Be Smart, Tyson Slocum on Why It Would Be Risky
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.
Abstract:
[...]the U.S. oil price may fall further below the world price. [...]some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use.
Full text: It's a whole new oil world for the U.S. After decades of declining domestic oil production, the country is in the middle of an unexpected boom. Driven by new technology that reaches previously inaccessible reserves, production has soared by millions of barrels a day. This surge has been a key factor driving oil prices down. So, should U.S. oil companies be allowed to sell that oil overseas? Because of a restriction dating back to the oil scares of the 1970s, producers for the most part can't export their oil. The export ban was part of a series of laws passed to ease supply concerns and prevent U.S. producers from skirting price controls by selling crude into the world market at higher prices. Now there's a growing call to lift that ban, from oil companies and others. The game has fundamentally changed, they argue. Allowing American oil to flow onto the global market will encourage more production, since the fuel will fetch higher prices than it could at home. It will also pump more cash into the U.S. economy and over time may end up driving down the price of gas for Americans. Opponents say that isn't the case. Lifting the ban, they say, will drive up prices of gas and oil for American industries that depend on them, discourage innovation among energy companies and hurt the environment. Jason Bordoff, a Columbia University professor and former energy adviser to President Obama, argues in favor of lifting the ban. Tyson Slocum, director of the Energy Program at Public Citizen, makes the case for keeping the ban in place. Yes: It's Smart For Both Economic and Geopolitical Reasons By Jason Bordoff The oil-export ban was put in place to address scarcity concerns and keep U.S. producers from bypassing price controls by selling oil for a higher price abroad. Now, with U.S. output soaring and price controls jettisoned decades ago, it is time to lift that restriction. Although the magnitude of the benefits is uncertain, allowing U.S. producers to sell into global markets would likely spark more domestic oil production, leading to increased U.S. economic activity, a lower petroleum trade deficit, increased global oil supply and perhaps lower gasoline prices. Opening the Doors Currently, many American refineries are set up to handle a different type of oil than we produce domestically. As U.S. supplies continue to grow, producers may increasingly need to discount their price to make it economic for refineries to buy their oil. As a result, the U.S. oil price may fall further below the world price. Although the U.S. is expected to remain a net importer, allowing companies to export certain types of oil and import others means they can sell into the global market for a higher price than they can fetch domestically. That will spur more U.S. production--and thus reduce net imports. Critics say keeping oil at home helps protect us from oil-price shocks, but the oil market is global. A disruption anywhere will cause prices to go up in the U.S., whether we export or not. Nonetheless, cutting net imports means the macroeconomic impact of oil-price increases won't be as severe. Why? More of the increased spending on oil circulates in the U.S. economy instead of flowing overseas. Exports also allow U.S. supply to better respond to global prices and temper supply shocks. Geopolitically, the oil-export ban can undermine U.S. credibility in challenging trade restrictions and promoting open markets elsewhere, while boosting U.S. output could erode OPEC's market share and pricing power. The Effect on the Pump Another criticism is that exports will benefit producers but raise pump prices. But a recent Energy Information Administration study showed consumer gasoline prices move with the global oil price, not the domestic price. To the extent that lifting the ban increases U.S. production and overall world supply, it may cause global prices to decline slightly. Then there is the argument that higher production hurts the environment. It is true that oil and gas development can have environmental impacts, and to the extent that exports boost U.S. supply, lower world oil prices and thus increase oil use, carbon emissions would rise. But trade barriers aren't the appropriate response to environmental concerns. The U.S. is poised to produce vast quantities of oil whether we export or not, which is why adequate environmental regulation is essential along with robust climate policies. Finally, some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use. But innovation is driven by policy, R&D investments, consumer response to prices and entrepreneurs, universities and national laboratories. Suppressing U.S. oil prices will not spur the breakthroughs we need. The current statutory restrictions on oil exports are a legacy of a bygone era that doesn't reflect today's energy reality. On economic, security and geopolitical grounds, they should be lifted. Mr. Bordoff, professor of professional practice in international and public affairs and founding director of Columbia University's Center on Global Energy Policy, previously served as an energy adviser to President Obama. He can be reached at. No: The U.S. Would Be More Vulnerable To Supply Disruptions By Tyson Slocum Removing the export ban is a shortsighted move that will have bad consequences both for consumers and for the economic future of the U.S. The current oil boom--coupled with flatlining domestic demand--has led to a huge glut that helps insulate the American economy from the uncertainty caused by oil-supply disruptions abroad. Opening exports would remove that protection, which would be disastrous. Booming domestic production hasn't brought us anywhere near oil independence: The American economy remains addicted to oil, and we remain vulnerable to international supply shocks and punishing price swings. Oil prices have jerked repeatedly since the mid-2000s in response to supply constraints and demand trends. The future will be no less volatile. The Price at the Pump What's more, opening exports will make oil and gas much more expensive for Americans. As oil producers head overseas to fetch higher prices than they could get at home, domestic supplies will dry up, and the cost will rise. Oil is literally a fuel for economic activity. To increase the cost of that feedstock would benefit oil extractors at the expense of everyone else. What about studies projecting that unconstrained crude-oil exports will lower domestic prices rather than raise them? In general, they conclude that exporting oil will raise the key U.S. oil benchmark price (West Texas intermediate, or WTI) but will lower an international benchmark by which some portions of the U.S. gasoline market are priced (Brent). Following the money, however, one sees that nearly all of these private studies have been funded by companies that benefit from exporting oil. And the studies dismiss the possibility that more U.S. gasoline markets could link to WTI and rise as the U.S. benchmark price rises. It is true that Brent does price a lot of the gasoline market. But that dynamic is due to historic trends, where much of the U.S. market had to rely on imports and was exposed to Brent pricing. The recent glut in domestic oil can change this dynamic and potentially send gasoline prices lower. But if we allow exports, that glut will disappear. Some supporters of exporting also say we need to allow exports to achieve credibility in trade talks. But crude oil has long been exempt from trade negotiations, so the ban is a nonfactor. True Economic Strength There's a broader point here. We must learn from Nigeria, Russia and Venezuela that an economy that prioritizes raw natural-resource exports fails to properly develop true engines of prosperity. The strength of the U.S. economy will be in the development of a strong technology sector--which is at odds with a strategy to export crude oil. Any informed observer of energy markets recognizes the real revolution is in clean-tech technology. Discarding the export ban would boost prices and dull the incentive to use oil as an industrial feedstock, including for photovoltaic cells, wind turbines and advanced batteries. Then there is the environment. As with any extractive industry, the impacts of fracking on precious resources will be exacerbated by the increase in fracking should the ban be lifted. The real issue: One segment of the economy--the oil industry--is waging a campaign to convince a skeptical public that an economic-protection statute is no longer needed and Americans will be better off shipping our crude directly to China. Domestic oil should be used domestically. Mr. Slocum is director of the Energy Program at Public Citizen. He can be reached at.
Subject: Petroleum refineries; Exports; Petroleum industry; Energy policy; International trade; Wage & price controls; Trade restrictions; Petroleum production; Gasoline prices; Energy industry
Location: United States--US
People: Obama, Barack
Company / organization: Name: Columbia University; NAICS: 611310; Name: Public Citizen; NAICS: 541820, 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 23, 2014
Section: Special
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154546
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154546?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Where Is U.S. Energy Policy Heading Over the Next Two Years? Two Policy Advocates Debate the China Accord, the Likelihood of Gridlock and the Ban on Oil Exports
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.
Abstract:
[...]next year the U.S. will be one step closer to achieving the significant carbon pollution reductions we need to avert dangerous climate change. [...]China is expected to add the equivalent of the entire current U.S. coal fleet over the next decade.
Full text: Next year's Republican-controlled Senate is expected to come out strongly against President Barack Obama's most consequential policies aimed at reducing the effects of climate change. The GOP-controlled House already has spent the past few years passing legislation curtailing Environmental Protection Agency regulations. Now the Senate's next majority leader, Mitch McConnell of Kentucky, is poised to put the upper chamber in lock step with the House on infrastructure and energy-efficiency bills as well. To get a sense of where energy and environmental policy might be headed in the next Congress, The Wall Street Journal reached out to policy advocates on opposite sides of the political fence: Alison Cassady, director of domestic energy policy at the Center for American Progress and a former aide to House Energy and Commerce Committee ranking member Henry Waxman (D., Calif.); and George David Banks, senior fellow at the R Street Institute and former Republican deputy staff director for U.S. Senate Environment and Public Works Committee ranking member James Inhofe (R., Okla.). Here are edited excerpts. The China Card WSJ: Will the Republican-controlled Congress be able to roll back or stop the EPA? And how does the recent climate-change deal announced with China affect the debate? MS. CASSADY: In 2015, the EPA will finalize the first carbon pollution standards for U.S. power plants. Congressional leadership will try to block these standards, but they will not succeed. As a result, next year the U.S. will be one step closer to achieving the significant carbon pollution reductions we need to avert dangerous climate change. Republicans in Congress have made many claims about the president's Climate Action Plan, but two stand out in light of the U.S.-China announcement. First, they have argued that the emissions reductions achieved by the president's policies are inconsequential on the global scale. Second, they have argued that the U.S. should not act because China never will. The U.S.-China agreement shows just how misplaced these claims are. President Obama's policies to cut carbon pollution from vehicles and power plants have leveraged a major commitment to act from the Chinese. In turn, this unprecedented leadership from the U.S. and China will bring more countries to the table to make similar commitments. The president's policies provided the catalyst for this major foreign-policy success. Republican attacks on this success will only hurt our standing in the world. MR. BANKS: In Congress, the GOP will adopt messaging bills and Congressional Review Acts on key regulations that the president will veto. At the same time, Republicans will slow or chip away at the White House's climate policies via focused appropriation plays attached to must-pass bills. Beijing's agreement that it intends to cap emissions by 2030 will heighten "leakage" concerns that U.S. emissions (and jobs) will continue to be transferred to China, thus strengthening the argument that EPA action does not produce any real climate mitigation benefits. China essentially "agreed" to do what it already intends to do. Thus, there was no real "deal." China remains on track to reach a greenhouse-gas emissions level by 2017 that is double the U.S. level. In fact, China is expected to add the equivalent of the entire current U.S. coal fleet over the next decade. That translates into a new 600-megawatt coal plant every 10 days. At the same time, the U.S. plans to shutter a large percentage of its coal fleet, reducing a key source of affordable and reliable electricity. If that were a deal, it would be a lousy one, and Republicans know that. End of Gridlock? WSJ: Will this election lead to more bipartisanship? Will there be unique opportunity for bipartisanship on energy and environmental policy? MS. CASSADY: On energy policy, bipartisan progress will depend in large part on whether the Senate and House Republican leadership can moderate their respective caucuses. Sen. McConnell and Rep. John Boehner [House speaker] have promised to bring up bills that passed the House with bipartisan support in the 113th Congress. On its face, this may sound like a reasonable approach. But in reality, they would be catering to the most hard-line members of their party. The Republican-led House has amassed a remarkable anti-environmental track record that stands in stark contrast to Americans' support for environmental stewardship. MR. BANKS: With the president expressing little interest in working with Congress, we should not expect to see significant bipartisanship on most controversial issues. The president's carbon plans, for example, rely solely on using existing executive-branch authority under the Clean Air Act to achieve emissions reductions. Republicans are counting on the courts to eventually reject related EPA proposals, in part or in their entirety. One wild card on the climate-change front is the potential for extreme weather events this winter. We came dangerously close to a grid failure last January during the polar vortex. If part of the grid fails (i.e., millions of people go without electricity) because of the absence of coal plants that were shuttered because of EPA regulations, the president's go-it-alone approach could face major criticism. Democrats who have often used extreme weather events to promote action on climate change may find the tables turned by Republican arguments that unreasonable climate and environmental policies resulted in actual harm to the American people. MS. CASSADY: Climate change is the perfect example of where Republicans need to moderate the most insurgent members of their caucus. House Republicans have voted to block funding for climate science while saying the scientific record isn't complete. They have voted to block funding for international outreach on climate change while decrying unilateral action. They even voted to deny the reality of climate change, even though the scientific consensus is clear. If Republicans want to engage the president on climate change, they first need to acknowledge that climate change is a serious problem that demands an urgent response. Keys to Keystone WSJ: How do the election and the failed vote on Nov. 18 change the dynamics on the Keystone XL pipeline? Senate Republicans say they have the 60 votes needed to pass it, but will Mr. Obama veto or sign a bill that approves Keystone? MR. BANKS: It's unfortunate that Sen. Mary Landrieu's effort failed by only one vote. A recent Huffington Post poll indicated that 56% of Americans support the pipeline. Of course, Republicans will try again next year. Four of the Landrieu "no" votes will be replaced with Republicans, thus the GOP has a solid chance of reaching the 60-vote threshold, as long as no more than three Democrats abandon their "yes" position. We should not expect the magic [veto-proof] number of 67 to be reached, given the symbolism of the pipeline to climate alarmism. The president will therefore maintain leverage with the veto threat. Regardless, the Congress may send a bill to the president as a stand-alone. Given the number of bills that he will feel forced to oppose--chiefly those aimed at stopping the climate agenda--the White House should choose when best to exercise the veto, particularly given the level of public support for the project. Most Americans do not view Keystone as an environmental threat, backed by a State Department assessment that the pipeline only produces negligible greenhouse-gas emissions. If the president does veto it, Congress will attach the pipeline approval to a must-pass bill that he cannot veto. MS. CASSADY: The world's climate scientists are sounding alarms about the urgent need to decarbonize our energy system and are warning against locking in new high-carbon infrastructure like Keystone XL. The most recent report from the Intergovernmental Panel on Climate Change says we have to eliminate fossil-fuel use by the end of the century to avoid catastrophic warming. In that context, arguments against doubling down on Canadian tar sands have even greater resonance. Keystone XL will ensure and expedite the development of the dirtiest fossil fuel on the planet. Moreover, the state of Nebraska still has not finalized a pipeline route that satisfies concerns of ranchers and property owners. The president has reiterated his commitment to the current review process, which allows him to consider the costs and benefits of the pipeline for the American people. The question for Keystone XL proponents is one the oil industry and other energy interests will face often in 2015: Are they willing to moderate their hard-line position that disregards climate change and other environmental concerns? Outlook for Oil Exports WSJ: The oil industry is lobbying Congress to relax the decades-old ban on oil exports, while the White House studies the upshots of the U.S. oil boom. What do you think Congress will do on this issue? Do you think the Obama administration will change its policy? MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports--resulting from increased domestic oil production and transportation-fuel efficiency improvements--has made the ban much more difficult to defend. Moreover, the ban and its exceptions could very well be inconsistent with U.S. trade obligations, as pointed out by a number of studies. WSJ: What do you think Congress and the president will do about the ban on oil exports? MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports--resulting from increased domestic oil production and transportation-fuel efficiency improvements--has made the ban much more difficult to defend. Of course, wild cards exist. An oil supply shock in the Middle East, for example, would complicate a shift in policy, despite the global market's increased need for U.S. oil. MS. CASSADY: If you listen to proponents of lifting the ban, you'd believe that we produce more oil than we need. In fact, the U.S. remains dependent on foreign oil to meet our needs. In that context, members of Congress and the public will have to evaluate whether it makes sense to start shipping more oil overseas. Congress should proceed cautiously and hold meaningful, thorough hearings on the potential consumer and environmental impacts of lifting the ban. Ms. Harder is a staff reporter in The Wall Street Journal's Washington bureau. Email her at . Credit: By Amy Harder
Subject: Environmental policy; Emissions; Energy policy; Environmental protection; Climate change
Location: China United States--US
People: McConnell, Mitch Banks, George David Waxman, Henry A
Company / organization: Name: Congress; NAICS: 921120; Name: Republican Party; NAICS: 813940; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Center for American Progress; NAICS: 813940, 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 23, 2014
Section: Special
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154593
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154593?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Weatherford Must First Weather Oil-Services Storm; Merger of Halliburton, Baker Hughes Would Shift Playing Field
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Nov 2014: n/a.
Abstract:
[...]Weatherford may get to participate in more projects as oil majors seek to preserve competition when selecting contractors. A sustained drop in oil prices would also blunt Weatherford's efforts to expand margins and free cash flow, a major plank in Wall Street's buy case for the stock.
Full text: Make no mistake, Halliburton's bid for Baker Hughes isn't a good sign for the oil-field-services sector. Sure, assuming it gets approved, such consolidation bodes well for the long term. But for now, the signal is that Baker Hughes, especially, wasn't banking on a rebound in oil prices soon. Which brings up two rivals: Schlumberger and Weatherford International. In theory, both should reap some benefit from this deal. Schlumberger can potentially sharpen its competitive edge in the near term as Halliburton and Baker Hughes are distracted by what will likely be a long regulatory review and integration process. In the longer term, Schlumberger would face a more formidable rival. Still, tenders for big international projects would now have two very large oil-services firms competing for them, not three. That tends to support "rational pricing," as Wall Street euphemistically puts it. The latter point may pertain even more to Weatherford. It is the smallest of the big four firms. Its market share in technology-intensive services of less than 10%, according to Morgan Stanley's Ole Slorer, is about one-third that of Schlumberger or a merged Halliburton-Baker Hughes. Weatherford might gain in two ways: First, Halliburton will likely have to sell businesses to gain regulatory approval, which Weatherford could buy. Second, Weatherford may get to participate in more projects as oil majors seek to preserve competition when selecting contractors. Yet focusing on the details of how Halliburton's bid reshapes the sector risks missing its wider context: that weaker oil-price outlook. There is a valley to be traversed before reaching the sunny uplands of "rational pricing." That suggests owning any oil-services stock at this point is risky. Usual metrics such as price/earnings multiples become treacherous as forecast revisions lag behind movements in the oil price. Jeff Tillery at Tudor, Pickering, Holt suggests using price-to-book valuations, which offer more of a sense of where the floor in valuations might be in a down cycle. On that basis, the floor looks a ways off. Even if oil isn't poised for a 2008-style crash, there have been other scares in recent years in which book multiples have fallen. The minimum that Weatherford reached from 2010 to 2013 was 0.87 times book. Today, it trades at 1.62 times. That potential drop of 46% is the widest of the big four. A big factor weighing on Weatherford is its net debt. Using management's guidance and current consensus profit forecasts, this should end the year still north of two times earnings before interest, taxes, depreciation and amortization, or Ebitda. All of the others are below one times Ebitda. A sustained drop in oil prices would also blunt Weatherford's efforts to expand margins and free cash flow, a major plank in Wall Street's buy case for the stock. The debt burden could also hamper efforts to acquire assets falling out of the Halliburton-Baker Hughes deal. Halliburton also faces sizable downside risk on a price/book basis and, because it wants to use its stock to pay for most of its proposed deal, so does Baker Hughes. The company with the least room to fall, relative to its recent trough multiple, is Schlumberger. It is just a fifth below today's level. At 3.1 times book, the stock certainly couldn't be called cheap. Resilience, however, is likely to command a relative premium in coming months. Write to Liam Denning at Credit: By Liam Denning
Subject: Oil service industry; Regulatory approval
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Weatherford International Inc; NAICS: 213112, 333132
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 23, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154634
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154634?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Rich Nations May Cut Spending
Author: Fitch, Asa
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Nov 2014: C.8.
Abstract:
Government spending by the Middle East's oil exporters jumped above $700 billion in 2011 and grew by about 15% annually until this year, when estimates show the rate of increase slowing, according to the Institute of International Finance "If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager.
Full text: Lower oil prices are threatening to curtail the spending that energy-rich Persian Gulf governments have used to shore up support since the Arab Spring. A continuing decline in prices could curb foreign-asset purchases by the governments of Bahrain, Oman, Saudi Arabia, United Arab Emirates, Qatar and Kuwait and put a drag on the post-Arab-Spring construction growth that has benefited multinational contractors. Such a reconsideration could have implications for global asset markets, for regional politics and for the pace of a development boom into which governments have pumped hundreds of billions of dollars and from which many foreign companies have profited. Leaders in the Gulf have begun talking more openly about spending adjustments and economic diversification away from energy. Oman's minister of oil and gas, Mohammed al Rumhi, said this month that the price decline is "a challenge, because the country depends on oil," according to the Muscat Daily. "Oil prices going down will affect the state budget," he said. High oil prices have helped Gulf governments in their attempt to head off the kind of unrest that toppled regimes in Tunisia and Egypt in 2011. To keep their citizens content, the royal-family hegemonies used their energy-fueled fiscal muscle to start building schools, hospitals, housing for citizens, roads and other social projects. Government spending by the Middle East's oil exporters jumped above $700 billion in 2011 and grew by about 15% annually until this year, when estimates show the rate of increase slowing, according to the Institute of International Finance "If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager. "Eventually some of these huge projects will have to slow down." If oil prices, which have dropped to below $80 a barrel from more than $100 a barrel in July, continue to stay low, this slowdown could persist. The scale of the coming budget problem is biggest in Saudi Arabia, the Gulf's leading economy. Saudi Arabia spent $265 billion last year, according to International Monetary Fund estimates. If it doesn't alter fiscal policy, it is on pace to run a budget deficit amounting to 1.4% of economic output next year, despite its enormous wealth. Saudi Arabia needs oil to trade at about $97.50 a barrel this year to sustain its spending without running a deficit or tapping reserves, according to the IMF. Oil prices fell below Saudi's break-even budget level in July and have remained below it since. The break-even levels for the Gulf countries apart from Qatar and Kuwait are already above current oil prices. Light, sweet crude futures settled at $76.51 in New York on Friday. Brent crude, the leading European oil benchmark, traded at an average of around $110 a barrel between 2011 and 2013. Spending also has ballooned in the U.A.E., where Abu Dhabi pledged last year to build $90 billion of projects through 2017 -- many of them with the help of foreign companies. Bahrain, Qatar, Oman and to a lesser extent Kuwait have been on spending sprees, too. The Gulf's big energy exporters, including Saudi Arabia, Kuwait, the U.A.E. and Qatar, could try to fight the decline in oil prices. As some of the most influential members of the Organization of the Petroleum Exporting Countries, the cartel of big oil producers, they could agree to cut output in a bid to buoy prices. But the group has so far failed to reach any consensus about reining in production, and it is unclear how much impact OPEC would have on prices if it did act. The countries also could issue debt or tap into government savings if current oil receipts can't pay for planned expenditures, tiding them over while they make budget adjustments. In the U.A.E., for example, there was "no need now to adjust very quickly to lower revenues" because of the existence of the Abu Dhabi Investment Authority and other sovereign asset pools, said Harald Finger, the head of the IMF's mission to the country. Still, Gulf countries are reluctant to drain sovereign-wealth funds, together estimated at more than $1 trillion, leaving spending cuts as the only other option outside of borrowing. Such cuts, however, could endanger spending that has been a boon to foreign companies and investors. U.S. construction company Bechtel Group Inc. and Germany's Siemens AG won contracts to help build a $23.5 billion metro in Riyadh last year, while Royal Dutch Shell PLC signed a deal in 2012 with Qatar Petroleum to build a huge new petrochemicals complex in Qatar. If Gulf countries do decide to dip into sovereign funds, it could force a pullback by some of the world's most active institutional investors. Gulf funds have spent billions of dollars in recent years on everything from London real estate to Australian and U.S. infrastructure, and have served as key financial backstops for large Western banks in the throes of the financial crisis. Funds in Abu Dhabi and Qatar helped rescue Citigroup Inc. and Barclays PLC in 2007 and 2008. In an era of greater austerity, funds may still make new investments using dividends and investment gains, but the flow of Gulf money into international markets could be slower. The shift toward domestic spending has already prompted changes in sovereign-fund allocations in Qatar, where more new energy revenues have been flowing directly to the government, bypassing the Qatar Investment Authority, its main sovereign-wealth fund. Credit: By Asa Fitch
Subject: Crude oil; Global economy; Foreign investment
Location: Persian Gulf states
Classification: 9178: Middle East; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.8
Publication year: 2014
Publication date: Nov 24, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627006827
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627006827?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Crude Conflict: Control of Oil Fuels War Between Kurds, Islamic State
Author: Dagher, Sam
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Nov 2014: A.1.
Abstract:
The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials.
Full text: AL-YAROUBIYAH, Syria -- Plumes of black smoke billow on the horizon of this border town in northeast Syria, a thumb-shaped corner of the country that pokes into neighboring Turkey and Iraq. The smoke isn't from war, but it rises from the deadly fight over resources between Islamic State and Kurdish fighters. Men, women and children operate thousands of primitive metal kilns to refine crude oil distributed by the warring sides to buy loyalty. Residents sell the fuel they make to black-market traders. With oil now the only stable income in these impoverished rural communities, each side offers a choice: Fight us and die. Or, join us and earn a living. The U.S. seeks to expand its support of Kurdish forces fighting Islamic State for control of the towns and villages bound by the Tigris and Euphrates rivers. The Wall Street Journal found the conflict as murky as the sludge that spills from the makeshift kilns onto land grazed and farmed since Biblical times. As one 27-year-old tribesman said, local Arabs are eager for oil income but most hate the Kurds as much as they fear Islamist militants. Islamic State controls most of the southern section of Syria's Hasakah province and nearly all of the adjacent Deir Ezzour province, both rich in oil and gas, as well as most of nearby Raqqa province. For Islamic State, Hasakah province is an integral part of its self-proclaimed caliphate that currently stretches from the outskirts of the northern Syrian city of Aleppo to the fringes of Baghdad, the capital of Iraq. The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials. Sharing profits with tribal elders and their followers also keeps a steady supply of Islamic State recruits, these people said. The United Nations and some analysts estimate that Islamic State produces roughly 50,000 barrels a day from oil fields it controls. The effect of recent U.S.-led coalition airstrikes against oil facilities used by the Islamist militants is unclear. A Kurdish paramilitary force claiming more than 30,000 fighters has seized the northern section of Hasakah province and set up a self-rule area that has established courts and passed laws in a bid for permanent autonomy of Kurdish-majority regions in Syria. The force, called the People's Protection Units, or YPG, also controls oil wells and sells crude at a discount to local Arab tribesmen, providing income for both Kurd fighters and local families. The Kurds produce about 40,000 barrels of crude oil a day from wells they control, according to Kurdish officials here. Some of it is sold to the mostly Arab kiln operators at $15 a barrel, they said. Eight barrels of crude yields roughly six barrels of gasoline or diesel fuel, which are sold for an average of $40 a barrel, said one kiln operator. There are an estimated 3,000 refining kilns in Kurdish-controlled areas, officials said, all built since the start of Syria's civil war. Interviews with former Islamic State fighters now held as prisoners by the Kurds, as well as telephone interviews with residents in territory held by Islamic State, reveal similarities in how the two sides run their oil enterprises. Like the Kurds, Islamic State sells crude oil to kiln and refinery operators at discounted prices: On the world market, the crude might fetch $75-$80 a barrel. And like the Kurds, Islamic State hires local residents to protect and operate the oil fields -- or join its ranks as fighters -- with salaries as high as 100,000 Syrian pounds a month, about $512. The violence that inflames Islamic State's Sunni Islamist extremists against all other Muslims -- and all other religions -- is focused here instead on control of land, resources, roads and border crossings that yield revenues. "Material gains are what's driving this war, nobody has principles," said Sheikh Humeidi Daham al-Jarba, a septuagenarian recognized as one of the leaders of Shammar, one of the largest Bedouin tribes in the Middle East. "For as far as I can remember," he said, "these three provinces never had their own direction, always with the strongest and the power on the ground." Mr. Jarba, who has joined forces with the Kurds, recently formed a Shammar militia to help fight Islamic State, which lurks as close as 20 miles southwest. In July, he was given the honorary post of governor of the al-Jazeera canton, one of the new Kurdish self-rule areas. Armed members of Mr. Jarba's new militia, Jaish al-Karama -- "Army of Dignity," in Arabic -- guard the entrance of his gated compound, which has large sofa-lined rooms to host tribal meetings. Many of the guards wear checkered red-and-white kaffiyehs, or head scarves, and leather gun holsters. Fuel tankers, SUVs and pickup trucks speed past on the main road. Oil refining is the chief livelihood in Ali Agha, a nearby village that survived on agriculture until 2005 ushered in five years of drought. Most of the remaining 400 residents have homes made of mud-brick walls and a roof of mud over straw and wood pillars. They rely on small generators for power. Water is drawn from nearby wells. Sewage passes through plastic pipes to a dump outside the village. There is a single school, which ends at ninth grade. In an agreement overseen by Mr. Jarba and replicated in other villages, residents pledged to support Kurdish forces and denounce anyone joining Islamic State. "Life is hard and we struggle just to put food on the table," said one resident, who nonetheless sees his village as better off than others in the region. The area's troubled history under the Syrian regime, which also used oil money to reward and punish local Kurds and Arabs, paved the way for Islamic State conquests this summer, analysts and residents said. Syrian government forces now have only a limited presence in two cities of the region. As Hafez al-Assad, Syria's late strongman and father of the current president, began consolidating his power in 1970, he sought to subdue the resource-rich tribal areas, according to residents and tribal elders. Arabs from other parts of Syria were resettled here, with the most loyal granted the best land. Local tribal and social structures disintegrated in the power shift. Kurds, whose towns and villages were renamed in Arabic, were the biggest losers. In the years before the uprising against President Bashar al-Assad in March 2011, people who pledged allegiance to the regime were rewarded with jobs and business in agriculture, oil and trading, said landowners and residents. Once civil war broke out, the Assad regime focused on protecting Damascus and other cities to the west, largely abandoning land and resources here. Fawaz al-Bechir, a leader from the Baggara tribe, which is concentrated in Syria's Deir Ezzour province, said he laughed when Syrian security officials in Damascus had asked him to rally his tribesmen to fight Islamic State. "I told them, 'For decades you did everything to undermine our authority and weaken us and now you want us to help?'" Mr. Bechir said. The only way he can control his people is if he can pay them salaries or provide oil to compete with the Kurdish forces and Islamic State. In the ensuing war, residents said, they looked to any group offering protection and steady work. Hasan al-Khalil, an Arab tribesman and landowner who has joined forces with the Kurds, said it was understandable for people who had thrived under the regime to seek a similar accommodation with Islamic State. "They will do anything to stay on top of the tribal pyramid," he said. When protests against Mr. Assad erupted, Mr. Jarba, the Shammar chieftain, said he discouraged his people from taking part. "Visibility was poor so to speak," he said, "and we couldn't tell where things were headed." Karim al-Mifleh didn't take his leader's advice. Mr. Mifleh, 19 years old, said he and some of his 30 siblings -- his father has three wives -- engaged in protests. In 2012, he dropped out of ninth grade to join a rebel group set up by Mr. Jarba's cousin and linked to the Free Syrian Army, the secular rebel coalition backed by Saudi Arabia, Turkey and the U.S. The militia swelled to some 10,000 men, mostly Shammar and related tribes and clans. Needing more funds for salaries and overhead, the group seized oil wells and took over the refining and sales, Mr. Mifleh said. He was paid 60,000 Syrian pounds, about $307, for guarding the wells. Islamist rebels arrived in the region in early 2013, seeking a share of oil and other resources, including grain stores. At first, they joined forces with Mr. Mifleh's Shammar-dominated group. They ousted Assad regime forces from the Yaroubiyah border crossing in March 2013. But the rebel groups had a falling out -- in part over the rising power of the Kurdish forces. Many fighters, including Mr. Mifleh, were absorbed by Islamic State, which was gaining strength. The Kurdish militia fighters toward the middle of 2013 captured the Yaroubiyah border crossing, along with most of the oil wells and grain silos, from Islamist rebels. At the time, Mr. Mifleh's father and some of his brothers were living in the Yaroubiyah area claimed by the Kurds. Mr. Mifleh and other fighters were captured in June by the Kurds after Islamic State launched a botched offensive to seize the border town, surrounding villages and nearby oil wells. Mr. Mifleh is now in a prison run by Kurdish forces. His father, who works in the oil business under the protection of Kurds, has disavowed him for joining the militants. In Islamic State territory to the south, fighters exploit local tribal tensions, playing one against the other, Mr. Mifleh said. They mistrust locals, referring to them in Arabic as supporters as opposed to those who have pledged allegiance. The militants also seek to foster enmity among Arabs toward Kurds. "They plant in our heads that Kurds are traitors and infidels who should be fought," he said. Last month, Islamic State fighters kidnapped two Arab truck drivers transporting crude oil bought from the Kurds, a Kurdish security officer said. The drivers were killed, he said, and their heads were then severed and hung from the trucks on a main road not far from Yaroubiyah -- a warning to residents about cooperating with the Kurds. In September, Islamic State recaptured four villages next to the border crossing here at Yaroubiyah. Kurdish security and military officials say the group is determined to seize the strategic border crossing, along with surrounding grain and oil resources. The threat of an Islamic State attack loomed over a meeting last month in Yaroubiyah organized by the Kurds to help Arab residents, mostly Shammar, choose neighborhood councils and leaders. Arab men, some in tribal dress, and women covered up except for their eyes, sat at classroom desks moved to the courtyard of a school for the meeting. Children giggled and played. "We need people to volunteer for the neighborhood watch, you will coordinate directly with the Asayish," said the organizer referring to the Kurdish police. "You will report any suspicious person or car." No one raised a hand. "Come on, anyone, this is for your sake," the man said. On a stretch of road outside of town, one villager had set up a makeshift gasoline station with a pump and two metal tanks filled with fuel from a nearby kiln. "Abu Luay's Fuel" was spray-painted in Arabic on one of the tanks. --- Mohammad Nour al-Akraa in Beirut contributed to this article. Credit: By Sam Dagher
Subject: Crude oil; Black markets; Kurds
Location: Syria
Company / organization: Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Nov 24, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627007046
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 20 17-11-21
Database: The Wall Street Journal
Some Traders Step Back From Oil Market Ahead of OPEC Meeting; Oil Prices Have Tumbled About 30% Since Mid-June
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract: None available.
Full text: Some traders and investors are stepping back from the oil market ahead of the most widely watched OPEC meeting in years, anticipating that thin holiday trading could exacerbate big price swings. Oil experts say the Organization of the Petroleum Exporting Countries, which controls roughly a third of global crude output, needs to curb production by at least 3%, or one million barrels a day, to bring supplies closer in line with demand. Such a move could put a floor under oil prices, which have plunged about 30% since mid-June. Oil prices settled down 73 cents, or 1%, at $75.78 a barrel Monday on the New York Mercantile Exchange. OPEC is scheduled to meet on Thursday in Vienna. Many oil traders in the U.S. will be taking the day off for Thanksgiving. According to the Nymex schedule, electronic trading will run until 1 p.m. New York time on Thanksgiving, instead of the usual 5:15 p.m., and a closing price won't be set until the conclusion of regular trading on Friday. Closing prices are used to calculate averages, which underlie many trades and contracts used in the market. Trading in the Brent crude contract on ICE Futures Europe is to stop at 1:30 p.m. New York time on Thursday. The uncertainty about the meeting's outcome and concerns about the ease of trading have prompted some investors to rein in their bets. Tariq Zahir, managing member of Tyche Capital Advisors, said he has closed out some positions ahead of the OPEC meeting and only has about one-fifth the exposure to the oil market that he usually does. He will be watching the market on Thanksgiving for trading opportunities, he said. "With so many people traveling and out...you could see some extra volatility, which creates opportunity for guys like us, if you're on the desk," Mr. Zahir said. Mr. Zahir said he believes that either OPEC won't cut output, at the insistence of No. 1 oil exporter Saudi Arabia, or that any cut will be symbolic. Officials from Saudi Arabia and other OPEC member nations have signaled that the group is unlikely to make a large, coordinated cut. On Monday, Saudi Arabia's oil minister Ali al-Naimi . Instead, Mr. al-Naimi noted that this is not the first time the market has been oversupplied, further damping expectations that Saudi Arabia will respond to current market conditions by reducing production. If the group keeps production steady or only reduces output by a small amount, prices could fall further, traders say, while a surprise large cut could send futures spiking. Mr. Zahir isn't the only one scaling back bets. The number of futures and options contracts outstanding in the Nymex market fell by 13% in the week ended Tuesday to 2.1 million, the lowest level since Sept. 30, according to the U.S. Commodity Futures Trading Commission. Money managers also reduced their bets on rising prices in the week ended Nov. 18 and added to their bets that prices would fall, underscoring the belief that OPEC is unlikely to significantly cut output. may also influence the outcome of the OPEC meeting, some analysts say. Iran and six world powers failed to reach an agreement to curb the country's nuclear program on Monday and extended talks until the end of June, meaning that sanctions on the fifth-biggest producer in OPEC are likely to stay in place for the time being. Some analysts said the failure to strike a nuclear deal with Iran on Monday makes it less likely that OPEC will cut production this week, because members won't have to contend with the possibility of Iranian crude flooding the market. "Based on all of the information and opinions floating around the market, I would say that the best position heading into the OPEC meeting...would be a flat position," wrote Dominick Chirichella, analyst at the Energy Management Institute, in a note released last week. "There will be ample opportunity once the meeting is over to enter into the appropriate trading position." John Kilduff, founding partner at Again Capital in New York, said he has cut his bets. "I doubt I'll have to trade" on Thanksgiving Day, said Mr. Kilduff. "Unfortunately, the computer will be a fixture in the background." Summer Said and Benoît Faucon contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154839
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Slide May Curb Gulf States' Spending Plans; Investment Cuts Have Wider Implications for Governments Hoping to Shore Up Support
Author: Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
Government spending by the Middle East's oil exporters jumped above $700 billion in 2011 and grew by about 15% annually until this year, when estimates show the rate of increase slowing, according to the Institute of International Finance "If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager.
Full text: Lower oil prices are threatening to curtail the spending that energy-rich Persian Gulf governments have used to shore up support since the Arab Spring. A continuing decline in prices could curb foreign-asset purchases by the governments of Bahrain, Oman, Saudi Arabia, United Arab Emirates, Qatar and Kuwait and put a drag on the post-Arab-Spring construction growth that has benefited multinational contractors. Such a reconsideration could have implications for global asset markets, for regional politics and for the pace of a development boom into which governments have pumped hundreds of billions of dollars and from which many foreign companies have profited. Leaders in the Gulf have begun talking more openly about spending adjustments and economic diversification away from energy. Oman's minister of oil and gas, Mohammed al Rumhi, said this month that the price decline is "a challenge, because the country depends on oil," according to the Muscat Daily. "Oil prices going down will affect the state budget," he said. High oil prices have helped Gulf governments in their attempt to head off the kind of unrest that toppled regimes in Tunisia and Egypt in 2011. To keep their citizens content, the royal-family hegemonies used their energy-fueled fiscal muscle to start building schools, hospitals, housing for citizens, roads and other social projects. Government spending by the Middle East's oil exporters jumped above $700 billion in 2011 and grew by about 15% annually until this year, when estimates show the rate of increase slowing, according to the Institute of International Finance "If revenues are not forthcoming, something has to give," said John Sfakianakis, the Middle East regional director for Ashmore, a U.K.-based emerging-market asset manager. "Eventually some of these huge projects will have to slow down." If oil prices, which have dropped to below $80 a barrel from more than $100 a barrel in July, continue to stay low, this slowdown could persist. The scale of the coming budget problem is biggest in Saudi Arabia, the Gulf's leading economy. Saudi Arabia spent $265 billion last year, according to International Monetary Fund estimates. If it doesn't alter fiscal policy, it is on pace to run a budget deficit amounting to 1.4% of economic output next year, despite its enormous wealth. Saudi Arabia needs oil to trade at about $97.50 a barrel this year to sustain its spending without running a deficit or tapping reserves, according to the IMF. Oil prices fell below Saudi's break-even budget level in July and have remained below it since. The break-even levels for the Gulf countries apart from Qatar and Kuwait are already above current oil prices. Light, sweet crude futures settled at $76.51 in New York on Friday. Brent crude, the leading European oil benchmark, traded at an average of around $110 a barrel between 2011 and 2013. Spending also has ballooned in the U.A.E., where Abu Dhabi pledged last year to build $90 billion of projects through 2017--many of them with the help of foreign companies. Bahrain, Qatar, Oman and to a lesser extent Kuwait have been on spending sprees, too. The Gulf's big energy exporters, including Saudi Arabia, Kuwait, the U.A.E. and Qatar, could try to fight the decline in oil prices. As some of the most influential members of the Organization of the Petroleum Exporting Countries, the cartel of big oil producers, they could agree to cut output in a bid to buoy prices. But the group has so far failed to reach any consensus about reining in production, and it is unclear how much impact OPEC would have on prices if it did act. The countries also could issue debt or tap into government savings if current oil receipts can't pay for planned expenditures, tiding them over while they make budget adjustments. In the U.A.E., for example, there was "no need now to adjust very quickly to lower revenues" because of the existence of the Abu Dhabi Investment Authority and other sovereign asset pools, said Harald Finger, the head of the IMF's mission to the country. Still, Gulf countries are reluctant to drain sovereign-wealth funds, together estimated at more than $1 trillion, leaving spending cuts as the only other option outside of borrowing. Such cuts, however, could endanger spending that has been a boon to foreign companies and investors. U.S. construction company Bechtel Group Inc. and Germany's Siemens AG won contracts to help build a $23.5 billion metro in Riyadh last year, while Royal Dutch Shell PLC signed a deal in 2012 with Qatar Petroleum to build a huge new petrochemicals complex in Qatar. If Gulf countries do decide to dip into sovereign funds, it could force a pullback by some of the world's most active institutional investors. Gulf funds have spent billions of dollars in recent years on everything from London real estate to Australian and U.S. infrastructure, and have served as key financial backstops for large Western banks in the throes of the financial crisis. Funds in Abu Dhabi and Qatar helped rescue Citigroup Inc. and Barclays PLC in 2007 and 2008. In an era of greater austerity, funds may still make new investments using dividends and investment gains, but the flow of Gulf money into international markets could be slower. The shift toward domestic spending has already prompted changes in sovereign-fund allocations in Qatar, where more new energy revenues have been flowing directly to the government, bypassing the Qatar Investment Authority, its main sovereign-wealth fund. The QIA "has been changing its strategy, becoming less illiquid and Europe-centric on the international side and more engaged in the local economy," said Victoria Barbary, the director of Institutional Investor's Sovereign Wealth Center, a London-based research group. The IMF, meanwhile, recently reiterated calls to rein in spending. Christine Lagarde, the IMF's managing director, in October said Gulf countries needed to balance budgets more urgently given the oil-price decline. The financial realities faced by oil-rich Gulf countries and the investors and companies that have grown used to high prices are stark. "I think the Gulf economies will have to project fiscal discipline," Mr. Sfakianakis, the Ashmore director, said. "They don't want to be seen as profligate." Write to Asa Fitch at Credit: By Asa Fitch
Subject: Petroleum industry; Budget deficits; State budgets; Crude oil prices
Location: Kuwait Oman Bahrain Qatar Saudi Arabia
Company / organization: Name: Institute of International Finance Inc; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154852
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright own er. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Control of Syrian Oil Fuels War Between Kurds and Islamic State; Impoverished families in northeast Syria refine oil distributed by the warring sides to buy loyalty--or face the consequences.
Author: Dagher, Sam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials. The Kurds produce about 40,000 barrels of crude oil a day from wells they control, according to Kurdish officials here.
Full text: AL-YAROUBIYAH, Syria--Plumes of black smoke billow on the horizon of this border town in northeast Syria, a thumb-shaped corner of the country that pokes into neighboring Turkey and Iraq. The smoke isn't from war, but it rises from the deadly fight over resources between Islamic State and Kurdish fighters. Men, women and children operate thousands of primitive metal kilns to refine crude oil distributed by the warring sides to buy loyalty. Residents sell the fuel they make to black-market traders. With oil now the only stable income in these impoverished rural communities, each side offers a choice: Fight us and die. Or, join us and earn a living. The U.S. seeks to expand its support of fighting Islamic State for control of the towns and villages bound by the Tigris and Euphrates rivers. The Wall Street Journal found the conflict as murky as the sludge that spills from the makeshift kilns onto land grazed and farmed since Biblical times. As one 27-year-old tribesman said, local Arabs are eager for oil income but most hate the Kurds as much as they fear Islamist militants. Islamic State controls most of the southern section of Syria's Hasakah province and nearly all of the adjacent Deir Ezzour province, both rich in oil and gas, as well as most of nearby Raqqa province. For Islamic State, Hasakah province is an integral part of its self-proclaimed caliphate that currently stretches from the outskirts of the northern Syrian city of Aleppo to the fringes of Baghdad, the capital of Iraq. The militants use oil money to secure allegiance and support their war, according to interviews with tribal leaders, Islamic State militants and Kurdish military and intelligence officials. Sharing profits with tribal elders and their followers also keeps a steady supply of Islamic State recruits, these people said. The United Nations and some analysts estimate that Islamic State produces roughly 50,000 barrels a day from oil fields it controls. The effect of recent U.S.-led coalition airstrikes against oil facilities used by the Islamist militants is unclear. A Kurdish paramilitary force claiming more than 30,000 fighters has seized the northern section of Hasakah province and set up a self-rule area that has established courts and passed laws in a bid for permanent autonomy of Kurdish-majority regions in Syria. The force, called the People's Protection Units, or YPG, also controls oil wells and sells crude at a discount to local Arab tribesmen, providing income for both Kurd fighters and local families. The Kurds produce about 40,000 barrels of crude oil a day from wells they control, according to Kurdish officials here. Some of it is sold to the mostly Arab kiln operators at $15 a barrel, they said. Eight barrels of crude yields roughly six barrels of gasoline or diesel fuel, which are sold for an average of $40 a barrel, said one kiln operator. There are an estimated 3,000 refining kilns in Kurdish-controlled areas, officials said, all built since the start of Syria's civil war. Interviews with former Islamic State fighters now held as prisoners by the Kurds, as well as telephone interviews with residents in territory held by Islamic State, reveal similarities in how the two sides run their oil enterprises. Like the Kurds, Islamic State sells crude oil to kiln and refinery operators at discounted prices: On the world market, the crude might fetch $75-$80 a barrel. And like the Kurds, Islamic State hires local residents to protect and operate the oil fields--or join its ranks as fighters--with salaries as high as 100,000 Syrian pounds a month, about $512. The violence that inflames Islamic State's Sunni Islamist extremists against all other Muslims--and all other religions--is focused here instead on control of land, resources, roads and border crossings that yield revenues. "Material gains are what's driving this war, nobody has principles," said Sheikh Humeidi Daham al-Jarba, a septuagenarian recognized as one of the leaders of Shammar, one of the largest Bedouin tribes in the Middle East. "For as far as I can remember," he said, "these three provinces never had their own direction, always with the strongest and the power on the ground." Mr. Jarba, who has joined forces with the , recently formed a Shammar militia to help fight Islamic State, which lurks as close as 20 miles southwest. In July, he was given the honorary post of governor of the al-Jazeera canton, one of the new Kurdish self-rule areas. Armed members of Mr. Jarba's new militia, Jaish al-Karama--"Army of Dignity," in Arabic--guard the entrance of his gated compound, which has large sofa-lined rooms to host tribal meetings. Many of the guards wear checkered red-and-white kaffiyehs, or head scarves, and leather gun holsters. Fuel tankers, SUVs and pickup trucks speed past on the main road. Oil refining is the chief livelihood in Ali Agha, a nearby village that survived on agriculture until 2005 ushered in five years of drought. Most of the remaining 400 residents have homes made of mud-brick walls and a roof of mud over straw and wood pillars. They rely on small generators for power. Water is drawn from nearby wells. Sewage passes through plastic pipes to a dump outside the village. There is a single school, which ends at ninth grade. In an agreement overseen by Mr. Jarba and replicated in other villages, residents pledged to support Kurdish forces and denounce anyone joining Islamic State. "Life is hard and we struggle just to put food on the table," said one resident, who nonetheless sees his village as better off than others in the region. The area's troubled history under the Syrian regime, which also used oil money to reward and punish local Kurds and Arabs, paved the way for Islamic State conquests this summer, analysts and residents said. Syrian government forces now have only a limited presence in two cities of the region. As Hafez al-Assad, Syria's late strongman and father of the current president, began consolidating his power in 1970, he sought to subdue the resource-rich tribal areas, according to residents and tribal elders. Arabs from other parts of Syria were resettled here, with the most loyal granted the best land. Local tribal and social structures disintegrated in the power shift. Kurds, whose towns and villages were renamed in Arabic, were the biggest losers. In the years before the uprising against President Bashar al-Assad in March 2011, people who pledged allegiance to the regime were rewarded with jobs and business in agriculture, oil and trading, said landowners and residents. Once civil war broke out, the Assad regime focused on protecting Damascus and other cities to the west, largely abandoning land and resources here. Fawaz al-Bechir, a leader from the Baggara tribe, which is concentrated in Syria's Deir Ezzour province, said he laughed when Syrian security officials in Damascus had asked him to rally his tribesmen to fight Islamic State. "I told them, 'For decades you did everything to undermine our authority and weaken us and now you want us to help?'" Mr. Bechir said. The only way he can control his people is if he can pay them salaries or provide oil to compete with the Kurdish forces and Islamic State. In the ensuing war, residents said, they looked to any group offering protection and steady work. Hasan al-Khalil, an Arab tribesman and landowner who has joined forces with the Kurds, said it was understandable for people who had thrived under the regime to seek a similar accommodation with Islamic State. "They will do anything to stay on top of the tribal pyramid," he said. When protests against Mr. Assad erupted, Mr. Jarba, the Shammar chieftain, said he discouraged his people from taking part. "Visibility was poor so to speak," he said, "and we couldn't tell where things were headed." Karim al-Mifleh didn't take his leader's advice. Mr. Mifleh, 19 years old, said he and some of his 30 siblings--his father has three wives--engaged in protests. In 2012, he dropped out of ninth grade to join a rebel group set up by Mr. Jarba's cousin and linked to the Free Syrian Army, the secular rebel coalition backed by Saudi Arabia, Turkey and the U.S. The militia swelled to some 10,000 men, mostly Shammar and related tribes and clans. Needing more funds for salaries and overhead, the group seized oil wells and took over the refining and sales, Mr. Mifleh said. He was paid 60,000 Syrian pounds, about $307, for guarding the wells. Islamist rebels arrived in the region in early 2013, seeking a share of oil and other resources, including grain stores. At first, they joined forces with Mr. Mifleh's Shammar-dominated group. They ousted Assad regime forces from the Yaroubiyah border crossing in March 2013. But the rebel groups had a falling out--in part over the rising power of the Kurdish forces. Many fighters, including Mr. Mifleh, were absorbed by Islamic State, which was gaining strength. The Kurdish militia fighters toward the middle of 2013 captured the Yaroubiyah border crossing, along with most of the oil wells and grain silos, from Islamist rebels. At the time, Mr. Mifleh's father and some of his brothers were living in the Yaroubiyah area claimed by the Kurds. Mr. Mifleh and other fighters were captured in June by the Kurds after Islamic State launched a botched offensive to seize the border town, surrounding villages and nearby oil wells. Mr. Mifleh is now in a prison run by Kurdish forces. His father, who works in the oil business under the protection of Kurds, has disavowed him for joining the militants. In Islamic State territory to the south, fighters exploit local tribal tensions, playing one against the other, Mr. Mifleh said. They mistrust locals, referring to them in Arabic as supporters as opposed to those who have pledged allegiance. The militants also seek to foster enmity among Arabs toward Kurds. "They plant in our heads that Kurds are traitors and infidels who should be fought," he said. Last month, Islamic State fighters kidnapped two Arab truck drivers transporting crude oil bought from the Kurds, a Kurdish security officer said. The drivers were killed, he said, and their heads were then severed and hung from the trucks on a main road not far from Yaroubiyah--a warning to residents about cooperating with the Kurds. In September, Islamic State recaptured four villages next to the border crossing here at Yaroubiyah. Kurdish security and military officials say the group is determined to seize the strategic border crossing, along with surrounding grain and oil resources. The threat of an Islamic State attack loomed over a meeting last month in Yaroubiyah organized by the Kurds to help Arab residents, mostly Shammar, choose neighborhood councils and leaders. Arab men, some in tribal dress, and women covered up except for their eyes, sat at classroom desks moved to the courtyard of a school for the meeting. Children giggled and played. "We need people to volunteer for the neighborhood watch, you will coordinate directly with the Asayish," said the organizer referring to the Kurdish police. "You will report any suspicious person or car." No one raised a hand. "Come on, anyone, this is for your sake," the man said. On a stretch of road outside of town, one villager had set up a makeshift gasoline station with a pump and two metal tanks filled with fuel from a nearby kiln. "Abu Luay's Fuel" was spray-painted in Arabic on one of the tanks. Mohammad Nour al-Akraa in Beirut contributed to this article. Write to Sam Dagher at Credit: By Sam Dagher
Subject: Islam; Muslims; Religious fundamentalism; Military air strikes; Islamism
Location: United States--US Iraq Syria Turkey
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154899
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Furt her reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Loosens Debt Terms for Venezuela; With Default Threatening the Economy as Oil Prices Tumble, Caracas Gets a Lifeline From Its Biggest Creditor
Author: Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract: None available.
Full text: CARACAS, Venezuela--South America's most economically troubled country, facing fears of a debt default amid tumbling oil prices and a cash crunch, has been thrown a lifeline by its largest lender, China. The Asian giant loosened repayment terms on the nearly $50 billion in loans it has granted Venezuela since 2007, according to Venezuela's Official Gazette. And President Nicolás Maduro said in a speech last week that his finance minister, Rodolfo Marco, would soon travel to China to try to secure new loans. Mr. Maduro's popularity has plummeted to 30%, polls show, as Venezuela's currency collapses and the government struggles with the world's highest inflation rate and widespread scarcity of basic goods. The country's woes threaten the future of what Mr. Maduro's predecessor, the late President Hugo Chávez, called 21st Century Socialism. Analysts say Beijing's flexibility may buy Mr. Maduro more time. Last week the president used a $4 billion Chinese credit, traditionally earmarked by the Chinese government for infrastructure projects and held in off-budget funds, to increase reserves to $23.2 billion. China also recently lent $1.3 billion to help Argentina buoy falling reserves, giving President Cristina Kirchner, a close ally of Mr. Maduro, a cushion to help alleviate that country's cash crunch. Beijing's largess may appear irrational given economic policies in Venezuela and Argentina that do not appear sustainable, said Barbara Kotschwar, a scholar who tracks Chinese investment in Latin America at the Peterson Institute for International Economics in Washington. "On the other hand," Ms. Kotschwar said, "they are so invested in Venezuela's oil industry that they may have calculated that a political crisis would have a negative impact on their return on investment or on Venezuela's repayment of loans." Venezuela's oil revenues, which account for 96% of the country's dollar income, are down by 35% in the past month, Mr. Maduro said in a speech last week in which he tried to assure his countrymen that the government was taking steps to safeguard against the consequences of the drop in oil prices. Venezuela, hemorrhaging money through a Byzantine set of three official currency exchanges, was experiencing dollar shortages even with oil at $100 a barrel. On Friday, though, the country's average heavy crude oil price fell under $70 a barrel for the first time in four years. As the oil exporter seen as most vulnerable to the commodity's slide, Venezuela has been pressing fellow members of the Organization of the Petroleum Exporting Countries to take measures to rescue prices at the cartel's next meeting Thursday in Vienna. Amid the slump, China last month scrapped the requirement that Venezuela ship at least 330,000 barrels of oil a day as payment for its existing loans. The reduced shipments of Venezuelan crude to China reflect the surplus in international oil markets as well as the Chinese economy's slower growth, but they also amount to a mutually beneficial arrangement. Venezuela can divert more of its oil to cash customers, instead of using it for debt repayment. China, meanwhile, can play the long game, helping stabilize the Venezuelan economy while keeping the door open to an important market for its oil-services, drilling, mining, appliances and construction companies. China's biggest investments here are in the vast Orinoco heavy-oil belt, where Beijing has pumped billions of dollars into a joint venture with state energy giant Petróleos de Venezuela SA, or PdVSA. "The whole idea of China getting into Latin America is to secure their supply lines, and in the short term they are secure," said Russ Dallen, managing partner at brokerage Caracas Capital Markets. "They are patient." News of the loosened Chinese loan terms bolstering Venezuelan international reserves--down 21% from 2012--sparked a rally last week in Venezuelan bonds, which are the highest yielding in the developing world because of the perceived risk. Analysts at the risk consultancy Eurasia Group said in a recent report that China's new terms will likely help Venezuela avoid a default next year. They also buy Mr. Maduro time to consider politically costly adjustments that economist say are necessary to plug a fiscal shortfall they estimate will reach 20% of gross domestic product in 2015. Those reforms include reducing a domestic gasoline subsidy that costs the state more than $12 billion a year and cutting back on overseas spending, including a program that provides cheap oil to more than a dozen Caribbean countries. Venezuela's benchmark sovereign bond maturing in 2027 rose on Monday to 56.41 cents on the dollar with a yield of 18.2%, compared with 53.7 cents at the start of last week. By far, the juiciest yields come from PdVSA bonds, which mature in 2017, offering just over a 28% yield, compared with 31.5% a week earlier. Write to Kejal Vyas at Credit: By Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627154952
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627154952?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Slip as Big OPEC Cut Looks Unlikely; Market Watchers Remain Focused on Nov. 27 Cartel Meeting in Vienna
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
[...]U.S. investment bank Morgan Stanley says the market shouldn't ignore oil-producing countries that aren't members of OPEC.
Full text: Oil prices wavered Monday before settling lower on expectations that the coming meeting of the Organization of the Petroleum Exporting Countries would fail to stem a monthslong plunge in oil prices. Light, sweet oil for January delivery fell 73 cents, or 1%, to $75.78 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 68 cents, or 0.9%, to $79.68 a barrel on ICE Futures Europe. Prices rose earlier in the session on news that negotiations between Iran and six world powers to curb Iran's nuclear program are to be extended past Monday's deadline. Sanctions on Iranian oil exports, which are keeping hundreds of thousands of barrels of oil off the global market, haven't been lifted. However, market watchers remained focused on the Nov. 27 OPEC meeting. Oil prices have plummeted in recent months on concerns about ample global supplies. The cartel, which controls about one-third of global oil output, is currently producing above its collective production quota of 30 million barrels a day. Analysts say the group would have to cut production by at least a million barrels a day to bring global supplies closer in line with demand. However, OPEC members, including top exporter Saudi Arabia, have signaled that the group is unlikely to make a big collective cut. Saudi Arabia's oil minister said Monday that this isn't the first time the market has been oversupplied, damping expectations that the kingdom plans to reduce production. "Failure [by OPEC] to convince the market that it is prepared to take some major steps to improve market balances is likely to result in heavy selling of oil," said analysts at Barclays in a note. Price swings could be more volatile Thursday because trading will be thin as U.S.-based traders take the day off for Thanksgiving. Trading in both the U.S. and Brent benchmark contracts will be halted for most of the afternoon, Eastern time, on Nov. 27 for Thanksgiving. However, the OPEC meeting, which will take place in Vienna, will likely conclude when it is still morning in New York. Some analysts said the failed Iranian negotiations make it less likely that OPEC will cut production this week, because the members won't have to contend with more Iranian crude flooding the market. "I don't think they're going to do much of anything," said John Kilduff, founding partner at Again Capital in New York. Prices "will grind lower after the meeting." December reformulated gasoline blendstock, or RBOB, fell 2.31 cents, or 1.1%, to $2.0334 a gallon. December diesel settled down 0.9 cent, or 0.4%, to $2.3955 a gallon. Summer Said and Benoît Faucon contributed to this article. Write to Nicole Friedman at Corrections & Amplifications An earlier version of this article misstated the diesel price. Credit: By Nicole Friedman
Subject: Crude oil prices; Crude oil; Petroleum industry; Futures; Petroleum production
Location: United States--US Iran Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: Commonwealth Bank of Australia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627155071
Document URL: https://login.e zproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627155071?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Isn't All that Ails Petrofac; The Company Is in a Tricky Transition Period
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
[...]the services unit brings with it other risks that are proving difficult to predict or understand. [...]that changes, Petrofac likely won't get the benefit of the doubt that it can stay tough under fire.
Full text: Applying stress is one way to test strength. At Petrofac, the cracks are just starting to show. Tumbling crude prices, down 30% since June, . But Petrofac, which on Monday said next year's earnings would be 26% below the consensus forecast, has problems that go beyond its critical commodity. About a quarter of the downgrade to next year's earnings relates to the oil price. Petrofac said that, based on current futures prices, oil's decline could knock $45 million off its previous guidance for 2015. This is really a function of . Most oil-field services companies experience the pain of oil's plunge indirectly, as their biggest clients cut back on spending. But the U.K. engineering and construction company also co-invests in upstream projects through its integrated energy services (IES) unit. This leaves it directly exposed as the value of its share of production falls. True, some changes to Petrofac's guidance relate to its core engineering and construction business. A write-down to the troubled Laggan-Tormore project in Shetland is a blow, as is the assumption of no profit on that contract next year. The problems with the project are largely weather related, so at least shouldn't bode ill for others in Petrofac's portfolio. But it is the services division that now has form in producing unpleasant surprises. It generated only 20% of first-half operating profit this year but accounts for two-thirds of next year's earnings downgrade. Contract renegotiations led to slower work on two projects, hitting production and earnings next year. Worse, delays at the Great Stella project in the North Sea will push back first production. That means the services business won't generate cash until 2016, rather than next year, extending a tricky transition period for Petrofac. It is still trying to prove the worth of its new venture, launched in 2011. Net debt will stay at peak levels for longer; Petrofac, until last year, generally operated with net cash on its balance sheet. Petrofac, which at about seven times forecast earnings is trading at a steep discount to peers, should be a defensive bet in this market. Its engineering and construction business has a record business backlog and is focused onshore rather than offshore, where the spending slowdown is expected to be sharpest. About 70% of its business comes from national oil companies, which are more likely to keep investing than their listed, international counterparts. But the services unit brings with it other risks that are proving difficult to predict or understand. Until that changes, Petrofac likely won't get the benefit of the doubt that it can stay tough under fire. Write to Helen Thomas at Credit: By Helen Thomas
Subject: Profits; Petroleum industry
Location: United Kingdom--UK
Company / organization: Name: Petrofac; NAICS: 541330, 236210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: No v 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627155080
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq Oil Minister Says Oil Prices 'Are Not Acceptable'; Adel Abdul-Mehdi Says Action Should Be Taken to Raise Prices
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
VIENNA--Oil prices aren't acceptable at their current level and action should be taken to raise them, Iraq's oil minster, Adel Abdul-Mehdi, said as he arrived here Monday ahead of this week's meeting of the Organization of the Petroleum Exporting Countries.
Full text: VIENNA--Oil prices aren't acceptable at their current level and action should be taken to raise them, Iraq's oil minster, Adel Abdul-Mehdi, said as he arrived here Monday ahead of this week's meeting of the Organization of the Petroleum Exporting Countries. Prices have plunged more than 30% since June, roiling OPEC members like Iraq that rely on high prices for government revenue. "They are not acceptable, of course not. A means should be used to raise the prices," Mr. Abdul-Mehdi said. The comments come ahead of a tough meeting for OPEC, which must decide whether to cut its output to help stabilize the market. "Most important is the unity of OPEC, that we reach an agreement together to control the oil prices," Mr. Abdul-Mehdi said. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Petroleum industry; Crude oil prices; Price increases
Location: Iraq
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627155097
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Oil Minister: Oversupply Not Unusual; No Comment on Any OPEC Move; Ali al-Naimi Gives No Opinion on Calls for a Cut in Production Before Meeting This Week
Author: Said, Summer; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract: None available.
Full text: VIENNA--Saudi Arabia's oil minister on Monday suggested current high levels of supply in global oil markets aren't unusual, but declined to comment on the kingdom's likely stance at this week's crucial meeting of the Organization of the Petroleum Exporting Countries. Speaking to reporters as he arrived in Vienna ahead of Thursday's OPEC gathering, Ali al-Naimi asked, "Is this the first time we have oversupply?" That came in response to a question about the current balance between supply and demand in oil markets. Some OPEC members, such as Venezuela, have been calling for several months for the group to cut its oil production following a 30% fall in oil prices. But asked what course Saudi Arabia, OPEC's largest producer, would support, Mr. al-Naimi said, "For the last 20 years, you have been asking me questions. May I ask you a question, what should OPEC do?" Write to Summer Said at Credit: By Summer Said And Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627155623
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627155623?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Is It Time for the U.S. to Lift Its Restrictions on Oil Exports? Jason Bordoff on Why It Would Be Smart, Tyson Slocum on Why It Would Be Risky
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Nov 2014: n/a.
Abstract:
[...]the U.S. oil price may fall further below the world price. [...]some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use.
Full text: It's a whole new oil world for the U.S. After decades of declining domestic oil production, the country is in the middle of an unexpected boom. Driven by new technology that reaches previously inaccessible reserves, production has soared by millions of barrels a day. This surge has been a key factor driving oil prices down. So, should U.S. oil companies be allowed to sell that oil overseas? Because of a restriction dating back to the oil scares of the 1970s, producers for the most part can't export their oil. The export ban was part of a series of laws passed to ease supply concerns and prevent U.S. producers from skirting price controls by selling crude into the world market at higher prices. Now there's a growing call to lift that ban, from oil companies and others. The game has fundamentally changed, they argue. Allowing American oil to flow onto the global market will encourage more production, since the fuel will fetch higher prices than it could at home. It will also pump more cash into the U.S. economy and over time may end up driving down the price of gas for Americans. Opponents say that isn't the case. Lifting the ban, they say, will drive up prices of gas and oil for American industries that depend on them, discourage innovation among energy companies and hurt the environment. Jason Bordoff, a Columbia University professor and former energy adviser to President Obama, argues in favor of lifting the ban. Tyson Slocum, director of the Energy Program at Public Citizen, makes the case for keeping the ban in place. Yes: It's Smart For Both Economic and Geopolitical Reasons By Jason Bordoff The oil-export ban was put in place to address scarcity concerns and keep U.S. producers from bypassing price controls by selling oil for a higher price abroad. Now, with U.S. output soaring and price controls jettisoned decades ago, it is time to lift that restriction. Although the magnitude of the benefits is uncertain, allowing U.S. producers to sell into global markets would likely spark more domestic oil production, leading to increased U.S. economic activity, a lower petroleum trade deficit, increased global oil supply and perhaps lower gasoline prices. Opening the Doors Currently, many American refineries are set up to handle a different type of oil than we produce domestically. As U.S. supplies continue to grow, producers may increasingly need to discount their price to make it economic for refineries to buy their oil. As a result, the U.S. oil price may fall further below the world price. Although the U.S. is expected to remain a net importer, allowing companies to export certain types of oil and import others means they can sell into the global market for a higher price than they can fetch domestically. That will spur more U.S. production--and thus reduce net imports. Critics say keeping oil at home helps protect us from oil-price shocks, but the oil market is global. A disruption anywhere will cause prices to go up in the U.S., whether we export or not. Nonetheless, cutting net imports means the macroeconomic impact of oil-price increases won't be as severe. Why? More of the increased spending on oil circulates in the U.S. economy instead of flowing overseas. Exports also allow U.S. supply to better respond to global prices and temper supply shocks. Geopolitically, the oil-export ban can undermine U.S. credibility in challenging trade restrictions and promoting open markets elsewhere, while boosting U.S. output could erode OPEC's market share and pricing power. The Effect on the Pump Another criticism is that exports will benefit producers but raise pump prices. But a recent Energy Information Administration study showed consumer gasoline prices move with the global oil price, not the domestic price. To the extent that lifting the ban increases U.S. production and overall world supply, it may cause global prices to decline slightly. Then there is the argument that higher production hurts the environment. It is true that oil and gas development can have environmental impacts, and to the extent that exports boost U.S. supply, lower world oil prices and thus increase oil use, carbon emissions would rise. But trade barriers aren't the appropriate response to environmental concerns. The U.S. is poised to produce vast quantities of oil whether we export or not, which is why adequate environmental regulation is essential along with robust climate policies. Finally, some maintain that oil exports will reduce the incentive for companies to innovate and develop ways to reduce oil use. But innovation is driven by policy, R&D investments, consumer response to prices and entrepreneurs, universities and national laboratories. Suppressing U.S. oil prices will not spur the breakthroughs we need. The current statutory restrictions on oil exports are a legacy of a bygone era that doesn't reflect today's energy reality. On economic, security and geopolitical grounds, they should be lifted. Mr. Bordoff, professor of professional practice in international and public affairs and founding director of Columbia University's Center on Global Energy Policy, previously served as an energy adviser to President Obama. He can be reached at . No: The U.S. Would Be More Vulnerable To Supply Disruptions By Tyson Slocum Removing the export ban is a shortsighted move that will have bad consequences both for consumers and for the economic future of the U.S. The current oil boom--coupled with flatlining domestic demand--has led to a huge glut that helps insulate the American economy from the uncertainty caused by oil-supply disruptions abroad. Opening exports would remove that protection, which would be disastrous. Booming domestic production hasn't brought us anywhere near oil independence: The American economy remains addicted to oil, and we remain vulnerable to international supply shocks and punishing price swings. Oil prices have jerked repeatedly since the mid-2000s in response to supply constraints and demand trends. The future will be no less volatile. The Price at the Pump What's more, opening exports will make oil and gas much more expensive for Americans. As oil producers head overseas to fetch higher prices than they could get at home, domestic supplies will dry up, and the cost will rise. Oil is literally a fuel for economic activity. To increase the cost of that feedstock would benefit oil extractors at the expense of everyone else. What about studies projecting that unconstrained crude-oil exports will lower domestic prices rather than raise them? In general, they conclude that exporting oil will raise the key U.S. oil benchmark price (West Texas intermediate, or WTI) but will lower an international benchmark by which some portions of the U.S. gasoline market are priced (Brent). Following the money, however, one sees that nearly all of these private studies have been funded by companies that benefit from exporting oil. And the studies dismiss the possibility that more U.S. gasoline markets could link to WTI and rise as the U.S. benchmark price rises. It is true that Brent does price a lot of the gasoline market. But that dynamic is due to historic trends, where much of the U.S. market had to rely on imports and was exposed to Brent pricing. The recent glut in domestic oil can change this dynamic and potentially send gasoline prices lower. But if we allow exports, that glut will disappear. Some supporters of exporting also say we need to allow exports to achieve credibility in trade talks. But crude oil has long been exempt from trade negotiations, so the ban is a nonfactor. True Economic Strength There's a broader point here. We must learn from Nigeria, Russia and Venezuela that an economy that prioritizes raw natural-resource exports fails to properly develop true engines of prosperity. The strength of the U.S. economy will be in the development of a strong technology sector--which is at odds with a strategy to export crude oil. Any informed observer of energy markets recognizes the real revolution is in clean-tech technology. Discarding the export ban would boost prices and dull the incentive to use oil as an industrial feedstock, including for photovoltaic cells, wind turbines and advanced batteries. Then there is the environment. As with any extractive industry, the impacts of fracking on precious resources will be exacerbated by the increase in fracking should the ban be lifted. The real issue: One segment of the economy--the oil industry--is waging a campaign to convince a skeptical public that an economic-protection statute is no longer needed and Americans will be better off shipping our crude directly to China. Domestic oil should be used domestically. Mr. Slocum is director of the Energy Program at Public Citizen. He can be reached at .
Subject: Petroleum refineries; Exports; Petroleum industry; Energy policy; International trade; Wage & price controls; Trade restrictions; Petroleum production; Gasoline prices; Energy industry
Location: United States--US
People: Obama, Barack
Company / organization: Name: Columbia University; NAICS: 611310; Name: Public Citizen; NAICS: 541820, 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 24, 2014
Section: Special
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627156488
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Anxiety on OPEC Stalls Oil Trading
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]25 Nov 2014: C.6.
Abstract:
According to the Nymex schedule, electronic trading will run until 1 p.m. New York time on Thursday, instead of the usual 5:15 p.m., and a closing price won't be set until the conclusion of regular trading on Friday.
Full text: Some traders and investors are stepping back from the oil market ahead of the most widely watched OPEC meeting in years, anticipating that thin holiday trading could exacerbate big price swings. Oil experts say the Organization of the Petroleum Exporting Countries, which controls roughly one-third of global crude output, needs to curb production by at least 3%, or one million barrels a day, to bring supplies closer in line with demand. Such a move could put a floor under oil prices, which have slid about 30% since mid-June. On Monday, oil prices fell 73 cents, or 1%, to $75.78 a barrel on the New York Mercantile Exchange. OPEC is scheduled to meet on Thursday in Vienna. Many oil traders in the U.S. will be taking the day off for Thanksgiving. According to the Nymex schedule, electronic trading will run until 1 p.m. New York time on Thursday, instead of the usual 5:15 p.m., and a closing price won't be set until the conclusion of regular trading on Friday. Closing prices are used to calculate averages, which underlie many trades and contracts used in the market. Trading in the Brent crude contract on ICE Futures Europe is to stop at 1:30 p.m. New York time on Thursday. The uncertainty about the meeting's outcome and concerns about the ease of trading have prompted some investors to rein in their bets. Tariq Zahir, managing member of Tyche Capital Advisors, said he has closed out some positions ahead of the OPEC meeting and has only about one-fifth the exposure to the oil market that he usually does. He will be watching the market on Thanksgiving for trading opportunities, he said. "With so many people traveling and out . . . you could see some extra volatility, which creates opportunity for guys like us, if you're on the desk," Mr. Zahir said. Mr. Zahir said he believes that either OPEC will decline to cut output, at the insistence of No. 1 oil exporter Saudi Arabia, or that any cut will be symbolic. Officials from Saudi Arabia and other OPEC member nations have signaled that the group is unlikely to make a large, coordinated cut. On Monday, Saudi Arabia oil minister Ali al-Naimi declined to comment on the kingdom's stance. Instead, Mr. al-Naimi noted that this isn't the first time the market has been oversupplied, further damping expectations that Saudi Arabia will respond to current market conditions by reducing production. If the group keeps production steady or reduces output by only a small amount, prices could fall further, traders say, while a surprise large cut could send futures spiking. Mr. Zahir isn't the only one scaling back bets; the number of futures and options contracts outstanding in the Nymex market fell 13% in the week ended last Tuesday to 2.1 million, the lowest level since Sept. 30, according to the U.S. Commodity Futures Trading Commission. Money managers cut their bets on rising prices in the week ended Nov. 18 and added to bets that prices would fall, underscoring the belief OPEC is unlikely to significantly cut output. Negotiations on Iran's nuclear ambitions may also influence the outcome of the OPEC meeting, some analysts say. Iran and six world powers failed to reach an agreement to curb the country's nuclear program on Monday and extended talks until the end of June, meaning that sanctions on the fifth-biggest producer in OPEC are likely to stay in place. Some analysts said Monday's failure to strike a nuclear deal with Iran makes it less likely that OPEC will cut production this week because members won't have to contend with the possibility of Iranian crude flooding the market. "Based on all of the information and opinions floating around the market, I would say that the best position heading into the OPEC meeting . . . would be a flat position," wrote Dominick Chirichella, analyst at the Energy Management Institute, in a note released last week. "There will be ample opportunity once the meeting is over to enter into the appropriate trading position." John Kilduff, founding partner at Again Capital in New York, said he has cut his bets. "I doubt I'll have to trade" on Thanksgiving Day, said Mr. Kilduff. "Unfortunately, the computer will be a fixture in the background." --- Summer Said and Benoit Faucon contributed to this article. Credit: By Nicole Friedman
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.6
Publication year: 2014
Publication date: Nov 25, 2014
column: Commodities
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627212123
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Slide as OPEC Deal Appears Elusive; Benchmark U.S. Oil Prices Sink to New Four-Year Low
Author: Berthelsen, Christian; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract:
Beyond a straightforward decision on whether to reduce production, the group could choose incremental cuts, it could allocate decreases among certain members of the group but not others, or it could emerge saying it won't cut but it will strictly enforce its production quota of 30 million barrels a day, which it often exceeds.
Full text: Benchmark U.S. oil prices sank to a new four-year low on Tuesday amid signs of a lack of agreement among OPEC members on a need to cut production and shore up the market. The Organization of the Petroleum Exporting Countries is scheduled to meet in Vienna on Thursday to seek a consensus on whether and how to reduce output and stabilize prices, which have fallen more than 30% since mid-June amid growing global oil surplus. But signals sent by individual member nations thus far suggest there is little agreement on the matter, including how it would be achieved. On Tuesday, member nations Saudi Arabia and Venezuela apparently held an impromptu meeting with nonmembers Mexico and Russia, but the group broke up without announcing any kind of proposal. Igor Sechin, head of Russian state oil company Rosneft, said that Russia couldn't immediately cut production anyway and that "the current price level isn't critical for us." Oil futures had been treading water early in the trading session ahead of Thursday's meeting but dived after those developments. The U.S. contract for January settled down $1.69, or 2.2%, at $74.09 a barrel on the New York Mercantile Exchange, its lowest level since Sept. 21, 2010, while the global Brent contract for January fell $1.35, or 1.7%, to $78.33 a barrel on the ICE Futures Europe exchange. "I think the market's taking that negatively as if there aren't going to be any production cutbacks from OPEC," said Andrew Lebow, a trader at Jefferies. "The market today is just growing somewhat anxious about whether there are going to be production cuts." The market pared losses in midafternoon there may be preliminary agreement among member nations, including de facto leader Saudi Arabia, to more strictly enforce the existing production quota of 30 million barrels a day. Such a move could remove at least 300,000 barrels from the market based on recent data. Still, it would fall short of the 1 million-barrel cut analysts say is necessary to stabilize the global supply-and-demand balance, and thorny questions remain about how the reduction would be apportioned among members and enforced. The market gave back gains as it faded into the close. In the U.S. domestic market, traders are awaiting the latest weekly inventory data from the U.S. Energy Information Administration for a window into current U.S. supplies. Crude oil inventories are expected to fall by 100,000 barrels according to a survey of analysts by The Wall Street Journal, while gasoline inventories are expected to rise 1.1 million barrels, distillate inventories are expected to fall 900,000 barrels and refinery usage is expected to rise 0.4 percentage point to 91.6% of capacity. In its own survey released late Tuesday, industry trade group American Petroleum Institute said crude stocks rose 2.8 million barrels, gasoline remained flat, distillates fell 1.3 million barrels and refinery usage rose 1.2 percentage points. In refined product markets, December gasoline futures lost 0.16 cent per gallon, or 0.1%, to settle at $2.0318 a gallon on the Nymex. December heating oil lost 0.07 cent to settle at $2.3948 a gallon. Benoît Faucon, Summer Said and Sarah Kent contributed to this article. Write to Christian Berthelsen at Credit: By Christian Berthelsen and Nicole Friedman
Subject: Petroleum industry; Cartels; Meetings
Location: Iraq United States--US Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: PIRA Energy Group; NAICS: 541618
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627688476
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627688476?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Inch Lower, Snapping Streak of Record Highs; Renewed Slide in Oil Prices Weighs on Energy Shares
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract:
Wednesday will bring a flurry of U.S. economic reports, including readings on durable goods orders, personal income and new home sales, among others.
Full text: U.S. stocks broke a three-session streak of record highs Tuesday, as a renewed slide in oil prices dragged down energy shares. The Dow Jones Industrial Average slipped 2.96 points, or less than 0.1%, to 17814.94. The S&P 500 index shed 2.38 points, or 0.1%, to 2067.03 and the Nasdaq Composite Index rose 3.36 points, or 0.1%, to 4758.25. The Dow and S&P both retreated slightly from their latest all-time highs, reached Monday. Energy stocks in the S&P 500 fell 1.6%, as to settle at $74.09 a barrel. that to more closely adhere to its production quota of 30 million barrels a day. Still, the move would fall short of an outright production cut, which analysts say is needed to halt a monthslong drop in crude-oil prices. OPEC ministers are scheduled to meet Thursday in Vienna. The session was quiet for stock trading. Traders said volumes were low ahead of the Thanksgiving holiday on Thursday. "It's pretty slow," said Jeffrey Yu, head of single-stock derivatives trading at UBS AG. "It's unlikely there will be a significant move ahead of the holiday season." Even energy stocks were less volatile than in recent sessions, Mr. Yu said, as investors hesitated to make big trades before Thursday's OPEC meeting. Economic data was mixed Tuesday. The Commerce Department reported the U.S. economy grew at its fastest pace in more than a decade during the spring and summer. But readings on consumer confidence and central-Atlantic manufacturing missed forecasts. The Conference Board said that consumer confidence fell to 88.7 in November, while 96.5 was expected, and a measure of manufacturing activity in the central Atlantic region came in below expectations. Growth in the U.S. is widely expected to outpace that of Europe and Asia, where policy makers have introduced stimulus efforts to boost their economies. That has led some investors to favor U.S. stocks. "It's all back to domestic growth," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages more than $9 billion. His firm is picking up midcap and small-cap stocks, rather than larger companies that do business overseas. The GDP report didn't provide much fuel for stocks to move higher, strategists said, because valuations are above long-term averages. The S&P 500 is trading at 16.2 times its expected earnings for the next 12 months, above its 10-year average of 13.9. "No one would accuse the stock market of being screamingly attractive," said Dan Greenhaus, chief strategist at New York brokerage firm BTIG. But "if the economic trend continues, we should have better earnings going forward." Wednesday will bring a flurry of U.S. economic reports, including readings on durable goods orders, personal income and new home sales, among others. The Organization for Economic Cooperation and Development on Tuesday called for more stimulus in the eurozone and a softening of fiscal discipline. The OECD highlighted the eurozone as the weak spot in the global economy. The Stoxx Europe 600 rose 0.2%. Japanese stocks rose 0.3% following a holiday on Monday. In commodity markets, gold futures gained 0.1% to $1197.10 an ounce. Treasury prices rose, pushing the yield on the 10-year note down to 2.261%. In corporate news, Hormel Foods Corp. fell 5.2% after per-share earnings fell shy of expectations. It said revenue for the latest quarter rose 9.5% to $2.54 billion, beating analysts' estimates. Christian Berthelsen and Nicole Friedman contributed to this article. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Petroleum industry; Stock exchanges; Investments; Economic indicators; Crude oil prices; Eurozone
Location: United States--US
People: Wieting, Steven
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627702722
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627702722?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nigerian Central Bank Raises Interest Rate; Move Aimed at Curtailing Speculation Against Currency Battered by Slide in Oil Price.
Author: Cox, Josie; Akingbule, Gbenga
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract:
Attempting to stanch the slide, the Central Bank of Nigeria earlier this month sought to temper dollar demand by barring importers of goods, including electronics, generators and telecommunications equipment, from procuring dollars at its foreign-exchange auctions.
Full text: The Central Bank of Nigeria raised the country's interest rate to a record high on Tuesday, in a move aimed at curtailing speculation against its currency, which has been battered in recent months by the relentless slide in the price of oil. The central bank increased the benchmark interest rate to 13% from 12%, with 9 out of the 11 members voting for the move. It also widened the trading corridor for the naira, allowing it to devalue to an official level of 168 versus the U.S. dollar from about 155, and widened the trading corridor from plus or minus 3% to plus or minus 5%. "Although we had forecast some tightening, the central bank has exceeded expectations," said Razia Khan, head of African macro research at Standard Chartered Bank in London. "[It] has shown absolute commitment to dealing with current challenges [and] we think that these measures deal as comprehensively as possible with the challenges facing Nigeria," she added. Charlie Robertson, global chief economist and head of macro strategy at Renaissance Capital echoed this. This "shows the CBN is serious about defending the new currency level," he said. In a statement, Godwin Emefiele, the governor of the central bank, described the country's fiscal revenue outlook as "not too impressive." "Against this background, the committee is of the view that the current challenge requires bold policy moves on both the demand and supply sides of the foreign exchange market," he said. Markets were closed when the announcement was made, but one trader said that the naira had hardly responded to the news, continuing to hover around the all-time low of 178.25 hit against the dollar in the open markets ahead of the decision. So far this year, the naira has fallen more than 10% against the dollar, placing Nigeria among those oil-rich nations hardest hit by a production glut that has led to a near 28% drop in Brent crude prices in the past three months. Attempting to stanch the slide, the Central Bank of Nigeria earlier this month sought to temper dollar demand by barring importers of goods, including electronics, generators and telecommunications equipment, from procuring dollars at its foreign-exchange auctions. It also limited the amount that money lenders can deposit in the bank's so-called Standing Deposit Facility to 7.5 billion naira, or about $44 million. At the time, traders said that the regulation should boost naira liquidity among banks. Oil and natural gas account for 96% of export revenue in Africa's top producer, and about 80% of government revenue, according to the International Monetary Fund. Write to Josie Cox at Credit: By Josie Cox and Gbenga Akingbule
Subject: Central banks; Interest rates; Foreign exchange markets
Location: Nigeria United States--US
Company / organization: Name: Standard Chartered Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 201 4
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627729549
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Venezuela Seeks Oil Price Up Back at $100 a Barrel; Ahead of OPEC Meeting, Foreign Minister Says His Country and Others Want a Fair Price
Author: Faucon, Benoît; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract: None available.
Full text: VIENNA--Venezuela wants oil prices to return to $100 a barrel, the country's foreign minister said on Tuesday, ahead of an OPEC meeting. Speaking to reporters, Rafael Ramirez, who will represent Venezuela at the Organization of the Petroleum Exporting Countries gathering on Thursday, said "the [oil] price has to be $100 per barrel, [that] is a fair price." Mr. Ramirez made the remarks as he exited a meeting with fellow OPEC member Saudi Arabia and envoys from Russia and Mexico, two key oil producers outside the group. The price of Brent crude, the global benchmark, was quoted at $78.40 a barrel on Tuesday following the meeting, down 1.6%. The Venezuelan official said the four countries at Tuesday's meeting would remain in contact and meet again in three months. "Everybody has their own vision of the market, but everybody agreed that the price level is not good...everybody is worried about the price," Mr. Ramirez said. Write to Benoît Faucon at and Sarah Kent at Credit: By Benoît Faucon And Sarah Kent
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627745908
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
France to Prosecute Total SA Over Iranian Contracts in the 1990s; Oil Company Faces Corruption Charges After Investigation Coordinated With U.S.
Author: Landauro, Inti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract:
U.S. prosecutors alleged in court documents that Total bribed an Iranian official to obtain lucrative oil and gas concessions, in violation of the Foreign Corrupt Practices Act, which is the 1977 law that bars companies that issue securities from paying bribes overseas.
Full text: PARIS--Total SA will face corruption charges in a French court related to contracts made in Iran in the 1990s, a spokeswoman for the Paris prosecutor said on Tuesday. Paris magistrates have decided to put the big French oil company on trial, along with two Iranian nationals. They had also planned to put the company's former chief executive Christophe de Margerie on trial, before he was killed in a plane crash at a Moscow airport last month. No date has been set for the trial yet, said the spokeswoman. The magistrates' decision follows a recommendation made last year by the prosecutor to prosecute the company. Under French law, magistrates can pursue corporations as well as individuals. A Total spokesman on Tuesday confirmed the company had been informed of the magistrate's decision to prosecute it, but he declined to comment further. Total has said in the past that the company and Mr. de Margerie acted in accordance with all applicable French laws in regard to the Iranian contracts in question. If convicted, the company could face a fine of as much as 150,000 euros ($186,000). The French probe into Total's Iranian activities was part of coordinated legal action with the U.S. Department of Justice and the Securities and Exchange Commission, which last year fined the company a combined $398 million in the same case. U.S. prosecutors alleged in court documents that Total bribed an Iranian official to obtain lucrative oil and gas concessions, in violation of the Foreign Corrupt Practices Act, which is the 1977 law that bars companies that issue securities from paying bribes overseas. As part of the agreement with the Justice Department, the company had agreed to hire an outside lawyer to oversee its compliance with anticorruption laws and to invest in its internal mechanisms to look for corrupt payments. After three years, the Justice Department will drop criminal charges if prosecutors are satisfied with Total's efforts. The French and U.S. investigations began in earnest in the mid-2000s. In 2007, a few months after he was appointed chief executive of Total, Mr. de Margerie was questioned for 48 hours by French police who were probing whether the oil company paid bribes to win contracts. Total said at the time all payments were legal. Write to Inti Landauro at Credit: By Inti Landauro
Subject: Trials
Location: United States--US Iran
Company / organization: Name: Securities & Exchange Commission; NAICS: 926150; Name: Department of Justice; NAICS: 922130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627757920
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627757920?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Pressure Seen Mounting on Norway Oil Fund to Shed Coal Assets in 2015; Report Presented by Three Environmental Organizations Urges Shedding Coal Holdings
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract: None available.
Full text: OSLO--Norway's $870 billion sovereign-wealth fund may be forced to shed coal assets such as Coal India Ltd. and China Shenhua Energy Co. Ltd. next year as pressure mounts for Parliament to act on fossil fuel divestments. A report presented in Oslo on Tuesday by three environmental organizations urged Norway to shed the fund's coal holdings. A second report, due next week, could put the fund under still more pressure to cut back on its coal investments. It will examine if climate change is more effectively addressed by preventing the fund from investing in certain coal related companies than by trying to affect change at the companies themselves. The Norway fund's coal holdings are estimated by the environmental organizations at 82.68 billion Norwegian kroner ($12.14 billion) and include Australia's BHP Billiton Ltd., Coal India Ltd. and coal-intensive utilities like RWE AG and E. ON SE. "I'm hoping that it will be a meaningful divestment," said Heffa Schücking of German organization Urgewald, who penned Tuesday's report, adding that the fund should at least exclude companies in the expanding Indian and Chinese coal sectors as well as BHP Billiton, and South Africa's Sasol, which produces liquids from coal. There is currently a Parliamentary majority in Norway to order the sovereign-wealth fund, the world's largest, to divest from coal, a move that could potentially be followed by other institutional investors. Parliament will likely make a final decision by next summer. "Yes, we want to exit coal," Ola Elvestuen, a member of parliament for Norway's Liberal Party, told The Wall Street Journal Tuesday. "To what degree there's need of tough negotiations, we'll need first to get the basis material and the different parties' response before we know." The Norwegian right-wing minority government, supported in Parliament by the Liberals and Christian Democrats, has tasked an expert group to consider the if the fund exits coal,. This is the report that is due to be published next week. "We've said that we'd expect that [an exit from coal] will be the conclusion, but we've said we'll wait for the reports, and discuss it in our party before concluding," Hans Olav Syversen, a Christian Democrat MP, told The Wall Street Journal. "If we do this right, it could also have an effect on other similar funds," said Mr. Elvestuen. Norway's oil fund estimated in January the value of its coal assets at 2.6 billion Norwegian kroner if only pure-play coal producers are included, and up to 116 billion kroner if general mining companies and coal-exposed electric utilities are also included. The expert group will also advise on how to define coal. "We were very negative to exclude coal to begin with, but accepted a Parliament proposal to form the expert group," said Ministry of Finance state secretary Paal Bjørnestad. "Of course, the wider the definition of the coal sector, the bigger the consequences. The portfolio will be less optimal." The Norwegianwas set up in the 1990s to act as the main investment vehicle for Norway's vast oil wealth. It has expanded more than tenfold in the past decade and is expected to be valued at 7.533 trillion kroner by 2020. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627757927
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia Won't Cut Oil Production to Support Prices; Oil Czar's Comment Raises Stakes Ahead of Thursday OPEC Meeting
Author: Marson, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract: None available.
Full text: MOSCOW--Russia's oil czar said the country wouldn't reduce production to support prices, raising the stakes ahead of a crunch summit of the Organization of the Petroleum Exporting Countries on Thursday. Speaking after a meeting with officials from major oil producers Tuesday, Igor Sechin, chief executive of Russian state oil giant OAO Rosneft, said the current oil price "isn't critical for us," adding that Russia couldn't cut oil output immediately, unlike OPEC producers. At Thursday's OPEC summit, officials are to discuss potential responses to a 30% fall in the oil price since the summer. Russia isn't a member of OPEC, but the decline has damaged its economy and pushed its currency lower. Venezuelan Foreign Minister Rafael Ramírez said participants in Tuesday's meeting, which also included senior government officials from Saudi Arabia and Mexico, had "their own vision of the market," but agreed that the current . "Everyone is worried about price," he told reporters. Despite Mr. Sechin's statement, the OPEC meeting is likely to be one of the most momentous in years for the Kremlin because a failure to support oil prices could deal a severe blow to Russia's economy and its currency. The ruble has weakened about one-third against the U.S. dollar this year amid Western sanctions and the oil-price slide. The lower price has cost the country's economy as much as $100 billion this year, Finance Minister Anton Siluanov said Monday. Economic growth is forecast at no more than 0.5% this year. "If OPEC doesn't make a decision to cut production, or it does and it makes no impact, then the ruble could fall further, sending up inflation and unsettling confidence," said Chris Weafer, senior partner at Moscow consultancy Macro Advisory. The fall in the ruble has softened the impact of lower revenues in dollar terms to the federal budget, which relies on oil and gas exports for about half of its income. But a further oil-price slide that sends the ruble lower could risk igniting a currency crisis that Russia has so far avoided, analysts said. Russia's central bank earlier this month abandoned its policy of selling dollars from its reserves to smooth the ruble's fall, after burning through $28 billion in October. But the central bank's willingness to let the ruble float freely could be tested if the ruble resumes its decline, sending Russians to banks and exchange booths to switch into foreign currencies, Mr. Weafer said. "Russia will face a decision: to let the ruble weaken over 50 to the U.S. dollar, or defend the ruble and be downgraded to junk status" by ratings firms, he said. The ruble weakened 1% Tuesday to 46 to the dollar after a few days of strengthening as companies bought up rubles to pay monthly taxes and stabilized. Newspaper reports on Monday suggested Russia, one of the world's top three oil producers alongside Saudi Arabia and the U.S., could cut production in coordination with OPEC , a reminder of pledges in earlier years by Moscow to reduce output that never amounted to anything. But Bloomberg cited Mr. Sechin, a close ally of President Vladimir Putin, as saying that Russia wouldn't need to cut production even if oil fell to $60 a barrel. Mr. Sechin said Rosneft could reschedule some capital-intensive projects, and had already cut production by a tiny amount for efficiency reasons. In an interview broadcast Monday on state television, Russian Energy Minister Alexander Novak said Russia would keep output steady in the next few years. "That's our contribution to stabilize the situation on global oil markets," he said. Analysts said output in Russia may edge down next year anyway due to sanctions and lower profitability, which officials could present as an accommodation to OPEC. Benoît Faucon and Sarah Kent contributed to this article. Write to James Marson at Credit: By James Marson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627762195
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Overheard: Oil's First Cuts Are the Deepest
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Nov 2014: n/a.
Abstract:
In the wake of falling oil prices, you would expect exploration and production companies to be slashing spending budgets but there has been remarkably little evidence of this in third-quarter earnings calls.
Full text: The industry that brought you "Dallas" and "There Will Be Blood" is hardly likely to reward restraint. And that starts with the oil sector's shareholders. In the wake of falling oil prices, you would expect exploration and production companies to be slashing spending budgets but there has been remarkably little evidence of this in third-quarter earnings calls. One reason is that E&P investors seem to prize growth above all else. Raymond James identifies just six companies so far that have cut 2015 capital expenditure plans, by an average of 29%. On average, this has been met with a 3.4% hit to the companies' stocks, leading them to trail the broader sector. The worst-hit have been those companies carrying more debt and so most in need of thrift. More cuts may yet be announced later this quarter if oil remains low. But in the game of chicken between OPEC, meeting later this week to decide on output cuts to rebalance the market, and E&P companies, the stock market seems to be spoiling for a showdown.
Subject: Petroleum industry; Financial performance
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 25, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627774923
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627774923?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Members Inch Toward Oil-Supply Cuts
Author: Faucon, Benoit; Said, Summer; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Nov 2014: C.7.
Abstract:
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday's meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position.
Full text: VIENNA -- OPEC members are inching toward a compromise that could lead them to cut oil supply, as the producer group this week prepares for one of its most closely watched meetings in years. Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, is likely to side with calls for the group to adhere more closely to its self-imposed production ceiling at Thursday's meeting of OPEC oil ministers, according to a Gulf official familiar with the Saudi position. Support for such a move, which would be based on tighter compliance with OPEC's existing output limit as opposed to an outright cut to its production target, was coalescing last week at a meeting of OPEC advisers, according to several of those who were present. With oil prices having recently stabilized at around $80 a barrel following a 30% slide since the summer, some within OPEC have seen less urgent need for the group to take stronger action. But as late as last week, the Saudis' likely approach at Thursday's meeting was unclear to most members. "Saudi Arabia will likely go for a rollover" of the current ceiling, the Gulf official said on Tuesday. A call for strict compliance would be "an option they would go for." But Riyadh's intentions haven't been clearly telegraphed to other members, and it could decide to go a different route Thursday. OPEC members have engaged in an unusually frantic round of shuttle diplomacy ahead of this week's gathering, with some poorer countries calling for deep supply cuts to boost oil prices. Brent crude ended 1.7% lower at $78.33 a barrel on Tuesday after a meeting among Saudi Arabia, Venezuela and non-OPEC members Russia and Mexico resulted in no agreement to cut oil production. The benchmark crude-oil contract on the New York Mercantile Exchange fell 2.2% to $74.09 a barrel. OPEC three years ago agreed to limit its collective output to 30 million barrels of oil a day. But its actual production has regularly spilled over as each member has pushed to maintain its share of global oil markets. Closer compliance would imply a supply cut of around 300,000 barrels of oil a day from October levels, according to OPEC technocrats who met last week. By some distance OPEC's largest oil producer, Saudi Arabia has been unusually reticent in the run-up to this week's meeting. Its oil minister, Ali al-Naimi, refused to answer questions about the country's stance when he arrived in Vienna on Monday. Earlier this month, Mr. al-Naimi told Venezuela's foreign minister, Rafael Ramirez, that the kingdom wouldn't cut its oil output alone, according to people familiar with the matter. But a supply cut of around 300,000 barrels a day is unlikely to satisfy some OPEC members, such as Venezuela and Iran, who need oil prices well above $100 a barrel to balance their government budgets. An OPEC production cut of around 1.5 million barrels would be needed to tighten global oil markets next year, according to oil analysts at Barclays. Current oil prices "aren't acceptable, of course not," Iraq's oil minister Adel Abdul-Mehdi told reporters upon arriving in Vienna. "A means should be used to raise the prices," he said. But officials from Persian Gulf countries are concerned that deep output cuts would prove self-defeating since a rise in oil prices would only encourage further U.S. shale-oil production. OPEC members could then lose market share, one Gulf oil official said. Credit: By Benoit Faucon, Summer Said and Sarah Kent
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.7
Publication year: 2014
Publication date: Nov 26, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Ne wspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627903625
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Moscow Won't Cut Oil Output To Support Price
Author: Marson, James
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Nov 2014: A.12.
Abstract:
Speaking after a meeting with officials from major oil producers Tuesday, Igor Sechin, chief executive of Russian state oil giant OAO Rosneft, said the current oil price "isn't critical for us," adding that Russia couldn't cut oil output immediately, unlike OPEC producers.
Full text: MOSCOW -- Russia's oil czar said the country wouldn't reduce production to support prices, raising the stakes ahead of a crunch summit of the Organization of the Petroleum Exporting Countries on Thursday. Speaking after a meeting with officials from major oil producers Tuesday, Igor Sechin, chief executive of Russian state oil giant OAO Rosneft, said the current oil price "isn't critical for us," adding that Russia couldn't cut oil output immediately, unlike OPEC producers. At Thursday's OPEC summit, officials are to discuss potential responses to a 30% fall in the oil price since the summer. Russia isn't a member of OPEC, but the decline has damaged its economy and pushed its currency lower. Venezuelan Foreign Minister Rafael Ramirez said participants in Tuesday's meeting, which also included senior government officials from Saudi Arabia and Mexico, had "their own vision of the market," but agreed that the current price is too low. "Everyone is worried about price." Despite Mr. Sechin's statement, the OPEC meeting is likely to be one of the most momentous in years for the Kremlin because a failure to support oil prices could deal a severe blow to Russia's economy and its currency. The ruble has weakened about one-third against the U.S. dollar this year amid Western sanctions and the oil-price slide. The lower price has cost the country's economy as much as $100 billion this year, Finance Minister Anton Siluanov said on Monday. Credit: By James Marson
Subject: Petroleum industry; Meetings; Petroleum production
Location: Mexico Saudi Arabia Russia
Company / organization: Name: OAO Rosneft; NAICS: 324110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2014
Publication date: Nov 26, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627903744
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Sag on Saudi Minister's Remarks About Output; Pessimism Grows Over Chances for Big Moves From OPEC to Stop Price Slide
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.
Abstract:
U.S. shale-oil producers need oil prices in the range of $53 to $78 a barrel to break even, depending on their circumstances, meaning most are profitable even with prices at current levels, according to estimates presented at an OPEC technical meeting last week.
Full text: NEW YORK--Oil prices sagged to four-year lows on Wednesday, as Saudi Arabia's oil minister hinted he wouldn't push for a cut in OPEC's production targets. The Organization of the Petroleum Exporting Countries is gathering for its most closely watched meeting in years, and observers are growing pessimistic about the cartel making any big moves to stop the 30% slide in prices since the summer. Saudi Oil Minister Ali al-Naimi said on Wednesday that he expected the market "to stabilize itself eventually," breaking his silence on the state of the market. "I think it's pretty clear coming out of these meetings that there will not be a production cut," said John Kilduff, founding partner of Again Capital in New York, which invests in energy commodities. "The Saudis have prevailed in making it clear that the only people they'd be helping with a production cut is the competition--U.S. shale producers," Mr. Kilduff said. U.S. shale-oil producers need oil prices in the range of $53 to $78 a barrel to break even, depending on their circumstances, meaning most are profitable even with prices at current levels, according to estimates presented at an OPEC technical meeting last week. Light, sweet crude for January on the New York Mercantile Exchange fell 40 cents, or 0.5%, to $73.69 a barrel, its lowest settlement since Sept. 21, 2010. The global Brent contract for January fell 58 cents, or 0.7%, to $77.75 a barrel on the ICE Futures Europe exchange, also a four-year low. The onslaught of oil produced from unconventional drilling in the U.S. and Canada has changed the global market. OPEC, long politically influential and dominant in production, has been losing market share to this new competition. Kuwaiti oil minister Ali Saleh Al-Omair said on Wednesday that OPEC has to live with oil prices as low as $60 a barrel. "We have to live either with $80 or $60 or $100 a barrel," he said. U.S. production surpassed 9 million barrels a day for the first time in decades this month, and it is still growing. The U.S. added another 73,000 barrels of daily production, and stockpiles rose to nearly a five-month high, in the week ended Nov. 21, the U.S. Energy Information Administration said on Wednesday. U.S. crude-oil stockpiles rose by 1.9 million barrels, compared with expectations for a 100,000 decline. The market barely moved on the news, with many traders having grown used to relentless growth in U.S. production, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "It's not really that surprising," Mr. Cooper said. Many market participants were also fully focused on news coming from OPEC ministers. Few wanted to make major moves before the cartel announces its official decision on whether to cut production. Oil prices are likely to swing several dollars a barrel up or down, based on whether OPEC cuts output or maintains current levels, investors said. Mr. Kilduff said he expects prices could fall to $68 a barrel immediately after the meetings, if OPEC doesn't curtail the global glut of oil. In refined product markets, December gasoline futures lost 0.33 cent, or 0.2%, to settle at $2.0351 a gallon on the Nymex. December heating oil gained 0.17 cent, or 0.1%, to settle at $2.3965 a gallon. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Crude oil prices; Petroleum industry; Meetings
Location: United States--US Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 26, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627923160
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Russian Finance Minister Warns Oil Prices Likely to Remain Low; Russia Must Rein in Spending to Offset Revenue Shortfall From Lower Oil Price, Says Anton Siluanov
Author: Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.
Abstract:
[...]falling oil prices have dealt a severe blow to the country's economy and its currency.
Full text: MOSCOW--Lower oil prices are here to stay for the long term and the country's budget should be adjusted accordingly, Russia's finance minister said Wednesday. "The new oil prices, between $80 and $90 a barrel, most probably will stay in the mid to long-term," Anton Siluanov told the upper house of parliament, before it formally approved the country's budget for the next three years. Russian budgetary expenses have been growing faster than inflation for years while oil prices remained high. The country's budget for the next year is still based on an average oil price of $100 per barrel and economic growth of 1.2%. The government now accepts that this outlook may be too optimistic. The finance minister said that if oil prices remain at their current low level and Russia's economy fails to pick up, budget revenue may fall short by a trillion rubles ($21 billion). Mr. Siluanov said nevertheless the government wouldn't default on its social obligations, but would rather try to spend budgetary funds "more effectively". He added that Russia "most probably" won't borrow any funds from global markets, but would rather raise debt domestically. Oil prices have plunged from over $100 a barrel as demand has weakened as a result of slower economic growth in China and Europe, while global supply has increased. Russia is the world's third-largest oil producer and its economy is heavily dependent on oil exports, with the sale of hydrocarbons accounting for about a half of its annual budget revenue. Hence, falling oil prices have dealt a severe blow to the country's economy and its currency. The against the dollar this year amid Western sanctions and the sharp slide in oil prices. The ruble's depreciation should partly offset the fall in oil prices as the budget will receive more rubles for every dollar from exported oil, resulting in higher ruble-denominated budget revenue. Nonetheless, the lower oil price has cost the country's economy as much as $100 billion this year, Mr. Siluanov said. Russia's economy is forecast to grow no more than 0.5% this year. Separately, Russia's energy minister said Wednesday that Russia will produce this year as last year, the Interfax news agency reported. Alexander Novak also said he was skeptical about possible plans to cut oil production by the Organization of the Petroleum Exporting Countries, , in a bid to boost prices. Andrey Ostroukh contributed to this article. Write to Alexander Kolyandr at Credit: By Alexander Kolyandr
Subject: Petroleum industry; Energy economics; Budgets; Crude oil prices; Petroleum production
Location: Russia
People: Novak, Alexander
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 26, 2014
Section: Europe
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627934167
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Seadrill Halts Dividends to Cut Debt; Oslo-Listed Oil Services Company Readies for Consolidation
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.
Abstract:
Mergers have been expected in the oil-services sector following a between Halliburton Co. and Baker Hughes Inc. in the U.S. and by Technip SA for fellow French company CGG SA. Oil prices have a barrel, crimping revenue earned by major oil companies and prompting them to cut back on the projects oil services companies depend on.
Full text: OSLO--Oslo-listed Seadrill Ltd. said Wednesday that it was suspending dividend payments to cut debt and to help finance possible acquisitions amid expectations that oil field services companies will consolidate as they battle fallout from weak oil prices. "The decision to suspend the dividend has been a difficult decision for the board," said Seadrill Chairman John Fredriksen, but he said it was the right way to deal with a "significant deterioration in the broader offshore drilling and financing markets over the past quarter." Seadrill said it aimed "to act as a consolidator as opportunities become available during this downturn." Mergers have been expected in the oil-services sector following a between Halliburton Co. and Baker Hughes Inc. in the U.S. and by Technip SA for fellow French company CGG SA. Oil prices have a barrel, crimping revenue earned by major oil companies and prompting them to cut back on the projects oil services companies depend on. On Wednesday Brent crude for January delivery was up 50 cents at $78.81 a barrel on ICE Futures Europe. "Opportunities to buy distressed assets could probably surface at some point. By cutting dividends, Seadrill is better positioned to capitalize on this," said Sparebank1 Markets analyst Robert Andre Jensen. However, "it's hard to see many attractive distressed assets in the short term. We need to endure a longer period of weakness for this to happen." Seadrill may have the best fleet and contract coverage among the larger oil drillers, but it still has a lot of debt and nearly $6 billion of newbuilds to pay for, Mr. Jensen said. To help secure future financing, Seadrill would have to show banks and creditors commitment, Mr. Jensen said. He forecasts the cyclical downturn in the rig market to continue at least into 2017. By suspending its dividend, Seadrill expects its capital position to improve by $2 billion a year. The board has authorized a share buyback program of up to 10% of outstanding shares over the coming year. "I am confident that Seadrill will emerge from this downturn even stronger and that we will resume our distributions in the future," Mr. Fredriksen said. Seadrill's third-quarter net profit fell to $149 million, or $0.31 a share, from $286 million in the same period last year. It didn't address the possible impact on its business from sanctions against Russia, which may affect $4.1 billion worth of rig contracts between its subsidiary North Atlantic Drilling and Russia's Rosneft. Its earnings report said only that there were "uncertainties" over the timing of drilling, which is set to begin between 2015 and 2017. "Seadrill still reports the $4 billion associated with the Rosneft deal in its backlog, but the lights are starting to go out for a startup of drilling in 2015, as the Russian Arctic region is not a year-round market," said Mr. Jensen. He said Russia will be a potentially tough market for offshore drillers in coming years, "but it's increasingly difficult to see short-term upside from this, given the ongoing sanctions," he said. Seadrill's shares were down 10% by midafternoon Wednesday. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Petroleum industry; Oil service industry
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Technip SA; NAICS: 541330; Name: Bak er Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 26, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1627993494
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1627993494?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distributio n is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Little Comfort for Oil's Ills -- Overheard
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Nov 2014: n/a.
Abstract:
There was little good news in Moody's latest musings on the oil-and-gas sector: tumbling prices, lower demand in developed countries, cuts to investment budgets and a struggle to find sufficiently profitable production growth.
Full text: There was little good news in Moody's latest musings on the oil-and-gas sector: tumbling prices, lower demand in developed countries, cuts to investment budgets and a struggle to find sufficiently profitable production growth. The credit-ratings firm notes, however, that one bright spot has been downstream. Lower crude prices have bolstered refining margins, which benefited companies like Royal Dutch Shell and Total in the third quarter. That is likely to provide only temporary comfort. Better margins could still help ease the pain of oil's fall in the fourth quarter, but European margins look particularly volatile, warns Nomura. And the downstream industry in Europe remains squeezed. U.S. rivals enjoy the cost benefit of cheap natural gas and, for many, cheaper crude. Asia's refiners have demand growth on their doorstep, while competing capacity is growing in the Middle East. Europe is still oversupplied by some 1 million barrels a day in terms of refining capacity, reckons Nomura, while the pace of asset closures and restructuring may have slowed. Today's silver lining could quickly evaporate if it means longer-term problems aren't addressed.
Subject: Petroleum industry; Supply & demand
Location: Asia United States--US Europe Middle East
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 26, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628059792
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628059792?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Shares Mixed Before OPEC; Crude Oil Falls as Saudi Oil Minister Hints He Won't Push for Output Cuts
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.
Abstract: None available.
Full text: China shares pushed to new highs in its sixth straight day of gains Thursday, while the rest of the region finished mixed ahead of a closely-watched meeting of oil producing countries in Vienna. The Shanghai Composite Index was 1.0% higher at 2630.49, after breaking through 2600 yesterday for the first time since August 2011. The market has rallied 7.3% over the last six sessions, with much of those gains coming after last Friday's close when China's central bank surprised investors with an interest-rate cut. Enthusiasm for Chinese stimulus was cooling in Hong Kong, however, where the Hang Seng Index was down 0.5% at 24004.28. Elsewhere, the Nikkei Stock Average was down 0.8% to 17248.50, Australia's S&P/ASX 200 was up 0.1% at 5400.90 and Korea's Kospi was up 0.1% to 1982.09. "The lack of a U.S. market influence will sap much of the energy from Japan stock trading, which itself is lacking incentives now that earnings reporting season is essentially over," said Mutsumi Kagawa, senior global strategist at Tokai Tokyo Research Center. Overnight, stocks on but volumes were low ahead of the Thanksgiving holiday on Thursday. In Japan, volumes were at a tepid 2.06 billion shares. Shares in Japan weakened as the U.S. dollar traded at ¥117.35, down from ¥117.74 late Wednesday in New York. Auto-parts maker Takata Corp. lost 4.8% on its regulatory troubles in the U.S. Japanese officials in charge of automotive-safety recalls said Wednesday that in which in Japan, an indication that auto makers may have to expand vehicle recalls. Crude-oil futures fell 1.0% to $72.96 a barrel, ahead of a meeting of the Organization of the Petroleum Exporting Countries. On Wednesday, Saudi Arabia's oil minister hinted he wouldn't push for . OPEC members have engaged in an unusually frantic round of shuttle diplomacy ahead of this week's gathering, with some poorer countries calling for deep supply cuts to boost oil prices, which have fallen by roughly 26% this year amid weak global demand and a glut of supply. In Shanghai, new energy and environmental companies performed well after China's State Council strengthened the law relating to controlling air pollution. Guangdong Baolihua New Energy Stock Co. added 3% and Beijing SPC Environment Protection Tech Co. added 1.5%. Daniel Inman contributed to this article. Write to Chao Deng at Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 27, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628102464
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628102464?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eurozone Bonds Soar to Record Highs on ECB Policy-Shift Hopes; Prices of Crude Tumble and Oil-related Company Stocks Drop After OPEC Decision
Author: Cox, Josie; Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.
Abstract: None available.
Full text: Eurozone government bonds soared to record highs Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt to step up its efforts to stimulate the region's faltering economy. Germany's 10-year bond yield fell to just above 0.7%, below the previous all-time low of 0.719% hit in October, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows too. Bond prices rise when yields fall. The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more aggressive easing measures to boost below-target inflation. , ECB President Mario Draghi said inflation in the eurozone is "very low" and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate." to Mr. Draghi's remarks. Several German states released their November consumer inflation estimates which--on average--were below economists' forecasts, while figures in Spain and Belgium showed falling prices too. Consumer price data for the eurozone as a whole are due Friday. "The eurozone is facing a deflationary vortex due to a toxic combination of factors, [including] very low growth, under capitalized banks, very weak credit growth and imported deflation," says Philip Lawlor, chief investment strategist at Smith & Williamson. The next ECB governing council news conference will take place on Thursday next week, and BNP Paribas strategists said that "every [data] release ahead of the meeting is likely to be watched even more closely than usual." "Data remains one of the potential triggers for ECB action," they added. The euro slipped 0.2% against the dollar to $1.2481, taking its losses against the buck so far this year to more than 9%. Elsewhere, the price of oil continued to tumble, hitting a fresh four-year low after the Organization of the Petroleum Exporting Countries announced that it to remove some of the supply glut that has been pressuring prices in recent months. Brent crude, which had been lower all day, was down around 6% after the decision was announced, at $73.09 per barrel. That takes losses so far this year to over 32% and since the start of November to almost 13%. Nymex crude has also dropped heavily, falling 5.7% to $69.50. "We have stated for the past couple of weeks that if there was no agreement to cut [either] the production target or the real production, the Brent price will probably fall down into the 60s [dollar per barrel] before Christmas," Torbjørn Kjus, an oil analyst at DNB Bank wrote in a note adding that the meeting was as "bearish" as it possible could have been. "This is also a strong signal that the market will be left to itself," he said. Oil-related stocks took a beating too. Shares in BG Group PLC were down 5%. Royal Dutch Shell PLC and Total SA lost 3.8% and 3.9% respectively. The Stoxx Europe 600 Oil & Gas index lost down 2.6%. London's FTSE 100, one of Europe's indexes with the highest exposure to the oil and gas industry, was flat on the day, underperforming the core European indexes. In currency markets, the Canadian dollar hit a day's low against the U.S. dollar while the Norwegian krone slumped to a day's low against the euro. The ruble, which has additionally been battered by geopolitical tensions and sanctions this year, hit an all-time low versus the euro and is hovering near an all-time low against the dollar too. Write to Josie Cox at and Tommy Stubbington at Credit: By Josie Cox And Tommy Stubbington
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 27, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628173202
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC's Weapon of Mass Inaction; It will likely be years before we see triple-digit oil again
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Nov 2014: n/a.
Abstract:
Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, has a beef with a number of oil-market participants.
Full text: OPEC just declared war on everyone-including itself. The oil cartel's hotly-anticipated meeting on Thursday : No change to an output target that already wasn't being observed. Oil prices, though, went bang: Brent crude fell 4% to close at $73 a barrel after the decision was made. It will likely be years before we see triple-digit oil again. Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, has a beef with a number of oil-market participants. It also appears to have woken up to the fact that OPEC has once again lost its grip on prices. Saudi Arabia's chief antagonist is fellow OPEC member, and main geopolitical rival, Iran. Lower oil prices squeeze Iran's finances and capacity to oppose Riyadh's aims in regional warzones such as Syria. As an added bonus, lower oil prices also hurt non-member Russia, another antagonist. The ruble fell another 2.5% against the dollar today. Beyond geopolitics, Saudi Arabia must simply try to reassert its primacy in the market. For much of the past decade, OPEC seemed to be in the driving seat. In reality, high prices, particularly in recent years, partly reflected OPEC's inability to ensure adequate supply in the face of strong demand from emerging markets such as China. The eventual result is as old as commodity markets themselves: efforts to mitigate demand and a surge in alternative supplies, especially from the U.S. Saudi Arabia must try to preserve the value of its reserves still in the ground: 266 billion barrels on a proven basis alone. Cutting output might juice oil prices in the short term, but would also give U.S. producers an incentive to keep drilling and consumers to keep conserving. What is more, many OPEC members, along with Russia, would free-ride off others' cuts and keep pumping. Even an announcement of a big cut on Thursday might not have helped since OPEC rarely sticks to quotas. Saudi Arabia must instead try to maintain its own credibility. And unlike many other OPEC members, it used the good times to build up its foreign exchange reserves: $745 billion in September, enough to cover more than 30 months of imports, according to Barclays. As Riyadh seeks to counter geopolitical rivals, slow shale development and undermine efforts to conserve demand, it has a formidable war chest to deploy. For once, though, all that money and all that conflict will be weighing on oil prices, not boosting them. Credit: By Liam Denning
Subject: Petroleum industry; Crude oil prices; Geopolitics
Location: Riyadh Saudi Arabia Iran Syria
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 27, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628305188
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Australian Shares Slump After OPEC Decision; Oil Prices Dive, Sending Energy Stocks Sharply Lower
Author: Stewart, Robb M; Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
The 12-member Organization of the Petroleum Exporting Countries, which collectively pump around one-third of the world's oil, agreed on Thursday to stick to a current target of pumping 30 million barrels a day.
Full text: Energy stocks pulled Australia's market sharply lower early Friday after the world's biggest oil-producing nations , sending crude prices into a tailspin. Elsewhere in the Asia-Pacific region, stocks traded mixed. Australia's S&P ASX 200 was down 1.3% to 5333, as crude-oil futures fell 6.8% to $68.68 a barrel. Santos was among the sharpest fallers in the energy sector with a tumble of more than 10%, while larger Woodside Petroleum was down 6%. Elsewhere in the sector, Oil Search shed 7.6% and Origin Energy dropped 6.2%. The 12-member Organization of the Petroleum Exporting Countries, which collectively pump around one-third of the world's oil, agreed on Thursday to stick to a current target of pumping 30 million barrels a day. "It seems there were still plenty of traders holding out hope that the supply of oil from the world's largest group of producers would be cut," said Scott Schuberg, chief executive at Rivkin Securities in Sydney, adding that alongside the fall in iron-ore prices this year it means even fewer reasons for Australia's central bank to consider lifting interest rates. Stocks elsewhere in the region were mixed amid an absence of cues from the U.S., where the market was closed for the Thanksgiving holiday Thursday. Tokyo shares edged higher after the latest economic data showed in October. Industrial production improved again in October, rising 0.2% from a month earlier. The Nikkei Stock Average rose 0.6% to 17350.89. Still, Japan's inflation rate fell below 1% for the first time in a year. The core consumer-price index, which strips out volatile fresh-food prices, was down last month to 0.9%, moving further away from the 2% level targeted by Prime Minister Shinzo Abe and the Bank of Japan. Among other markets, South Korea's Kospi was down 0.3% at 1976.07 and Singapore's Straits Times Index was flat at 3343.2. Write to Robb M. Stewart at and Chao Deng at Credit: By Robb M. Stewart And Chao Deng
Subject: Petroleum industry; Stock exchanges; Consumer Price Index; Price increases
Location: Australia
People: Abe, Shinzo
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Bank of Japan; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628383023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628383023?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eurozone Bonds Soar to Records on ECB Policy-Shift Hopes; Prices of Crude Tumble and Oil-related Company Stocks Drop After OPEC Decision
Author: Cox, Josie; Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: Eurozone government bonds soared to records Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt in a fresh effort to stimulate the region's faltering economy. In equity markets, the Stoxx Europe 600 index rose 0.3% to 347.49, but oil-related stocks took a beating. And in Asia, the Shanghai Composite pushed to a three-year high in a sixth straight session of gains, while the rest of the region ended mixed ahead of the outcome of a meeting of oil-producing countries later in the global day. Germany's 10-year bond yield fell to roughly 0.7%, a new all-time low, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows, too. Yields fall when bond prices rise. The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more-aggressive easing measures to boost below-target inflation. , ECB President Mario Draghi said inflation in the eurozone is very low and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate." to Mr. Draghi's remarks. Several German states released their November consumer-inflation estimates, which, on average, were below economists' forecasts, while figures in Spain and Belgium also showed falling prices. Consumer-price data for the eurozone as a whole are due out Friday. "The eurozone is facing a deflationary vortex due to a toxic combination of factors, [including] very low growth, undercapitalized banks, very weak credit growth and imported deflation," said Philip Lawlor, chief investment strategist at Smith & Williamson. Portfolio managers at Schroders said that in Europe, the next few years would be characterized by lower returns, more volatility and greater risk. "To try and summarize consensus expectations for growth in 2015, we would say that investors are very optimistic about the U.S. and to a lesser extent the U.K., are willing to give Japan and much of Asia the benefit of the doubt for now, and hate Europe full-stop," they wrote in a note to clients. The next ECB governing council news conference will occur on Thursday in the coming week, and BNP Paribas strategists said that "every [data] release ahead of the meeting is likely to be watched even more closely than usual." On Thursday, the euro slipped 0.3% against the U.S. dollar to $1.2467, taking its losses against the greenback so far this year to more than 9%. Currencies from economies that depend heavily on oil slid. The Russian ruble, which has also been battered by geopolitical tensions and sanctions, hit all-time intraday lows against both the euro and the dollar. In stock trading, the Stoxx Europe 600 Oil & Gas index lost 3.95%, while London's FTSE 100--one of Europe's indexes with the highest exposure to the oil and gas industry--sank 0.1%, underperforming the core European indexes. BG Group fell 6% and Royal Dutch Shell lost 4.3% in London trading, and Total slid 4.1% in Paris. Germany's DAX rose 0.6% to 9974.87 and the CAC-40 added 0.2% today to 4382.34. In Asian trading, the Shanghai Composite rose 1% to 2630.49, after breaking through 2600 on Wednesday for the first time since August 2011. The market has rallied 7.3% over the past six sessions, with much of those gains coming after last Friday's close, when China's central bank surprised investors with an interest-rate cut. In Shanghai, new energy and environmental companies performed well after China's State Council strengthened the law relating to controlling air pollution. Guangdong Baolihua New Energy Stock added 3% and Beijing SPC Environment Protection Tech rose 1.5%. In Hong Kong, enthusiasm for Chinese stimulus was cooling, leaving the Hang Seng Index down 0.4% at 24004.28. Japan's Nikkei Stock Average slipped 0.8% to 17248.50, with shares weakening as the U.S. dollar traded at ¥117.35 in Asia, down from ¥117.74 late Wednesday in New York. The dollar was at ¥117.72 late Thursday in New York. In Japanese trading Thursday, auto-parts maker Takata lost 4.8% on its regulatory troubles in the U.S. Japanese officials in charge of automotive-safety recalls said Wednesday they learned of a new case in which an air bag made by Takata exploded in a vehicle in Japan, an indication that auto makers may have to expand vehicle recalls. Australia's S&P/ASX 200 rose 0.1% to 5400.90 and Korea's Kospi was up 0.06% to 1982.09. India's Sensex Index gained 0.2% to 28438.91. Elsewhere, oil took center stage as it tumbled to a more-than-four-year low after the Organization of the Petroleum Exporting Countries said it despite a supply glut having triggered a relentless slide in prices over recent months. Brent crude fell 6.6% to $72.58 a barrel on the ICE Futures Europe exchange, putting losses for the year so far at 34%. Light sweet crude fell $4.64, or 6.3%, to $69.05 a barrel as electronic trading on the New York Mercantile Exchange halted at 1 p.m. EST. "We have stated for the past couple of weeks that if there was no agreement to cut [either] the production target or the real production, the Brent price will probably fall down into the 60s [dollars a barrel] before Christmas," Torbjørn Kjus, an oil analyst at DNB Bank wrote in a note, adding that the meeting was as "bearish" as it possible could have been. "This is a strong signal that the market will be left to itself," he said. Chao Deng contributed to this article. U.S. Stocks at Records U.S. markets were shut Thursday for Thanksgiving. On Wednesday, the Dow and S&P 500 ended at records in a quiet session. The Dow Jones Industrial Average rose 12.81 points, or 0.1%, to 17827.75. The S&P 500 gained 5.8 points, or 0.3%, to 2072.83. Deep-water drilling companies fell the most on the S&P. Diamond Offshore Drilling shares slid 11%; Transocean fell 8.1%. The Nasdaq Composite Index rose 29.07 points, or 0.6%, to 4787.32. U.S. stock and bond markets will close early Friday. Write to Josie Cox at and Tommy Stubbington at Credit: By Josie Cox And Tommy Stubbington
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628383031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628383031?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Tumble to Five-Year Lows; OPEC Keeps Output Goal Unchanged, Suggesting Continuing Glut of Crude
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
Declining import demand from the world's No. 1 oil consumer has had ripple effects through the global oil market, creating a glut in some corners that has pushed down prices.\n
Full text: Oil prices tumbled Friday, plumbing five-year lows, following an OPEC decision that will likely translate into a lingering glut of crude. Brent crude, the global benchmark, fell $2.43, or 3.4%, at $70.15 a barrel on ICE Futures Europe, its lowest settlement since May 2010. Friday's selloff added to losses on Thursday, a regular trading day in Europe, when Brent plunged 6.7% to settle at its lowest level since August 2010. It also dipped below $70 a barrel in intraday trading for the first time since May 2010. U.S. oil futures, which didn't close on Thursday due to the Thanksgiving holiday, fell $7.54, or 10.2%, from Wednesday's close, at $66.15 a barrel on the New York Mercantile Exchange. It was the lowest settlement since September 2009. Both benchmarks are in the middle of their longest month-to-month losing streaks since the financial crisis roiled markets five years ago. November brought 18% losses to both, the largest since the fall of 2008. Traders and analysts said it would take a major geopolitical flare-up or a large disruption to production to shift the trajectory of oil prices, which have plunged more than 30% year-to-date due in part to rising output in the U.S. and Libya. Small gains earlier Friday morning came from profit-taking and weren't a sign of a recovery, they said. At its most widely watched meeting in years, the 12 members of Organization of the Petroleum Exporting Countries at 30 million barrels a day, more than a third of global oil output. The move could cut about 300,000 barrels that OPEC nations have been producing beyond their quota. OPEC rejected calls for more drastic action to curtail supplies. "I don't see anything bullish out there right now that could take it higher," said Todd Gross, chief investment officer at QERI LLC in New York. "There's still more potential for downside risk." Although the move to maintain the production ceiling is painful for the budgets of many OPEC members, some analysts see it as an effort to step up competition from producers in U.S. shale-rock formations. The U.S. shale-oil boom has led to a rapid increase in U.S. crude production, which topped 9 million barrels a day in November for the first time since 1986. It will likely take months for falling prices to result in production declines, which in turn could eventually support prices, analysts say. Sluggish demand, ongoing expansions of some fields and the possibility of more Iranian oil on the market could actually increase stockpiles in the months to come, they say. "I don't have any confidence that we're at the floor," said Tim Evans, analyst at Citi Futures Perspective in New York. The latest leg down in oil prices cascaded through financial markets. and currencies of countries, such as Russia, Canada and Norway, that are big oil exporters. Meanwhile, share prices of large fuel consumers, such as airlines, benefited. "No basin is safe in a $70 (a barrel) market," energy investment bank Tudor, Pickering, Holt & Co. said in a note Friday. At these prices, the Houston firm expects U.S. supply growth would just about stop by 2016, with unconventional drilling fields including the Bakken, Mississippian Lime, Cleveland, Tonkawa, Marmaton, and Tuscaloosa Marine Shale the most likely to lose drilling rigs. As the U.S. has ramped up production, it has cut back on imports. Declining import demand from the world's No. 1 oil consumer has had ripple effects through the global oil market, creating a glut in some corners that has pushed down prices. In a research note, analysts at Morgan Stanley said the market has lost "the OPEC put"--the idea that OPEC would step in to support prices. As a result, oil prices are likely to be even lower in 2015 than widely predicted, the analysts said. If OPEC continues to refrain from using its influence, "we believe oil will enter a new paradigm where prices are subject to the swings of normal commodity cycles with much higher volatility," they wrote. December reformulated gasoline blendstock, or RBOB, settled down 13.12 cents, or 6.5%, to $1.9039 a gallon in two days of trading. December diesel has fallen 16.57 cents, or 6.9%, to $2.2308 a gallon in two days of trading. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US Europe
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628400912
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628400912?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Str eet Journal
Eurozone Bond Yields Fall to Record Lows --- Chinese Stocks Add to Recent Gains; Oil Tumbles to More-Than-Four-Year Trough as OPEC Maintains Output Ceiling
Author: Cox, Josie; Stubbington, Tommy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Nov 2014: C.4.
Abstract:
Eurozone government bonds soared to records Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt in a fresh effort to stimulate the region's faltering economy.
Full text: Eurozone government bonds soared to records Thursday, buoyed by growing expectations that the European Central Bank will buy sovereign debt in a fresh effort to stimulate the region's faltering economy. In equity markets, the Stoxx Europe 600 index rose 0.3% to 347.49, but oil-related stocks took a beating. And in Asia, the Shanghai Composite Thursday pushed to a three-year high in a sixth straight session of gains, while the rest of the region ended mixed ahead of the outcome of a meeting of oil-producing countries later in the global day. Germany's 10-year bond yield fell to roughly 0.7%, a new all-time low, according to Tradeweb. Yields in France, Spain and Italy touched all-time lows, too. Yields fall when bond prices rise. The moves follow a steady stream of comments from ECB officials indicating that the central bank is prepared to opt for more-aggressive easing measures to boost below-target inflation. Speaking at Finland's parliament on Thursday, ECB President Mario Draghi said inflation in the eurozone is very low and "the governing council is unanimous in its commitment to using additional unconventional instruments within its mandate." Data on Thursday added urgency to Mr. Draghi's remarks. Several German states released their November consumer-inflation estimates, which, on average, were below economists' forecasts, while figures in Spain and Belgium also showed falling prices. On Thursday, the euro slipped 0.3% against the U.S. dollar to $1.2467, taking its losses against the greenback so far this year to more than 9%. Oil took center stage as it tumbled to a more-than-four-year low after the Organization of the Petroleum Exporting Countries said it would maintain its production ceiling despite a supply glut having triggered a relentless slide in prices over recent months. Brent crude fell 6.6% to $72.58 a barrel on the ICE Futures Europe exchange, putting losses for the year so far at 34%. Light sweet crude fell $4.64, or 6.3%, to $69.05 a barrel as electronic trading on the New York Mercantile Exchange halted at 1 p.m. EST. Currencies from economies that depend heavily on oil slid. The Russian ruble, which has also been battered by geopolitical tensions and sanctions, hit all-time intraday lows against both the euro and the dollar. In stock trading, the Stoxx Europe 600 Oil & Gas index lost 3.95%, while London's FTSE 100 -- one of Europe's indexes with the highest exposure to the oil and gas industry -- sank 0.1%, underperforming the core European indexes. BG Group fell 6% and Royal Dutch Shell lost 4.3% in London trading, and Total slid 4.1% in Paris. Germany's DAX rose 0.6% to 9974.87 and the CAC-40 added 0.2% today to 4382.34. In Asian trading Thursday, the Shanghai Composite rose 1% to 2630.49, after breaking through 2600 on Wednesday for the first time since August 2011. The market has rallied 7.3% over the past six sessions, with much of those gains coming after last Friday's close, when China's central bank surprised investors with an interest-rate cut. In Hong Kong, enthusiasm for Chinese stimulus was cooling, leaving the Hang Seng Index down 0.4% at 24004.28. Japan's Nikkei Stock Average slipped 0.8% to 17248.50, with shares weakening as the U.S. dollar traded at 117.35 yen in Asia, down from 117.74 yen late Wednesday in New York. The dollar was at 117.72 yen late Thursday in New York. Early Friday, Australia's S&P/ASX was down 1.4%, pulled lower by energy stocks after the OPEC decision. Japan's Nikkei Stock Average was up 0.9% after the government reported an improvement in industrial production. Hong Kong's Hang Seng was off 0.3%. U.S. Stocks at Records U.S. markets were shut Thursday for Thanksgiving. On Wednesday, the Dow and S&P 500 ended at records in a quiet session. The Dow Jones Industrial Average rose 12.81 points, or 0.1%, to 17827.75. The S&P 500 gained 5.8 points, or 0.3%, to 2072.83. Deep-water drilling companies fell the most on the S&P. Diamond Offshore Drilling shares slid 11%; Transocean fell 8.1%. The Nasdaq Composite Index rose 29.07 points, or 0.6%, to 4787.32. U.S. stock and bond markets will close early Friday. Credit: By Josie Cox and Tommy Stubbington
Subject: World markets (wsj)
Location: Germany United States--US Spain Italy Asia France
Classification: 9180: International; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Nov 28, 2014
column: World Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628429263
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628429263?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Plunge As OPEC Stays Put
Author: Faucon, Benoit; Said, Summer; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Nov 2014: A.1.
Abstract:
The 12-member Organization of Petroleum Exporting Countries, who collectively pump more than one-third of the world's oil, agreed at their meeting in Vienna to stick to the group's current target of producing 30 million barrels a day. Since the cartel is currently pumping more than its ceiling, the decision -- backed by a commitment from OPEC members to comply with it -- implies a cut of around 300,000 barrels a day, based on OPEC's own figures.
Full text: VIENNA -- OPEC members rejected calls for drastic action to cut their oil output, keeping their production ceiling unchanged and suggesting the cartel is bracing for lower prices longer term. The decision on Thursday sent crude prices into a tailspin and spilled into currency and European stock markets. If Thursday's market rout proves lasting, it will provide more relief to consumers in gasoline-guzzling countries like the U.S. But it is hammering the finances of big oil producers, from Russia to Venezuela, and biting into profit at oil companies big and small. The 12-member Organization of Petroleum Exporting Countries, who collectively pump more than one-third of the world's oil, agreed at their meeting in Vienna to stick to the group's current target of producing 30 million barrels a day. Since the cartel is currently pumping more than its ceiling, the decision -- backed by a commitment from OPEC members to comply with it -- implies a cut of around 300,000 barrels a day, based on OPEC's own figures. That would put only a relatively small dent in global oil supply even if implemented, and the group has exceeded its ceilings most quarters since late 2011. The decision sent oil prices tumbling, with the West Texas Intermediate benchmark falling below $70 a barrel for the first time in more than four years. Oil for January delivery fell $4.64, or 6.3%, to $69.05 a barrel as electronic trading on the New York Mercantile Exchange halted at 1 p.m. Thursday. The Nymex floor was closed Thursday in observance of Thanksgiving. The global Brent contract for January fell $5.17, or 6.7%, to $72.58 a barrel on the ICE Futures Europe exchange. Currencies of major oil producing countries slid, with the Russian ruble hitting a record low against the euro and nearing an all-time low against the dollar. Share prices of major European oil companies dived, with Royal Dutch Shell PLC down 4.3%, Total SA off 4.1% and BP falling 2.7%. OPEC Secretary-General Abdalla Salem el-Badri said he was sure OPEC members would "abide by" the group's production target. But faced with a gusher of new oil supply -- mainly from the U.S. shale revolution -- and weaker global oil demand, OPEC's muted response caused some to question the five-decade old cartel's relevance. Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer. "OPEC is clearly signaling that it will no longer bear the burden of market adjustment alone and this decision puts the onus on other producers, especially U.S. tight oil, to adjust as well," oil analysts at Barclays said. The absence of stronger OPEC action makes a rebound in oil prices less probable, putting more strain on oil-producing countries which became used to oil prices above $100 a barrel for much of the time since early 2011. Among OPEC's members, only Qatar and Kuwait will be able to balance their budgets next year with prices at their current level. The biggest losers from the current price trend could include Russia, which is already suffering from an economic slowdown and feeling the effects of both lower oil revenues and Western sanctions imposed because of the Ukraine conflict. But the drop in prices has helped consumers in developed countries such as the U.S. heading into the holiday shopping season. Lower prices at the pump and on heating bills give consumers more money for discretionary items such as restaurant meals, electronics and haircuts. The decline in gas prices over the last six months is equivalent to a $75 billion tax cut in the U.S., said economists at Goldman Sachs Wednesday. Falling fuel prices also reduce production and shipping costs for U.S. manufacturers, farmers and businesses. The national average for regular gasoline fell to a four-year low of nearly $2.80 a gallon on Thursday, according to auto club AAA. Gas prices were as high as $3.68 at the end of June. Cheaper oil is a rare piece of good news too for Europe's biggest economic bloc, the euro currency area, since the region is a big oil importer. Lower oil prices, though slightly offset by the euro's weakening against the dollar, should boost the spending power of Europe's consumers, still suffering from high unemployment amid the eurozone's long slump. Many of Asia's emerging economies are also oil importers and thus stand to benefit. Falling oil prices are "a real boon for some countries in Asia, including India, which has a fragile current-account situation," says Eric Chaney, global chief economist at AXA Group in Paris. OPEC's relative inaction, meanwhile, leaves the oil industry, particularly U.S. producers, "in this waiting game, like a game of chicken," said Nasdaq energy analyst Tamar Essner. While some, including ConocoPhillips Co., have already announced plans to spend less in 2015, many won't unveil next year's budget for several weeks. OPEC's production target rollover is a compromise solution designed to meet the conflicting pressures on its members. Though OPEC has been through periods of intense infighting, longtime observers say the group has rarely been as divided as during the weeks running up to Thursday's meeting. While most OPEC countries want to see global oil supply reduced to help boost prices, most members have been unwilling to cut their own production for fear of losing crucial oil-related income and market share. Venezuela, which will need oil prices at $117.50 a barrel to balance its government budget next year according to Deutsche Bank, proposed a sharp output cut, according to people familiar with the meeting. Beforehand its representative Mr. Ramirez told reporters he wanted two million barrels a day of oversupply out of the market. That idea was aggressively opposed by OPEC's Gulf members. --- Nick Timiraos, Nicole Lundeen and Marcus Walker contributed to this article. Credit: By Benoit Faucon, Summer Said and Sarah Kent
Subject: Petroleum production; Gasoline prices; Petroleum industry; Crude oil prices
Location: United States--US Russia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Classification: 9180: International; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Nov 28, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628429474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628429474?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is pr ohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russian Ruble Falls to New Lows as Oil Prices Slide; Bank of Russia Extends Currency Swap Limits to Stabilize Ruble
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
NEW YORK--The Russian ruble weakened to a record low Friday, as it continued to struggle under falling oil prices after OPEC members rejected calls for drastic action to cut their oil output.
Full text: NEW YORK--The Russian ruble weakened to a record low Friday, as it continued to struggle under falling oil prices after OPEC members rejected calls for drastic action to cut their oil output. The ruble touched a fresh low, with 50.03 rubles required to buy one dollar in afternoon trade during the New York session, before recovering slightly to 49.98. This takes the ruble's year-to-date depreciation against the dollar to 34%. Responding to the currency's sharp decline, the Bank of Russia said it would extend limits on currency swaps in an effort to stabilize the ruble. The decision by the Organization of the Petroleum Exporting Countries to keep its production ceiling unchanged sent Brent crude prices below $70 per barrel in intraday trading for the first time since May 2010. The slump in oil prices threatens to further slow Russia's embattled economy as around 50% of the country's annual budget revenue stems from oil and gas exports. Against the euro, the ruble eased to 62.24 before recovering slightly to 62.16. The Bank of Russia against the dollar and euro since early November, having previously intervened on currency markets to stem its loss in value. Russia's central bank had set a daily limit of $2 billion for currency-swap operations, where banks receive rubles from the regulator using dollars and euros as collateral. This tool drew demand only recently after the central bank withdrew a large chunk of rubles from the interbank market as a result of $30 billion intervention in October. By extending the limit for the next two weeks on Friday, the central bank said it hopes to deter speculators from betting on a weaker ruble. The central bank had warned that it might intervene in the markets in future to prop up the ruble, if it deemed it necessary for the sake of Russia's financial stability. Write to Andrey Ostroukh at Credit: By Andrey Ostroukh
Subject: Rubles; Central banks; Petroleum industry; Energy economics; Crude oil prices
Location: Russia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628453090
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628453090?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC Decision Roils Markets; Oil-Linked Stocks and Currencies Hammered
Author: Cox, Josie; Albanese, Chiara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
Biggest losers on the pan-European all-share index included BG Group PLC, Petrofac Ltd., Royal Dutch Shell PLC and BP PLC. London's FTSE 100 index, which has a high exposure to the energy sector, fell 0.3% while Germany's DAX was down 0.1% and France's CAC declined 0.2%.\n
Full text: The hammered commodity-dependent currencies as well as shares in oil and gas companies Friday, a day after the Organization of the Petroleum Exporting Countries , diminishing hope of any imminent respite for the ailing commodity. Brent crude was an additional 0.6% lower at $72.17 a barrel, its weakest level in four years, having nearly 7% on Thursday. "It's really a chaotic situation and anyone's guess how far oil might still go," said James Sutton, global natural resources equity strategist at J.P. Morgan Asset Management, which looks after around $1.7 trillion worth of assets. The sell-off in oil-related stocks continued in the U.S., where markets reopened Friday after the Thanksgiving holiday there. Oil majors like Exxon Mobil Corp. and drillers such as Transocean Ltd. were feeling the pressure. "In recent weeks we have reduced our exposure to energy and increased our cash holdings and certainly won't be comfortable deploying that cash again before we see some kind of equilibrium returning to the market," Mr. Sutton said. Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer, but its members didn't bow to market pressure. which this year has also been pummeled by geopolitical tensions and resulting sanctions, hit yet another all-time low against the dollar, while fellow oil-linked currencies such as the Canadian dollar, Norway's krone and Nigeria's naira slipped too. One dollar now buys more close to 50 rubles. It started the year around 32. "OPEC yesterday delivered just about the most unfriendly possible response to ruble and oil prices," Tom Levinson, a strategist at Sberbank said. He added that it was unclear whether Russia's central bank would intervene to curb the currency's slide. "[That will] be dictated by the bank's judgment of whether "financial stability" is at risk. It is hard to argue that it is not, but the hurdle to ad hoc intervention has proven high to date," Mr. Levinson said. Barclays economists said they now expect Brent crude to sink below $70 a barrel and the West Texas Intermediate benchmark to fall even further. "Over the course of the coming months, oil markets will have to find a new equilibrium--a world where demand elasticities are tested, and non-OPEC supply sensitivities, and particularly the pain threshold for U.S. producers becomes better understood," they wrote in a note. Turkey, a major oil importer, is a bright spot. Aberdeen Asset Management said it is now taking a more favorable view of the country by buying the Turkish lira. "There can be a shift from oil-exporter countries, we are already witnessing it in Latin America's weaker growth performance. But on a macro scale, lower energy prices should help global growth, and this should have an overall positive impact on emerging markets," said Viktor Szabo, a portfolio manager at the firm, which manages around £322.5 billion ($402 billion) in assets. Istanbul's main stock exchange rose around 1.8% on Friday. "Given that Turkey imports more than 90% of its energy needs, low oil prices will have positive implications," said emerging market strategist Piotr Matys at Rabobank. Shares in major airlines, including easyJet PLC, International Consolidated Airlines--owner of British Airways--and TUI Travel PLC climbed, buoyed by the prospect of cheaper fuel. The Stoxx Europe 600 index of travel and leisure stocks rose 1.4%. "A fall in oil prices means a fall in petrol prices, a fall in transport costs, and should be treated as a tax cut for consumers," Peter Dragicevich, a strategist at Commonwealth Bank of Australia wrote in a note. Retail stocks and chemical companies are also widely seen as potential beneficiaries. But more broadly, oil and gas companies on the Stoxx Europe 600 index declined by almost 3.5% to a more than one-month low, fiercely underperforming all other sector indexes. The broader Stoxx 600 fell 0.1%. The biggest losers on the pan-European all-share index included BG Group PLC, Petrofac Ltd., Royal Dutch Shell PLC and BP PLC. Write to Josie Cox at and Chiara Albanese at Credit: By Josie Cox and Chiara Albanese
Subject: Petroleum industry; Stock exchanges; Energy economics; American dollar; International trade; Elasticity of demand; Crude oil prices; Energy industry; Natural gas utilities
Location: Russia
Company / organization: Name: Sberbank; NAICS: 522110; Name: easyJet Airline Co Ltd; NAICS: 481111; Name: Aberdeen Asset Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628478944
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628478944?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dozens Killed in Sudan Clashes; Security Scare Hits Oil-Producing Region
Author: Bariyo, Nicholas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
Mr. Bashir is facing an arrest warrant issued by the International Criminal Court over accusations of war crimes and genocide committed by his troops and allied militias.
Full text: Dozens of people have been killed in clashes between rival tribes in Sudan's West Kordofan state, officials said Friday, in the latest security scare to hit the country's restive oil-producing region. Conflicts over grazing land pitted two rival groups of the Arab Misseriya tribe against each other, leaving at least 140 people dead and more than 100 others injured after several days of clashes, Rabie Abdelaty, spokesman for Sudan's information ministry, told The Wall Street Journal. Several Arab tribes acquired arms from the Khartoum regime several years ago to help in the quelling of an insurrection by non-Arab tribes in the neighboring region of Darfur. But tribal groups are increasingly turning the guns against each other, posing a renewed security challenge for President Omar al-Bashir's beleaguered government. "The military has sent a response team to the region" Mr. Abdelaty said. "The casualties are overwhelming" Gun-wielding tribal militias have conducted tit-for-tat raids against each in recent months, threatening to unsettle the stability of the area, which accounts for the bulk of Sudan's 130,000 barrels a day of crude oil production. The nomadic Misseriya often move with large herds along Sudan's common border with the newly independent South Sudan and have in recent years raided non-Arab tribes in the disputed region of Abyei, stirring tensions between Juba and Khartoum. Sudan lost around 75% of its oil fields following the breakaway of South Sudan in 2011 and now relies on oil fields in Western and Northern Kordofan states for the bulk of its crude. For nearly two decades, the Sudanese military has been battling multiple rebellions in its southern regions. Earlier this week, Sudan closed down the human rights office of the joint United Nations-African Union peacekeeping mission in Darfur after accusations that its troops had conducted mass rapes in the region. Mr. Bashir is facing an arrest warrant issued by the International Criminal Court over accusations of war crimes and genocide committed by his troops and allied militias. Khartoum denies the accusations. Write to Nicholas Bariyo at Credit: By Nicholas Bariyo
Subject: Oil fields; Militia groups; Petroleum production
Location: Sudan Darfur Sudan South Sudan
People: Bashir, Omar Hassan Ahmed
Company / organization: Name: United Nations--UN; NAICS: 928120; Name: African Union; NAICS: 813940; Name: International Criminal Court; NAICS: 922110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628509151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509151?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Malaysia's Petronas to Review Spending as Oil Prices Slide; State-Run Petronas May Also Trim Dividend Payments to Malaysian Government
Author: Ng, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
KUALA LUMPUR--Malaysia's national oil-and-gas company Petroliam Nasional Bhd., or Petronas, said Friday it is reviewing its spending plans for next year after reporting a 14% decline in third-quarter net profit on falling crude prices, even as it increased output.
Full text: KUALA LUMPUR--Malaysia's national oil-and-gas company Petroliam Nasional Bhd., or Petronas, said Friday it is reviewing its spending plans for next year after reporting a 14% decline in third-quarter net profit on falling crude prices, even as it increased output. Petronas, the Southeast Asian country's sole Fortune 500 company and most profitable enterprise, may cut spending between 15% and 20% of its capital expenditure next year, Chief Executive Shamsul Azhar Abbas told reporters at an earnings briefing. The company typically spends 60 billion ringgit to 80 billion ringgit ($17.9 billion to $23.9 billion) each year in expanding its operations. Petronas may also trim dividend payments to the government next year if prices continue to fall. "We need to channel income" into capital expenditure, Mr. Shamsul said. Malaysia's government depends heavily on Petronas as a source of revenue, with the company contributing around $10 billion each year to the national budget. The company's net profit for the three months ended Sept. 30 was 12.41 billion ringgit, down from 14.47 billion ringgit during the same quarter last year. Revenue fell 1.3% from a year earlier at 80.37 billion ringgit from 81.41 billion ringgit. Its crude output rose 6.5% to 822,000 barrels a day. Petronas said in a statement that fourth-quarter operational earnings "will likely be considerably lower" than in the third quarter. Oil prices have fallen more than one-third since June due to oversupply and weak global demand. Brent--the global benchmark for crude--recently fell below $72 a barrel for the first time since mid-2010. Malaysia relies heavily on the oil and gas sector for government revenue, filling up 31% of its coffers last year. Still, the company says it hopes to press ahead with its Canadian liquefied-natural-gas project, which could cost as much as 11 billion Canadian dollars (US$10 billion). Mr. Shamsul said Petronas expects to make its final decision on the proposed Canadian investment by the end of the year, as previously scheduled, after securing regulatory approval, financing and project partners. The project includes an export terminal at an undeveloped island in northern British Columbia. It could begin operating as soon as 2018, and is projected to export up to 12 million metric tons of LNG a year, mostly to Asian markets. Write to Jason Ng at Credit: By Jason Ng
Subject: Petroleum industry; Corporate profits; Natural gas; Regulatory approval
Location: Malaysia
Company / organization: Name: Petronas; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628509156
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509156?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC Decision Eases Pain for Japanese Airlines and Importers as Oil Prices Drop; Japan's Nikkei Stock Average Rose 1.2% on Friday
Author: Fujikawa, Megumi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: TOKYO--The decision by the world's leading oil producers to caused oil prices to drop and gave a boost to Japanese airlines, as well as a much-needed break to companies in Japan that rely on materials brought in from overseas. Japan Airlines and ANA Holdings, the parent of All Nippon Airways Co., both rallied on the Tokyo Stock Exchange as oil prices fell on Friday, with hopes that the cost of jet fuel, which makes up about 30% of their operating expenses, will head lower. JAL's shares rose 5.3% to ¥3,490 ($29.65) at Friday's close, while ANA gained 7.4% to ¥292.2. The Nikkei Stock Average rose 1.2% to 17459.85. "Though it may hurt some sectors, lower oil prices are positive for the overall market," said Yusuke Sakai, a senior trader at T&D Asset Management. He added that declines in fuel costs will help spur industrial production and consumer spending, supporting the Japanese and U.S. economies. A falling oil price also helps smaller companies in Japan that have been struggling as the weakening yen has made imported materials more expensive. A survey by the Japan Chamber of Commerce and Industry released Friday said about 39% of Japanese companies expected their profit to decline in the fiscal year through March if the yen stayed at current levels of around ¥116-¥118. "A weaker yen hurts small and midsize companies through increases in purchasing cost, but effects of cheap oil prices could offset the negative impact from the yen's fall," said Hajime Takata, chief economist at Mizuho Research Institute. In contrast, Japanese multinationals as it pushes up the value of their overseas profit when converted into yen. Lower oil prices may allow smaller companies to increase wages, a move that would contribute to a virtuous cycle in the economy where better-paid workers spend more and help companies boost revenue and profit, Mr. Takata added. The 12-member Organization of the Petroleum Exporting Countries, which collectively pumps around one-third of the world's oil, agreed Thursday to stick to a current target of 30 million barrels a day, sending the West Texas Intermediate benchmark below $70 a barrel for the first time in more than four years. As oil prices fell, individual investors in the Tokyo market picked up shares in airlines, while long-term institutional investors unloaded oil refiners and distributors that will be hurt by lower crude prices, said Mr. Sakai of T&D Asset Management. Japan's main refinery operator, TonenGeneral Sekiyu K.K., fell 1.5% Friday to ¥993. Some analysts say crude prices could in the near term. "Oil prices could easily bounce back, given that the global economy is likely to be near its bottom, rather than slowing down further," said Takahiro Sekido, a strategist at the Bank of Tokyo-Mitsubishi UFJ. But if oil prices drop and provide downward pressure on overall prices, it could fuel expectations for further monetary easing by the Bank of Japan, he added. Write to Megumi Fujikawa at Credit: By Megumi Fujikawa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628509234
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628509234?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
IEA Chief Economist Urges Oil Producers to Invest in New Projects; International Energy Agency Anticipates Rise in Demand in Coming Years
Author: Pérez, Anna; Román, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: MADRID--The International Energy Agency's chief economist on Friday urged oil producers to boost investment in new projects to meet an anticipated rise in demand, a move that he said may avoid oil price spikes in coming years. Speaking in Madrid during the presentation of the IEA's annual report, Fatih Birol said that a tumble in oil prices makes it hard to believe a supply crunch may happen any time soon, but the slow pace of development of new projects makes it imperative to act. "We shouldn't just ignore tomorrow's challenges," Mr. Birol said. "This is hard point to make in this context of lower oil prices, but we need to invest now." A continued oil slide as well as shares in oil and gas companies Friday, a day after the Organization of the Petroleum Exporting Countries , diminishing hope of any imminent respite for the ailing commodity. In early trade, Brent crude fell to its weakest level in four years, having already plummeted nearly 7% on Thursday. . Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer, but its members didn't bow to the market pressure. In its report, IEA estimates that oil demand will hit 104 million barrels a day in 2040, from 90 million barrels last year, with Asian countries accounting for two-thirds of overall demand. Such a production increase would imply $900 billion worth of investment a year through the 2030s in oil exploration and production, IEA says. The organization singled out four key focus areas for future production: the U.S., Canada, Brazil and the Middle East. Mr. Birol said that oil prices are probably close to rebound, and should be sustained by demand. Earlier this month, Mr. Birol , offshore and unconventional oil projects are facing major challenges with international oil prices around or below $80 a barrel, and warned that oil companies may revise spending downward, potentially hurting future supply. Write to Anna Perez at and David Román at Credit: By Anna Pérez and David Román
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628521216
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628521216?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Makes Eurozone Inflation a Slippery Prospect; Falling Oil Prices Pose Yet Another Challenge For The European Central Bank
Author: Barley, Richard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
[...]the outlook for eurozone growth given a 27% fall in Brent crude in euro terms so far this year has also brightened, especially when coupled with signs of improving business and consumer confidence, and easing constraints on credit.
Full text: So much for the hoped-for bounce in Falling energy prices--even without taking account of --have put paid to that. Eurozone inflation in November was just 0.3% and looks almost certain to go lower in the near future. That of course will raise expectations that the European Central Bank will go further in extending its asset-purchase program. This week Vice President Vitor Constancio said the ECB could consider government-bond purchases in the first quarter of next year. But away from energy prices, inflation has been broadly stable over the last six months, at least in comparison with its sharper declines in 2012 and 2013. Core inflation--excluding energy, food, alcohol and tobacco--at 0.7% in November was just below its six-month average of 0.8%. The same is true of services prices, up 1.1% versus a six-month average of 1.2%, and industrial goods, flat versus up 0.1%. The ECB still has to worry both about headline inflation and expectations. The risk from lower oil prices is that headline inflation could fall to zero or below in the near term. But the outlook for eurozone growth given a 27% fall in Brent crude in euro terms so far this year has also brightened, especially when coupled with signs of improving business and consumer confidence, and easing constraints on credit. Expectations too seem to be being shaped by oil prices. The five-year/five-year euro inflation swap, a measure of longer-term expectations watched by the ECB, has declined in line with the fall in oil, RBS notes. That raises the question of what would happen if oil prices were to recover--even by a relatively small amount. If inflation expectations are being mainly driven by oil--which could be true for consumers as well as markets, given that frequently-bought items such as fuel tend to have a bigger impact on perceived inflation--then a rebound could yet change the picture rapidly for the eurozone. Higher oil prices may be a way off yet, however. That leaves the ECB grappling with the disinflationary impact of oil set against its stimulative effect on growth. Oil could send the ECB skidding toward the government-bond purchases it has so clearly sought to avoid. Write to Richard Barley at Corrections & Amplifications An earlier version of this article failed to state that the 27% fall in Brent crude referred to prices denominated in euros. Credit: By Richard Barley
Subject: Petroleum industry; Inflation; Eurozone
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628538258
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538258?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil and Water; Monet and Manet learned from each other during a summer spent painting along the Seine.
Author: Lopez, Jonathan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: Irritated that newspapers were mistaking him for the younger artist, French painter Edouard Manet (1832-83)--reigning star of the Parisian avant-garde during the 1860s and 1870s--initially had little use for his near-homonymic doppelgänger Claude Monet (1840-1926). But after meeting the man and finding him a talent of genuine originality, Manet warmed up. As the distinguished German art historian Willibald Sauerländer recounts in "Manet Paints Monet"--a compact volume of sparkling insight and charm--the two artists and their families spent the summer of 1874 together in the riverside town of Argenteuil, just north of Paris, and there embarked on a storied adventure of artistic discovery. Manet and Monet were equally modern in style, but they went about the business of modernism by disparate methods. Both painters emphatically rejected the classical subject matter favored by the French Royal Academy of Painting and Sculpture--whose annual exhibition, the Salon, was the leading venue for contemporary painting and sculpture at that time. Manet brought a novelistic awareness of interpersonal disquietude to his scenes of contemporary life--as in, for instance, his scandalous "Olympia" (1863), which recasts the conventional mythological nude as an unashamedly naked courtesan. Monet, by contrast, was primarily a painter of natural phenomena, a keen formalist innovator who recorded his impressions of perceived reality in dazzling compositions of seemingly dematerialized color. At Argenteuil, Monet painted scenes dominated by the play of light on water, working outdoors in a rowboat outfitted with a covered cabin at one end for shelter and a broad canopy for shade. Fascinated by the curious spectacle of this floating atelier, the lifelong city-dweller Manet proceeded to paint a portrait of Monet toiling at his craft in the blazing sun: The straw-hatted landscape painter sits, legs outstretched, before his easel at the boat's prow, while his wife, Camille, quizzically assesses his efforts from the relative comfort of the cabin. "To be able to give an adequate representation of Monet in his atelier boat," Mr. Sauerländer tells us, "Manet paints like Monet." The more established artist not only adopts the younger man's methods by painting outside, or en plein air, but gamely tries out the short, sketchy brushstrokes and vibrant chromatic harmonies for which Monet and his Impressionist colleagues were becoming famous. Camille's facial expression is evoked with just a few calligraphic traces of paint, and the vivid contrast of the bright blue water and pale pink canopy sets off the white highlights of the sitters' linen garments to brilliant effect. This was not just a fleeting experiment for Manet but a veritable Damascene conversion. During the course of the summer, he produced a string of minor masterpieces in which he grafted Monet's Impressionist technique to his own sociological preoccupation with la vie moderne. In "Argenteuil" (1874), for instance, Manet portrays a vacationing Parisian businessman and a young woman of lower social class chatting beside pleasure boats on the sunny docks in a scene subtly suggestive of dalliance. Here we witness, as Mr. Sauerländer puts it, "the transformation of the Impressionist representation of landscape and water into an Impressionist depiction of contemporary society." Manet continued to work out the consequences of this epiphany for the remainder of his career, returning to his customary urban subject matter with a newfound understanding of pure bright color in such iconic works as "A Bar at the Folies-Bergère" (1882). Mr. Sauerländer's book covers terrain similar to T.J. Clark's "The Painting of Modern Life" (1984) but is blissfully free of Mr. Clark's convoluted writing style and overbearing Marxism. Mr. Clark remains a giant in this field, but Mr. Sauerländer is the more companionable author, and his work is highly recommended. Mr. Lopez is editor at large of Art & Antiques. Credit: By Jonathan Lopez
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628538295
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538295?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Statoil Backed to Run Johan Sverdrup Field; Norway's State Oil Company Recommended by Partners
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
OSLO--Norway's Statoil ASA said on Friday that it had been recommended by its partners to operate the giant Johan Sverdrup oil field in the North Sea, one of Norway's biggest-ever finds, estimated to hold up to 2.9 billion barrels of crude.
Full text: OSLO--Norway's Statoil ASA said on Friday that it had been recommended by its partners to operate the giant Johan Sverdrup oil field in the North Sea, one of Norway's biggest-ever finds, estimated to hold up to 2.9 billion barrels of crude. The Norwegian oil producer has previously said that at its peak. Norway's total crude output last year was 1.46 million barrels a day, more than halved from a peak in 2000. The field development is estimated to cost up to 220 billion Norwegian kroner ($31.56 billion), but the full life-cycle price tag, including operating costs through 2068, is 450 billion kroner. Statoil expected life-cycle revenues of 1.35 trillion kroner. The field is set to start producing late 2019. The plans on how to operate and develop the field will be submitted to the Norwegian authorities in February next year, Statoil said. The field will be developed with four platforms, and more installations could be added in the next phases of development, Statoil said. The company's goal is to recover at least 70% of the field's oil resources. The production organization will be established in Stavanger on Norway's west coast, where Statoil's headquarters is situated. A recent drop in oil prices to a four-year low around $72 per barrel is seen to jeopardize some oil projects in Norway, particularly in the Arctic, where infrastructure is scarce and development costs higher. However, analysts expected the Johan Sverdrup field to be profitable with oil prices at about $40 per barrel, which is well below the nearby Gina Krog field, which requires $77 a barrel to be profitable according to the Norwegian government. Partners in the Johan Sverdrup field include Lundin Petroleum AB, Det norske oljeselskap ASA, Petoro AS and Maersk Oil, the oil arm of Denmark's AP Moeller-Maersk A/S. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Oil fields; Petroleum industry; Energy economics
Location: Norway North Sea
Company / organization: Name: A P Moller-Maersk Group; NAICS: 551112; Name: Maersk Oil; NAICS: 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: Lundin Petroleum AB; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628538301
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628538301?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Sinks to Near a Two-Week Low; Weaker Oil and a Stronger Dollar Sapping Investor Demand
Author: Shumsky, Tatyana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures.
Full text: Gold fell, as weaker oil prices and a firmer dollar pressured investors' appetites for protection from inflation. Gold for December delivery, the front-month contract, fell $21.40, or 1.8%, to settle at $1,175.20 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the lowest settlement level since Nov. 13. For the week, the precious metal dropped 1.9%. Gold declined as U.S. investors had their first chance to react to Thursday's drop in crude-oil prices. The Organization of the Petroleum Exporting Countries on Thursday said that it would leave output quotas unchanged. The decision comes as plentiful global supplies of the fuel have pushed crude prices down by more than 35% since June. Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures. Gold is a popular hedge against inflation, as some investors believe it will hold its value better than other assets if consumer prices rocket higher. However, with oil prices in retreat, a major contributor to production costs is shrinking, a shift that is likely to keep inflation tame for months to come. "Manufacturing costs are sure to go down because of low crude prices; trucking, transportation and utility costs will go down, too," Mr. Gero said. The dollar, which advanced against most other currencies, also kept gold prices under pressure. Gold is traded in dollars and becomes more expensive for buyers in other countries when the dollar strengthens against their home currencies. Gold's slide found little respite from news that India removed one of the restrictions on gold imports put in place in 2013. The Reserve Bank of India ended the requirement that companies bringing gold into the country re-export 20% of the precious metal as jewelry. The restriction contributed to weakening India's demand for gold. Last year, India for the first time yielded the world's top-gold-consumer title to China. Traders now shift their sights to Switzerland, where voters will decide Sunday on a referendum that calls for the Swiss National Bank to hold 20% of its reserves in gold, up from 8%. Recent polls suggest the measure is unlikely to pass. "If the vote is no, as expected, then gold would likely fall back toward the early-November lows," said Leon Westgate, analyst with Standard Bank, in a note to clients. Write to Tatyana Shumsky at Credit: By Tatyana Shumsky
Subject: Gold markets; International finance
Location: India United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Swiss National Bank; NAICS: 521110; Name: Reserve Bank of India; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628542811
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC's Twist of Faith for Oil Investors; Fallout From Oil's Rout Extends Beyond Producers
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
Conventional wisdom in the exploration-and-production sector held that oil prices were supported by Chinese demand and supply being moderated by the Organization of the Petroleum Exporting Countries.
Full text: In the wake of OPEC's decision not to cut output targets, the oil industry frets about too much supply. Its real problem: an excess of certainty. Conventional wisdom in the exploration-and-production sector held that oil prices were supported by Chinese demand and supply being moderated by the Organization of the Petroleum Exporting Countries. The added spice was the U.S. shale boom, which sucked in capital on the premise of surging output. Energy economist Phil Verleger draws a parallel with the Internet bubble. In this case, the disruptive technology wasn't the Web but fracking. Now, with the benchmark U.S. oil price falling below $70 a barrel, and investors' certainties tanking with it, the money plowed into the E&P revival is at risk. Stocks are the most obvious victims, and the SPDR S&P Oil & Gas Exploration and Production exchange-traded fund duly slumped 13% on Friday. But the fallout will be further-reaching and more complex than that, creating losers but also some potential winners. Losers first. While stocks have been hit hard, don't forget debt, in which obligations tend to remain obstinately fixed regardless of underlying commodity prices. From 2009 to 2013, the U.S. E&P sector outspent cash flow by $272 billion, according to IHS Herold. High-yield debt for the energy sector has risen threefold since 2008, to $210 billion, according to Brian Gibbons at CreditSights. Energy is the biggest sector of the high-yield market. At $70 oil, E&P sector cash flow falls by a fifth, says Tudor, Pickering, Holt, and that includes the benefit of hedging. Woe to those lacking it: Continental Resources' recent decision to unwind its hedges looks especially badly timed. Its stock fell 20% Friday. Beyond E&P firms, master limited partnerships operating pipelines and other infrastructure have been investor darlings. That isn't simply due to energy exposure, but also because their high payouts stand out in a low-yield world. The biggest 15 pipeline MLPs have seen their aggregate market capitalization swell by $153 billion, or 80%, in the past two years alone, according to SNL Energy. In addition, the sector's high-yield debt has more than doubled since 2010, to $57 billion, according to CreditSights. Now, not only are energy prices uncertain, so, too, is the outlook for U.S. interest rates. Now the winners. While they won't be unscathed, the big oil companies should see some benefit from the reset in oil prices and expectations. Their priority is gaining access to big reserves, and the E&P sector's pain should make acquisitions easier. Exxon Mobil's stock took a hit Friday. Yet, at 13.4 times forward earnings, its multiple has stayed pretty constant this year. The E&P sector, meanwhile, has seen its premium to Exxon collapse from 65% in late June to 26% now, and it will likely erode further. The one certainty left today is that, when the excess washes out, someone will scoop up the perfectly good assets that are left behind. Write to Liam Denning at Credit: By Liam Denning
Subject: High yield investments; Petroleum industry; Cash flow; Prices; Energy industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628554758
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628554758?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Companies Hit by OPEC Decision; Share Prices of Energy Producers Tumble on Day After Cartel's Move to Maintain Output
Author: Ailworth, Erin; Gold, Russell
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
[...]stock prices of U.S. oil producers tumbled.
Full text: The outlook for U.S. energy companies has dimmed, following a decision by the Organization of the Petroleum Exporting Countries to keep pumping lots of crude oil, despite a global glut. Though was widely expected, it helped push U.S. oil prices down on Friday to under $70 a barrel, the lowest level in about four years. Consequently, stock prices of U.S. oil producers tumbled. Shares of Continental Resources Co., the biggest producer in the Bakken Shale area in North Dakota, plunged nearly 20% on a shortened post-Thanksgiving trading day in New York. The company said earlier this month that it had liquidated nearly all of its oil-price hedges, betting that crude would rebound to $85 a barrel soon. The Oklahoma City-based company didn't respond to a request for comment. Shares of other big U.S. producers affected included Chesapeake Energy Corp., down 12%, while Apache Corp. and Pioneer Natural Resources Co. were off around 11%. Devon Energy Corp. and EOG Resources Inc. dropped nearly 8% in price. The companies didn't respond to requests for comment or declined to comment. Global energy companies that also own refineries were less affected, with shares of Exxon Mobil Corp. falling about 4%, to 90.63. "Hard hats on for this normally mailed-in day in the stock market," energy analysts at Tudor, Pickering, Holt & Co. said in a client note on Friday. U.S. energy companies have drilled tens of thousands of wells since 2008, creating million-barrel-a-day oil fields in North Dakota and South Texas. For the past six years, the companies have drilled aggressively, a luxury provided by triple-digit oil prices. Lower oil prices mean that not all new wells will be worth the effort. Companies could postpone investment in a relatively underexplored and high-cost oil-producing tracts, such as the Tuscaloosa Marine Shale in Mississippi and Louisiana. U.S. oil companies say they plan to ride out the low prices by shifting spending to their best acreage, where wells produce more oil and are economic even in the current price environment, such as the Eagle Ford Shale in Texas. Such a strategy could allow them to cut their spending, but keep oil production at current levels. Moody's Investors Service said this week that it expects U.S. oil output to grow about 10% in 2015, despite what it predicts will be a 20% drop in capital spending. Write to Erin Ailworth at and Russell Gold at Credit: By Erin Ailworth And Russell Gold
Subject: Petroleum industry; Energy industry; Prices; Capital expenditures; Petroleum production
Location: Oklahoma United States--US New York North Dakota
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Devon Energy Corp; NAICS: 211111; Name: Apache Corp; NAICS: 324110, 211111, 213112; Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628558288
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mexico's Peso Feels Heat from Falling Oil Prices; Peso Falls to Weakest Level Against U.S. Dollar in More Than Two Years on Decline in World Oil Prices
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's peso fell Friday to its weakest level against the U.S. dollar in more than two years as the continuing decline in world oil prices pressured commodity-dependent currencies. As the most traded of the emerging-market currencies, the peso is often used by investors to hedge emerging market exposure and sold off in times of global financial turmoil. Already under pressure along with other emerging market currencies on prospects of higher U.S. interest rates, the Mexican currency lost further ground after the Organization of the Petroleum Exporting Countries decided against cutting crude oil output to address falling prices. The Mexican currency weakened as far as 13.96 to the dollar during Friday's session before settling back to 13.9080, its weakest close since mid-2012. The drop in oil prices, and the lack of liquidity because of the U.S. Thanksgiving holiday, were pressuring the exchange rate, local currency traders said. The eighth most-traded currency in the world, according to the Bank for International Settlements, is down 5.9% from its 2013 close. Finance Minister Luis Videgaray said Friday that the peso's decline against the dollar so far this year has been smaller than that of the Brazilian real or the Peruvian sol. The peso's movements act as a natural shock-absorber against events such as a drop in the oil price, he added. "When we had a fixed exchange rate, a couple of decades ago, these movements would cause an immediate outflow of capital, and particularly a loss of foreign reserves. That doesn't happen today," Mr. Videgaray said in a radio interview Friday. The minister said Mexico's export crude price on Thursday was between $65 and $66 per barrel. But lower oil prices affect Mexico's fiscal accounts, since oil and related taxes account for around a third of federal government revenue. The government, which has budgeted for $79 a barrel in 2015, has hedged around 60% of next year's planned crude exports at $76.40 a barrel, and has money in a stabilization fund to cover further shortfalls with which it should be able to avoid budget cuts. Oil dollars don't directly support the Mexican currency, as state oil company Petróleos Mexicanos changes its dollars at the central bank and not in the open exchange market. Over the longer term, however, oil helps the peso by bolstering the country's foreign reserves, which are currently at record levels of around $193 billion. Local bank Banorte noted a recent increase in the correlation between the peso and oil prices from zero a month ago. The shift suggests oil prices could affect Mexico on two fronts: public finances and foreign direct investment resulting from the implementation of an ambitious overhaul in the energy sector to attract foreign capital, Banorte said in a report. Foreign direct investment has slowed this year--just $15.3 billion in the first nine months--in part due to investors awaiting implementation of recent economic overhauls such as in energy, according to Bank of America Merrill Lynch. The recent flare-up in security issues, including protests following the disappearance and suspected murders of 43 teacher-college students after they were detained by police in late September in the southern state of Guerrero, is also likely weighing on investment and consumption, the bank said. "We expect unrest could continue ahead of the [midterm] elections in 2015, though we do not expect escalation to a full-blown crisis. If this is the case, FDI should also increase ahead," the bank said. Write to Anthony Harrup at Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628566323
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628566323?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Linked Currencies Extend Losses; OPEC Decision Triggers Sharp Decline in Oil Prices
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: The currencies of oil-producing countries such as Canada and Norway continued to weaken against the dollar for a second straight session Friday, as oil prices tumbled in the wake of OPEC's decision to leave its oil production ceiling unchanged. The U.S. dollar rose 0.9% versus the Canadian dollar, to a three-week high of C$1.1435. The dollar rocketed 1.5% versus the Norwegian krone, to 7.0336 krone, the highest level since March 2009. Fallout from the decision of the Organization of the Petroleum Exporting Countries to of 30 million barrels a day . Brent crude fell $2.43, or 3.4%, at $70.15 a barrel on ICE Futures Europe, its lowest settlement since May 2010. Friday's selloff added to losses Thursday, a regular trading day in Europe. U.S. oil futures fell $7.54, or 10.2%, from Wednesday's close, at $66.15 a barrel on the New York Mercantile Exchange. It was the lowest settlement since September 2009. Falling oil prices continued to pressure energy stocks, as well as the Canadian dollar, the Norwegian krone and the Russian ruble, which tumbled to its weakest level against the dollar during the European session before rebounding. "The oil-related currencies catch everyone's eyes, given the OPEC decision [Thursday]," said Charles St-Arnaud, economist and currencies strategist at Nomura Securities. "A lot of negativity is being priced into those currencies." In Canada, the OPEC decision also trumped positive numbers for third-quarter growth, which came in better-than-expected on Friday and signaled a broadening of the country's export base. The price move, on a day marked by lighter holiday trade in the Americas session, remained consistent with investor behavior over the past several months. The greenback has gained against developed-market currencies since the summer, driven by a strengthening economy and the promise of higher interest rates in the U.S., which is attracting yield-hungry investors. The Federal Reserve, which ended its large-scale asset purchase program last month, is considering when to raise interest rates, as central banks in Japan and the eurozone are easing policy to stimulate growth and ward off deflation. Higher U.S. rates make the dollar more attractive, as they boost returns on assets denominated in the currency. The dollar on Friday rose 0.8% versus the yen, to ¥118.67, closing in on its strongest level against the Japanese currency since August 2007. The euro slid 0.2% to $1.2446, inching down toward its lowest level since August 2012. The market will shift its attention next week to a policy meeting of the European Central Bank on Thursday, followed by the U.S. jobs report for November one day later. Write to James Ramage at Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628570959
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Energy Quakes as OPEC Stands Pat; Oil Stocks Tumble, 2015 Budgets in Spotlight as Crude Prices Fall
Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: OPEC's decision to stand pat on oil production despite a global glut is hurting prospects for U.S. energy companies and slamming countries whose budgets rely on high oil prices. Though the Organization of the Petroleum Exporting Countries' decision was widely expected, 10% to $66.15 a barrel on Friday, the lowest level since September 2009, and sent shares in energy producers tumbling. Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota's Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98. Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.4% and Royal Dutch Shell PLC lost 7.3%, all in abbreviated New York trading on Friday. Currencies of oil producing nations, including Russia, Nigeria and Canada, all weakened. Russia's finance ministry said government spending would be revised or cut. Benchmark Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when Brent plunged 6.7%. Pascal Menges, a portfolio manager with Lombard Odier in Switzerland who has shares in U.S. shale oil producers, said OPEC's decision "created a very uncomfortable situation" for oil companies that must decide whether to curb investments. He predicts the global oil oversupply will decline over the winter and U.S. production growth will slow, preventing prices from falling much more. If that is the case, he said, the least-indebted North American shale companies should stay profitable. Still, he said, he has cut his fund's investments in oil producers, moving some of the money to companies that buy and process oil. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some operations in the U.S., as well as globally. Still, he expects prices to eventually stabilize. "We are confident the market will find an equilibrium," he said. Canadian oil-sands producers also are under pressure. The break-even price for oil-sands surface mines is among the most expensive in the world, at around $85 a barrel, according to Bank of Nova Scotia. Operating costs at existing mines are less than half that amount. But the break-even point for so-called in situ projects, in which bitumen is heated and pumped up to the surface, range between $40 a barrel and $80 a barrel. Such projects represent the majority of future growth. "We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment...you'll to see a real muting, or reduction, or deferment of future oil sands projects," Mr. Edwards said. The immediate problem is rejiggering budgets originally built for the assumption of higher prices. For instance, BP Chief Executive Bob Dudley said last month that the company assumed oil prices of $80 a barrel when deciding whether to invest in its current projects. A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two." Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 per barrel over the next few years "a moderately optimistic scenario." The high oil price in recent years helped drive up costs for big players like BP and Shell. These giant companies now face the prospect of lower cash flow to fund those higher costs now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, Shell Chief Financial Officer Simon Henry said last month. A Shell spokesman said Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel. "A new project must be able to break even at $70 oil" to win approval for investment, he said. Before Friday's decision, some smaller companies were considering giving up amid months of sagging prices. Often dependent on fickle capital markets to fund expensive exploration efforts, many have struggled to woo fresh investors amid today's lower prices. At a recent board meeting, directors of U.K.-based Fastnet Oil and Gas PLC, an investor in an unsuccessful well in Morocco earlier this year, discussed whether to stay in the oil industry. "We have $25 million, what should we be doing?" Fastnet Chairman Cathal Friel said. He said the board has considered returning the money to shareholders, or diversifying far from the oil patch, including a foray the "medical technology" business. Other industries may get a boost from lower prices. Mining giant Anglo American PLC benefits from about $42 million in extra annual earnings for each $10 drop in the oil price over the course of a year, a spokesman said. And many airlines-if they haven't locked in fixed prices for future fuel deliveries-could also come out ahead. Jet fuel typically accounts for 30% or more of a carrier's costs. The International Air Transport Association, which represents more than 200 carriers, estimates the airline industry will spend $7 billion less on fuel this year than in 2013 now that jet fuel prices are around 20% below the year-ago level. Still, many carriers have tried to protect against volatility by locking in fuel prices early. That now leaves some paying more than market rates. Ryanair Holdings PLC, Europe's largest discount airline, hedged about 90% of its anticipated full-year fuel consumption. The airline this month said it would take advantage of slump in oil to lock-in lower prices into 2017. Henrik Meincke, chief economist at VCI, the association of Germany's chemical industry, said lower prices, if they're sustained, "will make raw materials less expensive for German chemicals companies." The price of naphtha, a key raw material, is about 30% lower in November than in June, he said. Some of that gain, though, will vanish amid likely price competition, he said. The cause of this turmoil was OPEC's decision on Thursday not to cut output. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments to fellow ministers at the oil cartel's meeting. He conceded falling prices will be painful, according to these people, but losing long-term customers to U.S. shale producers would be worse. Mr. Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. Indeed, so-called break-even prices for shale production--the price at which wells remain economic--varies widely and can be relatively low. But Mr. Naimi warned that if OPEC cuts, non-OPEC crude likely will replace it. Attempts to reach the media office of the Saudi oil ministry weren't successful. "Saudi Arabia is trying out a new gambit," wrote analysts at consultancy IHS Energy. "The Kingdom is testing the resilience of other producers to lower prices in trying to deal with rising North American oil production." The lower prices have sent fund managers scurrying to reallocate assets. Paris-based asset management firm Carmignac Gestion has pulled out of some investments in energy companies and started selling futures contracts linked to indexes of oil and gas producers to protect itself from price declines, said Sandra Crowl, a member of the firm's investment committee. Asset managers also were picking winners and losers among oil-producing governments. Aberdeen Asset Management has pulled investment out of oil-producing Nigeria and added to its positions in Turkey, a big oil importer, said portfolio manager Viktor Szabo. "This is a massive positive for Turkey," said Timothy Ash, a currency strategist at Standard Bank. He says each $10 drop in the price of a barrel of oil saves Turkey about $4 billion annually on energy imports. Benoît Faucon, Said Summer, Sarah Kent and Robert Wall contributed to this article. Write to Justin Scheck at , Sarah Kent at and Summer Said at Credit: By Justin Scheck, Erin Ailworth and Chester Dawson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628570983
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628570983?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Crystal Ball: What's Ahead for Exxon Mobil Shares? Our Weekly Stock-Prediction Feature Looks at the Energy Giant
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract: None available.
Full text: Send your prediction to crystalball@wsj.com by midnight EST Sunday, with your full name, city, state and phone number. The first reader who gets it right will be named in next Saturday's paper. Energy stocks plunged after the Organization of the Petroleum Exporting Countries on Thursday rejected calls to lower its oil output. Exxon Mobil shares fell 4.2% on Friday. What will the company's closing share price be on Monday? Congratulations to Martin Lowe of Jacksonville, Fla., who came closest to guessing Tiffany's closing price of $107.60 this past Tuesday.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Personal Finance
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628571192
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628571192?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The New Oil Order; OPEC feels the squeeze from the U.S. shale boom.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Nov 2014: n/a.
Abstract:
A lower oil price will mean pain for some U.S. producers, and it is showing up in lower share prices for energy companies.
Full text: America's unconventional oil boom continues to yield major benefits--economic and geostrategic. The latest evidence is OPEC's decision on Thursday to defy expectations and maintain its current oil production target despite the steepest price decline since the 2008-2009 recession. The price of Brent crude, the global oil benchmark, plunged as a result to about $70 a barrel, continuing its decline from a peak of nearly $116 in June. Not too many years ago the Organization of Petroleum Exporting Countries might have cut production to maintain higher prices. The cartel's countries have long sought to keep prices high at a level consistent with a growing global economy, not least to keep the revenue flowing into government coffers. Rogue states such as Venezuela and Iran desperately need the cash flow. But the cartel has lost much of its pricing power thanks in part to the revival in U.S. oil production. Horizontal drilling and hydraulic fracturing--business innovations done mainly on private land--have pushed U.S. oil output to its highest level since the 1980s. The Energy Information Administration says U.S. production reached more than nine million barrels a day this year and is expected to keep climbing. OPEC is afraid that demand for its crude will keep falling as U.S. supply continues to grow and more of it makes its way to the global market as American export barriers fall. One way to read the OPEC decision is therefore as a price war to shake marginal U.S. producers from the market. The U.S. shale boom and high global oil prices have encouraged new areas of production with widely varying break-even price levels. Much of such proven areas as the Bakken Shale in North Dakota can remain profitable even at $50 a barrel, by most estimates. The Eagle Ford Shale in Texas also has a relatively low break-even. But newer areas with higher exploration and development costs could suffer if prices keep falling. That's how markets are supposed to work, with supply and demand rather than a cartel of dictatorships setting prices. A lower oil price will mean pain for some U.S. producers, and it is showing up in lower share prices for energy companies. But no boom lasts forever, and lower prices will discipline American drillers to focus their investments on the most promising areas and innovate further to reduce costs. A shake-out might have long-term benefits if it doesn't go too far. Meanwhile, lower oil prices are an unmitigated boon to American consumers. The average gasoline price per gallon in the U.S. fell to $2.79 on Friday, down 50 cents from a year ago. That's a big difference to the average family filling up the SUV each week, especially wage earners who haven't had an increase in their standard of living during this entire economic expansion. Consumers who feel less pinched might open their checkbooks for non-energy purchases. Lower prices will also add to the economic pressure on some of the world's worst dictators, notably Vladimir Putin. Russia doesn't belong to OPEC but it has benefited to the extent that the cartel's production controls have kept prices high. Already under pressure from EU and U.S. sanctions, Mr. Putin's ability to buy domestic political support will decline along with oil prices. All of these benefits are flowing from a U.S. oil boom that government didn't predict and had almost nothing to do with. The political class has force-fed subsidies to renewable energy with little economic benefit. The new oil order is a reminder that markets and American ingenuity are better economic pillars than all the schemes of government planners.
Subject: Petroleum industry; Supply & demand; Recessions; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 28, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628574379
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628574379?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Energy Quakes as OPEC Stands Pat; Oil Stocks and the Currencies of Major Oil-Producing Nations Tumble
Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2014: n/a.
Abstract: None available.
Full text: Energy company stocks and the currencies of major oil-producing nations stumbled Friday as OPEC's decision to maintain crude output levels despite a glut rippled across the globe. The Organization of the Petroleum Exporting Countries' decision knocked down U.S. benchmark oil prices on Friday by 10% to $66.15 a barrel, the lowest level since September 2009. Uneasy investors dumped energy stocks. Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota's Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98. Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading. Currencies of most major oil producing nations, including Russia, Nigeria and Canada, weakened. The Russian ruble tumbled almost 3% to an all-time low of 50.57 to the dollar, before recovering slightly. The Mexican peso slid to its weakest level versus the greenback in more than two years. Russia said it would revise or cut government spending. Pascal Menges, a portfolio manager with Lombard Odier in Switzerland who has shares in U.S. shale oil producers, said OPEC's decision "created a very uncomfortable situation" for oil companies that must decide whether to curb investments. He predicts the global oil oversupply will decline over the winter and U.S. production growth will slow, preventing prices from falling much more. If that is the case, he said, the least-indebted North American shale companies should stay profitable. Still, he said, he has cut his fund's investments in oil producers, moving some of the money to companies that buy and process oil. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some U.S. and global operations. Still, he expects prices to eventually stabilize. "We are confident the market will find an equilibrium," he said. Canadian oil-sands producers also are facing pressure. The break-even price for new oil-sands surface mines is among the most expensive in the world, at around $85 a barrel, according to Bank of Nova Scotia. Operating costs at existing mines are less than half that amount. But the break-even point for so-called in situ projects, in which bitumen is heated and pumped up to the surface, range between $40 a barrel and $80 a barrel. Such projects represent the majority of future growth. "We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment...you'll see a real muting, or reduction, or deferment of future oil sands projects," he said. Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when the oil industry's global benchmark fell 6.7%. The immediate problem is rejiggering budgets built in a time of higher prices. For instance, BP Chief Executive Bob Dudley said last month that the company assumed Brent oil prices of $80 a barrel when deciding whether to invest in its current projects. A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two." Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 a barrel over the next few years "a moderately optimistic scenario." High oil prices in recent years came with rising costs for big companies including BP and Shell. These giants now face the prospect of lower cash flow to fund expenses now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, said Shell finance chief Simon Henry in October. A Shell spokesman said on Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel. "A new project must be able to break even at $70 oil" to win approval for investment, he said. Before Thursday's decision, some smaller companies were already reeling. U.K.-based Fastnet Oil & Gas PLC, which had a well come up dry in Morocco earlier this year, recently discussed returning the company's remaining $25 million to shareholders or leaving the oil business to get into medical technology, said Chairman Cathal Friel. Other industries may get a boost. Mining giant Anglo American PLC benefits from about $42 million in extra annual earnings for each $10 drop in the oil price over the course of a year, a spokesman said. And many airlines--if they haven't locked in fixed prices for future fuel deliveries--could also come out ahead. Jet fuel typically accounts for 30% or more of an airline's costs. The International Air Transport Association, which represents more than 200 carriers, estimates the airline industry will spend $7 billion less on fuel this year than in 2013 now that jet fuel prices are around 20% below the year-ago level. Still, many carriers have tried to protect against volatility by locking in fuel prices early. That now leaves some paying more than market rates. Ryanair Holdings PLC, Europe's largest discount airline, hedged about 90% of its anticipated full-year fuel consumption. The airline this month said it would take advantage of slump in oil to lock-in lower prices into 2017. Henrik Meincke, chief economist at VCI, an association of German chemical manufacturers, said lower prices, if they're sustained, "will make raw materials less expensive for German chemicals companies." The price of naphtha, a refined oil that is a key raw material, is about 30% lower now than in June, he said. Some of that gain, though, will vanish amid likely price competition, he said. The cause of this turmoil was OPEC's decision on Thursday not to cut output targets. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments to fellow ministers at the oil cartel's meeting. He conceded falling prices will be painful, according to these people, but losing long-term customers to U.S. shale producers would be worse. Mr. al-Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. Indeed, so-called break-even prices for shale production--the price at which wells remain economic--vary widely and can be relatively low. But Mr. al-Naimi warned that if OPEC cuts output, non-OPEC crude likely will replace it. Attempts to reach the media office of the Saudi oil ministry weren't successful. "Saudi Arabia is trying out a new gambit," wrote analysts at consultancy IHS Energy. "The Kingdom is testing the resilience of other producers to lower prices in trying to deal with rising North American oil production." The lower prices have sent fund managers scurrying to reallocate assets. Paris-based asset management firm Carmignac Gestion has pulled out of some investments in energy companies and started selling futures contracts linked to indexes of oil and gas producers to protect itself from price declines, said Sandra Crowl, a member of the firm's investment committee. Asset managers also were picking winners and losers among oil-producing governments. Aberdeen Asset Management has pulled investment out of oil-producing Nigeria and added to its positions in Turkey, a big oil importer, said portfolio manager Viktor Szabo. "This is a massive positive for Turkey," said Timothy Ash, a currency strategist at Standard Bank. He says each $10 drop in the price of a barrel of oil saves Turkey about $4 billion annually on energy imports. Benoît Faucon, Summer Said, Sarah Kent and Robert Wall contributed to this article. Write to Justin Scheck at , Sarah Kent at and Summer Said at Credit: By Justin Scheck, Erin Ailworth and Chester Dawson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 29, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628575707
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628575707?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Venezuela's Maduro Plans To Slash Spending as Oil Price Drops; President Aims to Cut Salaries, Create Committee to Find Savings in Bid to Shore Up Finances
Author: Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Nov 2014: n/a.
Abstract: None available.
Full text: CARACAS--Venezuelan President Nicolás Maduro announced plans on Friday to cut public spending, beginning with his own salary, as the price of oil continues its slump. The slide in crude prices of more than 30% since the summer has added a new layer of concern for Mr. Maduro, whose popularity, polls show, has dropped to a record low. The South American country is struggling with soaring inflation as well as a dollar crunch that has led to shortages of food and consumer goods. Venezuela's basket of heavy crude and petroleum products tumbled 89 cents to end the week at $68.08 a barrel, the lowest in more than four years, the oil ministry reported. "I don't take this blow from the drop in oil prices badly," Mr. Maduro said in a televised address to industry workers at the Miraflores presidential palace. "I take it as an opportunity to end superfluous, luxury, unnecessary spending." The president said he would create a committee to formulate a proposal for a "substantial reduction" in spending, beginning by revising pay for heads of government ministries and state-run companies, a move he said would set an example. Mr. Maduro didn't offer specific figures for how much he was looking to reduce spending. But he received a standing ovation after asking workers for their support in the effort. It isn't hard to find bloat in the government's budget, Mr. Maduro said. "The purchase of who knows how many cars and trucks...I ask: Is this really necessary?" There will be no cuts in the social programs that have kept the ruling socialist party popular among Venezuela's poor, Mr. Maduro promised workers. He also reiterated that his finance minister, Rodolfo Marco, will soon head to China to seek more financing from the country, which has pumped nearly $50 billion in loans into Venezuela since 2007. Turning to allies like Russia and China for aid may be part of a series of "disorganized and unpredictable" actions that Venezuela is likely to take as it scrambles to raise funds, analysts at GlobalSource Partners said in a report Friday. The government may also look to further reduce imports to ration scarce dollars, the analysts said. Friday's announcement follows a series of tax increases on luxury goods authorized by Mr. Maduro, a move widely characterized by analysts as unlikely to do much to help shore up state finances. Prices of Venezuela's bonds, which are the highest-yielding in the developing world because of the perceived risk, continued to drop Friday on concerns that the country's economic woes and oil's decline could lead to a default. Venezuelan officials, however, insist that they have the resources to honor their obligations. On Thursday, Venezuela failed to convince fellow members of the Organization of the Petroleum Exporting Countries to take measures to prop up oil prices at the group's summit in Vienna. But Mr. Maduro said his government will continue pushing for $100 a barrel, which they say is fair price for the commodity that makes up 96% of their hard-currency income. --Write to Kejal Vyas at kejal.vyas@wsj.com Credit: By Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 29, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628583157
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628583157?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Companies, Nations Reel On Price Drop --- U.S. Benchmark Tumbles 10% in Wake Of OPEC Move; Stocks, Currencies Fall
Author: Scheck, Justin; Ailworth, Erin; Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: A.1.
Abstract:
Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some U.S. and global operations.
Full text: Energy company stocks and the currencies of major oil-producing nations stumbled Friday as OPEC's decision to maintain crude output despite a glut rippled across the globe. The Organization of the Petroleum Exporting Countries' decision knocked down U.S. benchmark oil prices on Friday by 10% to $66.15 a barrel, the lowest level since September 2009. Uneasy investors dumped energy stocks. Among the hardest hit were U.S. domestic oil producers including Continental Resources Co., the biggest producer in North Dakota's Bakken Shale. Its shares plunged on Friday nearly 20%, to $40.98. Exxon Mobil Corp. fell 4.2%, BP PLC dropped 5.5% and Royal Dutch Shell PLC lost 7%, all in abbreviated New York trading. Currencies of most major oil producing nations including Russia, Nigeria and Canada weakened. The Russian ruble tumbled almost 3% to an all-time low of 50.57 to the dollar, before recovering slightly. The Mexican peso slid to its weakest level versus the greenback in more than two years. Russia said it would revise or cut government spending. Pascal Menges, a portfolio manager with Lombard Odier in Switzerland who has shares in U.S. shale oil producers, said OPEC's decision "created a very uncomfortable situation" for oil companies that must decide whether to curb investments. He predicts the global oil oversupply will decline over the winter and U.S. production growth will slow, preventing prices from falling much more. If that is the case, he said, the least-indebted North American shale companies should stay profitable. Still, he has cut his fund's investments in oil producers, moving some of the cash to firms that buy and process oil. Todd Staples, president of the Texas Oil & Gas Association, a trade group, said in a statement that low crude oil prices will impact some U.S. and global operations. Still, he expects prices to eventually stabilize. "We are confident the market will find an equilibrium," he said. Canadian oil-sands producers also are facing pressure. The break-even price for new oil-sands surface mines is among the most expensive in the world, at around $85 a barrel, according to Bank of Nova Scotia. "We're going to be more challenged by a high price environment than many other jurisdictions," said Murray Edwards, chairman of Canadian Natural Resources Ltd., one of Canada's largest oil sands producers. "In the current price environment . . . you'll see a real muting, or reduction, or deferment of future oil sands projects," he said. Brent crude for January deliveries traded down $2.43 a barrel at $70.15 a barrel on Friday. That added to losses on Thursday, when the oil industry's global benchmark fell 6.7%. The immediate problem is rejiggering budgets built in a time of higher prices. For instance, BP Chief Executive Bob Dudley said last month that the company assumed Brent oil prices of $80 a barrel when deciding whether to invest in its current projects. A BP spokesman said the company continues to plan projects assuming a price of around $80 a barrel for "long-term investments which typically have lifespans of a decade or two." Russia also planned its 2015 budget assuming an average oil price of $100 a barrel. On Friday, its finance ministry said the government would revise or cut spending, calling an average of $80 a barrel over the next few years "a moderately optimistic scenario." High oil prices in recent years came with rising costs for companies including BP and Shell. These giants now face the prospect of lower cash flow to fund expenses now locked into projects that will take years to complete. High costs from "the last two or three years are already baked into the contracts" for new projects, Shell finance chief Simon Henry said in October. A Shell spokesman said on Friday the company's "price screening range" for new projects is between $70 a barrel and $110 a barrel. Before Thursday's decision, some smaller companies were already reeling. U.K.-based Fastnet Oil & Gas PLC, which had a well come up dry in Morocco earlier this year, recently discussed returning the company's remaining $25 million to shareholders or leaving the oil business to get into medical technology, said Chairman Cathal Friel. Other industries may get a boost. Mining giant Anglo American PLC benefits from about $42 million in extra annual earnings for each $10 drop in the oil price over the course of a year, a spokesman said. Jet fuel typically accounts for 30% or more of an airline's costs. The International Air Transport Association estimates the industry will spend $7 billion less on fuel this year than in 2013. Still, carriers that sought to protect against volatility by locking in fuel prices early may end up paying more than market rates. Ryanair Holdings PLC hedged about 90% of its anticipated full-year fuel use. Henrik Meincke, chief economist at VCI, an association of German chemical manufacturers, said lower prices, if they're sustained, "will make raw materials less expensive for German chemicals companies." The price of naphtha, a refined oil that is a key raw material, is about 30% lower now than in June, he said. The cause of this turmoil was OPEC's decision on Thursday to hold output targets. Influential Saudi Arabian Oil Minister Ali al-Naimi argued against cutting production, a move some OPEC members had advocated to support prices, according to people briefed on his comments. Mr. al-Naimi wasn't advocating forcing down prices to run U.S. shale producers out of business, these people said. But he warned if OPEC cuts output, non-OPEC crude likely will replace it. Attempts to reach the Saudi oil ministry weren't successful. Asset managers were picking winners and losers among oil-producing nations. Aberdeen Asset Management has pulled investment out of Nigeria and added to its positions in Turkey. "This is a massive positive for Turkey," said Timothy Ash, a currency strategist at Standard Bank. He says each $10 drop in the price of a barrel of oil saves Turkey about $4 billion annually on energy imports. --- Benoit Faucon, Summer Said, Sarah Kent and Robert Wall contributed to this article.
Credit: By Justin Scheck, Erin Ailworth and Chester Dawson
Subject: Crude oil prices; Petroleum industry; Petroleum production
Location: United States--US Nigeria Russia Canada
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Bank of Nova Scotia; NAICS: 522110; Name: Texas Oil & Gas Association; NAICS: 813910
Classification: 5310: Production planning & control; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Nov 29, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628599122
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628599122?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Oil Boss's Pay Is Challenged in U.K.
Author: Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: B.4.
Abstract:
In 2013, Peter Vosser, the CEO of Anglo-Dutch oil major Royal Dutch Shell PLC, received pay valued at $11.5 million including shares and bonuses, while Rex Tillerson, the head of Texas-based Exxon Mobil Corp., received $28.1 million, according to company reports.
Full text: Corrections & Amplifications The surname of Peter Voser, former CEO of Royal Dutch Shell PLC, was incorrectly spelled as Vosser in a Corporate News article Saturday about the executive-pay controversy at U.K. energy company BG Group PLC. Also, though the article was describing Mr. Voser's 2013 pay, it didn't make clear that he is no longer with Royal Dutch Shell. (WSJ Dec. 2, 2014) LONDON -- One of the biggest executive-pay revolts in the U.K. in recent years gathered speed as a major shareholder-advisory group recommended that BG Group PLC investors reject a share award for the oil and gas company's incoming chief executive. European energy CEOs have long made less than their counterparts in the U.S., but the pay package of Helge Lund, who takes BG's helm in March, is stoking investor concern that compensation in the European industry is getting out of hand. New U.K. legislation giving shareholders more information and influence over pay packages has led to greater scrutiny of executive pay levels in all sectors. At issue is Mr. Lund's performance-linked award of as much as GBP 12 million ($18.8 million) in stock over five years, which is subject to a shareholder vote at a special meeting Dec. 15 because it falls outside a remunerations policy approved by BG holders in May. That award comes on top of Mr. Lund's salary and other bonuses and share awards that could total as much as $22 million a year, up from the $2.1 million he received at much-bigger rival Statoil ASA of Norway. British investor-advisory group Pensions & Investment Research Consultants, or PIRC, said told clients on Thursday that the additional share award hasn't been adequately justified and that Mr. Lund already stands to receive compensation well beyond levels granted to European peers in the sector. "Such an excessive award could be seen as a golden hello award as it grossly exceeds the maximum limits set in the existing policy," said PIRC, recommending that its clients, who hold assets under management worth around $2.36 trillion, oppose the award. Mr. Lund's proposed remuneration is competitive in the international oil and gas industry, a BG spokesman said. In 2013, Peter Vosser, the CEO of Anglo-Dutch oil major Royal Dutch Shell PLC, received pay valued at $11.5 million including shares and bonuses, while Rex Tillerson, the head of Texas-based Exxon Mobil Corp., received $28.1 million, according to company reports. While many shareholders approve of the appointment of Mr. Lund, a 52-year-old Norwegian who is credited with transforming Statoil during his decadelong tenure, many object that the additional share award breaches the pay policy they approved in May. They also feel under pressure as BG has been without a CEO since April and the company has warned that Mr. Lund is "not obliged" to take the job if the award isn't approved. PIRC isn't the only adviser criticizing Mr. Lund's package. In a rare move this past week, the Institute of Directors, the U.K.'s main business lobby group, criticized the pay deal, calling it "excessive, inflammatory and contrary to the principles of good corporate governance." "We've had word from several investors who are concerned -- we haven't heard from any who are happy," said IOD Director General Simon Walker. Even U.K. Business Secretary Vince Cable urged shareholders to reject the package, saying they should use the power they had been given to vote down excessive pay deals. Credit: By Selina Williams
Subject: Petroleum industry; Chief executive officers; Shareholder voting; Investments; Executive compensation
Location: United States--US
People: Tillerson, Rex W Voser, Peter Lund, Helge
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 221210
Classification: 2120: Chief executive officers; 6400: Employee benefits & compensation; 8510: Petroleum industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Nov 29, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628599131
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628599131?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibi ted without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Slips and Falls On Oil's Crude Patch
Author: Shumsky, Tatyana
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Nov 2014: B.5.
Abstract:
Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures.
Full text: Gold fell, as weaker oil prices and a firmer dollar pressured investors' appetites for protection from inflation. Gold for December delivery, the front-month contract, fell $21.40, or 1.8%, to settle at $1,175.20 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the lowest settlement level since Nov. 13. For the week, the precious metal dropped 1.9%. Gold declined as U.S. investors had their first chance to react to Thursday's drop in crude-oil prices. The Organization of the Petroleum Exporting Countries on Thursday said that it would leave output quotas unchanged. The decision comes as plentiful global supplies of the fuel have pushed crude prices down by more than 35% since June. Tumbling energy costs are turning up the heat on investor demand for gold, said George Gero, a senior vice president with RBC Capital Markets Global Futures. Gold is a popular hedge against inflation, as some investors believe it will hold its value better than other assets if consumer prices rocket higher. However, with oil prices in retreat, a major contributor to production costs is shrinking, a shift that is likely to keep inflation tame for months to come. "Manufacturing costs are sure to go down because of low crude prices; trucking, transportation and utility costs will go down, too," Mr. Gero said. The dollar, which advanced against most other currencies, also kept gold prices under pressure. Gold is traded in dollars and becomes more expensive for buyers in other countries when the dollar strengthens against their home currencies. Gold's slide found little respite from news that India removed one of the restrictions on gold imports put in place in 2013. The Reserve Bank of India ended the requirement that companies bringing gold into the country re-export 20% of the precious metal as jewelry. The restriction contributed to weakening India's demand for gold. Last year, India for the first time yielded the world's top-gold-consumer title to China. Traders now shift their sights to Switzerland, where voters will decide Sunday on a referendum that calls for the Swiss National Bank to hold 20% of its reserves in gold, up from 8%. Recent polls suggest the measure is unlikely to pass. "If the vote is no, as expected, then gold would likely fall back toward the early-November lows," said Leon Westgate, analyst with Standard Bank, in a note to clients. Credit: By Tatyana Shumsky
Subject: International finance; Crude oil prices; Gold; Commodity prices
Location: India United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Swiss National Bank; NAICS: 521110; Name: Reserve Bank of India; NAICS: 521110
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2014
Publication date: Nov 29, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628599137
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gulf Markets Weaken on Falling Oil Prices; Investors Express Concern About Regional Economic Growth
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.
Abstract:
From a 12-month perspective, "...we are more circumspect about the future of oil prices and expect equity markets in the GCC to gyrate more or less in lock step with sentiment in the market for crude oil," Arjuna Mahendran, the chief investment officer at Dubai-based Emirates NBD, told clients in a note.
Full text: Stock markets in the Gulf closed sharply lower Sunday as sparked concerns about the economic growth prospects for the crude-exporting region. Saudi Arabia and its Gulf neighbors are among the biggest sellers of oil globally, using billions of dollars in revenue from hydrocarbon sales to bolster local economies. But the Organization of the Petroleum Exporting Countries--of which Saudi Arabia is the de facto leader--decided late last week to , which means a glut in the market is likely to remain and keep oil prices at multiyear lows. "Investors, especially international, are reassessing their [Gulf] regional exposure amid sharply weaker oil," said Mohammed Ali Yasin, managing director at Abu Dhabi-based NBAD Securities. "The concern obviously is that lower oil [prices] will curb the governments' ability to spend locally and grow the economies." Saudi Arabia's Tadawul, the Middle East's biggest market, led the regionwide selloff--the kingdom's benchmark index fell 4.8% to 8624.89. Dubai shares fell 4.7% to 4281.43, Abu Dhabi's market slipped 2.6% to 4675 and Doha's benchmark index shed 4.3% to 12,760.46. "Led by Saudi, which is completely correlated to the collapse in the oil price, all regional markets took another leg down," said an analyst at Al Masah Capital. "Saudi's sharp decent into a bear market cannot be ignored by the rest of the markets; in many instances it is Saudi money moving out of U.A.E. and Qatar markets that is further precipitating the regional decline," the analyst said. Stock markets in Qatar and the United Arab Emirates are among the top performers globally this year on the back of strengthening local economies, with investor interest boosted by their elevation to emerging status by index compiler MSCI Inc. in May. Saudi Arabia itself has benefited from strong buying after the authorities there announced plans to open the local market to direct foreign investment early next year. But a slump in oil prices triggered a strong bout of profit-taking in the past few months. From a 12-month perspective, "...we are more circumspect about the future of oil prices and expect equity markets in the GCC to gyrate more or less in lock step with sentiment in the market for crude oil," Arjuna Mahendran, the chief investment officer at Dubai-based Emirates NBD, told clients in a note. Saudi petrochemical companies were among the top losers. Sabic, one of the world's largest petrochemical producers, fell nearly 10% to SAR88.25 ($23.51). Amanat Holdings, which made its debut on the Dubai bourse, was also caught in the selloff, closing 12% below its issue price at AED0.88 (24 U.S. cents). Write to Nikhil Lohade at Credit: By Nikhil Lohade
Subject: Stock exchanges; Prices; Investments
Location: Dubai United Arab Emirates Qatar Saudi Arabia
Company / organization: Name: MSCI Barra; NAICS: 523999, 541690
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628786735
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628786735?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Even After Selloff, Energy Stocks Find Few Buyers; Investors Hesitate to Chase Bargains Following Oil-Price Slide
Author: Strumpf, Dan; Wirz, Matt; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.
Abstract:
"If their earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices," said Margie Patel, a portfolio manager who oversees $1.4 billion in stock and bond investments at Wells Fargo Asset Management. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn.
Full text: Energy stocks are on sale following a five-month plunge in U.S.-traded crude oil, but so far few investors are heeding the temptation to bargain-hunt. Portfolio managers and analysts covering the sector are bracing for a wave of dividend cuts, share-repurchase delays and capital-spending reductions that will likely ripple across an industry reeling from the 38% tumble in U.S. crude futures since June. Distressed-debt investors are circling a handful of deeply indebted U.S. shale-oil producers that are deemed unlikely to survive further oil-price declines without mergers or overhauls. Driving the tumult, traders and analysts say, is a steepening decline in the price of crude oil. Entering 2014, few analysts predicted that crude futures would move much from a range of $80 to $110 that has prevailed since the financial crisis. But now, following an unexpected decision by the Organization of the Petroleum Exporting Countries to maintain its existing output target, prices could soon plumb new depths, analysts say, testing the finances of many energy companies large and small. Nymex crude now sits at $66.15 a barrel, a five-year low. "There's lower prices ahead," said Ed Morse, global head of commodities research at Citigroup Inc. On Friday, energy companies in the S&P 500 tumbled 6.3% in the wake of the OPEC decision. Over the past three months, they have fallen 18.3%. The broader S&P 500 is up 3.2% in the same period. Some investors say that if the crude-price slump intensifies, many energy firms will suffer from an accelerating retreat from the sector. More firms likely will pull back on investment spending, dimming their growth prospects, while others will trim dividend payouts and share-buyback plans, reducing the appeal of their shares. Oil-field-service companies and drillers have been among the hardest hit, owing to the likelihood that producers spend less on new projects. The biggest service company by market capitalization, Schlumberger Ltd., is down 22% in the past three months, while Halliburton Co., which is in the process of buying rival service provider Baker Hughes Inc., has slid 38%. Last Wednesday, Norwegian offshore driller Seadrill Ltd. suspended its dividend to focus on paying down its debt. Shares of the company have plunged 29% since the announcement. Other drilling companies have tumbled as well, amid fears that they could follow suit in cutting dividends. Shares of Transocean Ltd. are down 17% since the news. "Everyone's paying the price for this drop in oil prices," said Jason Kotik, senior investment manager at Aberdeen Asset Management, which manages about $520 billion. "Expectations have been ratcheted down." Mr. Kotik owns shares of large service companies but said he is "struggling to find quality companies" of smaller size. While the tumble has made some shares less expensive, many investors say it is too soon to step in. The price/earnings ratio of S&P 500 energy companies over the next 12 months stood at 13.5 on Friday, down from 14.7 on June 30, according to FactSet. For the broader S&P 500, the figure is 16.2, up from 15.6 at midyear. "If their earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices," said Margie Patel, a portfolio manager who oversees $1.4 billion in stock and bond investments at Wells Fargo Asset Management. Ms. Patel remains parked in shares of oil-and-gas pipeline and storage companies, whose fortunes are less bound to the price of oil than producers and service firms are. "I think it's too early to look for bargains in the energy sector," she said. Many investors say the selloff in oil prices has reduced their appetite for the many highly indebted, more speculative companies in the sector. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn. He has been avoiding smaller companies with high levels of debt. "There's a fair amount of companies that can't survive under their leverage with lower oil prices," Mr. Dunn said. To be sure, crude prices could yet recover if the global economy rebounds, a new geopolitical risk emerges or OPEC lowers its production ceiling. At the same time, investors say a sustained drop in crude prices could drive a wave of consolidation among producers with shakier finances, leaving the sector in stronger shape in the long run. The downturn has implications for energy companies' bonds as well as their shares. A growing number of companies behind the bond bonanza are now struggling to service the debt they took on now that oil sells for less than $70 a barrel. Credit-ratings firm Moody's Investors Service on Nov. 25 changed its outlook on oil and gas producers to negative from positive, citing the likelihood of sustained weakness in oil prices. Scott Roberts, senior portfolio manager at Invesco Ltd., who helps manage $3 billion in high-yield bond investments, said he cut his holdings of energy bonds by half around midyear on expectations of lower prices, to about 5% of his portfolio. He still has a modest position, but he has recently been selectively buying bonds of producers with relatively low leverage and stronger assets, including those of California Resources Corp. and Denbury Resources Inc. He said he expects U.S. crude prices to rise starting in the first quarter of 2015 and finish the year at $80 a barrel. "There's been an opportunity here over the last couple of months to add to quality names that got oversold in this selloff," he said. The energy industry has issued $1.22 trillion of new bonds since 2009 and accounted for about 7% of all corporate bonds over that period, according to Dealogic. That is about twice the $622 billion the industry borrowed from 1995 through 2008. Offshore oil driller Energy XXI Ltd. has been a hedge-fund darling in recent years with Mount Kellett Capital Management LP and Kyle Bass's Hayman Capital LP holding as much as 11% of its shares, according to Capital IQ. The company more than doubled its debt load to $3.8 billion this year to acquire EPL Oil & Gas and a bond it sold in May to finance the deal has fallen 25% to 75 cents on the dollar since September. Its stock fell 37% on Friday to $4.01. In a statement, the company said it has hedges in place to help weather a downturn in oil prices and said it is "cash-flow neutral" with oil around "the mid $60s" through next year. In 2011, private-equity firm KKR & Co. acquired Samson Resources Corp. for $7.2 billion with more than $4 billion of debt, making the deal the second largest leveraged buyout of the year. But Samson's cash flows are "significantly impacted by the price we receive for our oil," the company said in its third-quarter earnings report. Samson's bond prices have fallen by 42% since early September, according to FactSet. The company couldn't be reached for comment. Oil's dramatic move downward takes the commodity far below where one of the world's most well-known oil speculators, former Citigroup Inc. trader Andrew Hall, pegged as a potentially profitable entry point. Mr. Hall told investors this fall in his Astenbeck Capital Management LLC hedge fund that oil at $85 a barrel "could be a bargain," particularly for delivery contracts several years into the future, as relatively low prices should stimulate demand by boosting global GDP growth, according to investor communications viewed by The Wall Street Journal. Astenbeck's November performance wasn't immediately available, but the fund lost money in October amid falling oil prices, paring its gains for the year. Rob Copeland contributed to this article. Credit: By Dan Strumpf, Matt Wirz and Nicole Friedman
Subject: Petroleum industry; Energy industry; Investments; Asset management; Crude oil prices
Location: United States--US
Company / organization: Name: Seadrill Ltd; NAICS: 213111; Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Aberdeen Asset Management; NAICS: 523920; Name: Transocean Ltd; NAICS: 213111, 213112; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628803820
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628803820?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chevron Takes Ecuador's Government to Court; By fighting a dodgy lawsuit, the giant oil company may help the country's democracy.
Author: O'Grady, Mary Anastasia
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.
Abstract: None available.
Full text: New York federal judge Lewis Kaplan ruled last week that Chevron may "conduct discovery" regarding a $6.4 million contract between the government of Ecuador and MCSquared, a Brooklyn, N.Y., public-relations firm. Score another victory for the oil company over plaintiffs seeking to blame it for environmental damage in the Ecuadorean jungle. MCSquared "likely possesses evidence relating to the coordination between the Republic of Ecuador and the plaintiffs behind the fraudulent lawsuit," Chevron said in a statement on Nov. 24. The company is attempting to scrutinize Ecuador's role in what increasingly looks like a corporate shakedown. But Chevron isn't the only potential beneficiary of what might come to light. Ecuadoreans who live powerlessly under a repressive, secretive regime that bills itself as democratic will also be better informed. No opposition member of the national assembly has access to public contracts under Ecuadorean President Rafael Correa. Requests for such information are batted away by the government-controlled legislature and ignored by the attorney general and comptroller general. When opposition congressman Andrés Páez asked the government to provide the details of what MCSquared did to earn the $6.4 million, the government launched a smear campaign against him and accused him of being a CIA agent. In 2011 an Ecuadorean court ruled that Chevron had to pay $18.2 billion for environmental degradation that plaintiffs allege Texaco left behind in the jungle. Last year an Ecuadorean appellate court cut the award to $9.5 billion. But Chevron maintains that Texaco, which it bought in 2001, met its cleanup obligations and was released by Ecuador from further liability in 1998. It's not about to knuckle under to the lower amount either. In 2013 Chevron sued plaintiffs' lawyer Steven Donziger in federal court in New York under the Racketeer Influenced and Corrupt Organizations (RICO) Act--and won. Judge Kaplan found that Mr. Donziger had engaged in coercion, bribery and the fabrication of evidence, among other misdeeds, in the Ecuador court. Mr. Donziger is appealing the verdict. Regardless of the outcome of the appeal, the plaintiffs are trying to have the Ecuadorean ruling enforced in places where Chevron has assets, including Brazil, Argentina and Canada. Chevron is fighting back. Discovery is one useful tool. As an example, it yielded incriminating outtakes from a film that Mr. Donziger was making about the lawsuit in Ecuador. The information helped Chevron make its case in the RICO trial. Now the oil company wants the details in the MCSquared relationship that might be relevant to its claim that Mr. Correa's government is working to discredit Chevron and to "promote enforcement" of what Chevron says was a fraudulent judgment. "That evidence is relevant to Chevron's ongoing cases in other foreign jurisdictions," the company said in its statement on Nov. 24. In 2011 Mr. Correa began a process to close Ecuador's Supreme Court and to create a new Supreme Court that he controls. He also introduced a law that allows an executive-controlled judicial council to remove any judge for "inexcusable mistakes." Since then, the practice of jailing adversaries or assigning them hefty fines has chilled public criticism. Yet outside the country it's more difficult to control the narrative. That's where MCSquared comes in. The company filed with the Justice Department as an agent of a foreign government in July, more than a year after its $6.4 million contract with Ecuador was signed. Chevron wasn't mentioned. But in the contract attached to the filing, Ecuador describes the need to "execute a strategy of immediate containment to reduce any damage or mitigate the effects of" actions by multinational organizations and corporations to diminish Ecuador's reputation "on the international level." Mr. Correa seems to have had Chevron in mind. In an amended foreign-agent filing dated Sept. 10, MCSquared included multiple press releases denouncing Chevron as a polluter of the Amazon. Bloomberg journalist Paul Barrett reported in May that protesters at an anti-Chevron demonstration held at the company's annual shareholder meeting in Midland, Texas, were paid $85 per person. Hollywood celebrities have also been generously compensated for their "outrage," as MCSquared's September amended filing indicates. Yet a cool $4.5 million is still unaccounted for. That's the difference between the $1.9 million in disbursements detailed in MCSquared's September filing and the total amount paid to MCSquared according to the July filing. The government has not denied paying the full amount of the contract but will not answer Andrés Páez's inquiry about where the rest of the money went. I called MCSquared's Jean-Paul Borja, a communications adviser at the company, on Wednesday. He told me to call back on Friday. On Friday he did not answer his phone and did not return messages I left on his voice mail. Perhaps Ecuadoreans will learn more when Chevron goes to discovery with MCSquared. Write to O'Grady@wsj.com Credit: By Mary Anastasia O'Grady
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 30, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628811142
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628811142?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Global Shakeout From Plunging Oil; New supply--rather than demand--is dominating the market, and OPEC has been caught by surprise.
Author: Yergin, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Nov 2014: n/a.
Abstract:
The turmoil in prices, with spasmodic plunges over the past few days, will likely continue. Since 2008--when fear of "peak oil," after which global output would supposedly decline, was the dominant motif--U.S. oil production has risen 80%, to nine million barrels daily. [...]Venezuela would be the No. 1 loser if the Keystone XL pipeline is built, as production from Canadian oil sands would displace Venezuelan heavy oil from its largest single market, the U.S. Gulf Coast refineries.
Full text: The decision by members of the Organization of the Petroleum Exporting Countrieson Thursday not to cut production reflects a profound shift in the world oil market. The demand for oil--by China and other emerging economies--is no longer the dominant factor. Instead, the surge in U.S. oil production, bolstered by additional new supply from Canada, is decisive. This surge is on a scale that most oil exporters had not anticipated. The turmoil in prices, with spasmodic plunges over the past few days, will likely continue. Since 2008--when fear of "peak oil," after which global output would supposedly decline, was the dominant motif--U.S. oil production has risen 80%, to nine million barrels daily. The U.S. increase alone is greater than the output of every OPEC country except Saudi Arabia. The world has experienced sudden supply gushers before. In the early 1930s, a flood of oil from East Texas drove prices down to 10 cents a barrel--and desperate gas station owners offered chickens as premiums to bring in customers. In the late 1950s, the rapidly swelling flow of Mideast oil led to price cuts that triggered the formation of OPEC. And in the first half of the 1980s, a surge in oil from the North Sea, Alaska's North Slope and Mexico caused prices to plunge to $10 a barrel. That posed a much greater crisis for OPEC than today: Over those same years, global demand fell by more than two million barrels a day owing to a deep recession, greater conservation and the switch to coal from oil for electricity generation. This time world oil demand is still growing, but weakly. For the past three years, oil prices hovered around $100 a barrel as disruptions in Libya, South Sudan and elsewhere, and sanctions on Iranian exports, eerily balanced out the production increases from the U.S. and Canada. But the slower global economic growth that became apparent a few months ago was accompanied by weaker demand for oil, just when Libya suddenly quadrupled output to almost a million barrels a day. The result: Prices weakened in September and then tumbled. OPEC's decision last week reflects the conviction of its "have" nations--the Persian Gulf countries, with very large financial reserves--that cutting output would mean losing market share, particularly to Iran and to what they see as Iran-dominated Iraq. Instead, they have adopted a strategy of leaving it to the market for now; OPEC is waiting, in the words of Saudi Oil Minister Ali al-Naimi, for the oil market "to stabilize itself eventually." It is now clear that the new U.S. production is more resilient than anticipated. There has been a widespread view that at around $85 or $90 a barrel extracting "tight" oil from shale would no longer be economical. However, a new IHS based on individual well data finds that 80% of new tight-oil production in 2015 would be economic between $50 and $69 a barrel. And companies will continue to improve technology and drive down costs. True, with prices now near or below $70 a barrel, U.S. companies are looking hard at their investment plans--where and how much to cut or postpone. But it will take time for these decisions to affect supply. U.S. oil output will continue to rise in 2015. The OPEC members in big trouble are the "have-nots"--those with small financial reserves and high government budgets. No country clamored more loudly for OPEC production cuts than Venezuela. Once an oil powerhouse, Venezuela depends on oil revenues for up to 65% of government spending. But its production has fallen by a third since 2000. Owing to gross mismanagement, Venezuela's economy is already in chaos, its political system in crisis and unrest is mounting. And Venezuela would be the No. 1 loser if the Keystone XL pipeline is built, as production from Canadian oil sands would displace Venezuelan heavy oil from its largest single market, the U.S. Gulf Coast refineries. Iran also clamored loudly for a production cut. High prices earlier this year give Tehran some budget cushion, but the government has little leeway for the next fiscal year. Iran depends on oil for half of its budget, and the country is already suffering from sanctions, which have cut its oil exports almost in half. Lower prices will prolong Iran's recession. A few days ago President Vladimir Putin said that Russia, the world's largest oil producer and not a member of OPEC, is preparing for lower, even "catastrophic" oil prices. Oil provides over 40% of the Russian budget, but Mr. Putin has built up foreign exchange reserves worth a few hundred billion dollars, in part to cope with an oil-price collapse. Still, in an economy that is heavily dependent on imports of food and consumer goods, the falling value of the ruble means rising prices for imports, in effect slashing the incomes of consumers. Combined with the effect of sanctions from the Ukraine crisis, this means Russia is headed for recession. The biggest impact of lower oil prices on future output may well be not in North America, where many people are looking for it, but in the rest of the world. Even before the collapse in prices, major oil and natural-gas companies had become preoccupied with the continually rising costs of developing new supply and were heeding the call from investors for "capital discipline." This price decline will turn this preoccupation into an obsession. The result will be a slowdown and reduction in major new investments around the world. The losers will be the nations trying to woo investment for new oil and natural-gas projects. Countries in Africa, Asia and Latin America are already finding that fewer companies are showing up to bid for new opportunities, and such bids that are proffered will be lower, perhaps much lower, than governments were expecting. The days are past when these countries can insist on very tough terms in taxes, royalties and other requirements that drive up costs and cause delay. The drama is far from over. If prices remain close to their current level, OPEC members will likely come together again to reassess the market, especially as the stronger winter demand fades with the approach of spring. But a pickup in world economic growth, or new disruptions or geopolitical crises in the Middle East or North Africa or elsewhere, could send prices up again. Mr. Yergin, vice chairman of IHS, is author of "The Quest: Energy, Security, and the Remaking of the Modern World" (Penguin Press, 2012). Credit: By Daniel Yergin
Subject: Petroleum industry; Supply & demand; Cartels; Recessions; Petroleum production; Electricity generation; Production increases; Price cuts
Location: China Iran Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Nov 30, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628811144
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628811144?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Lessons From Oil's Black Friday
Author: Zweig, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
[...]you earn a positive "roll return" if you can sell this month's futures contract for more than it costs to buy next month's. [...]you earn interest on the collateral that secures your bet.
Full text: Long before it referred to consumers storming through shopping malls, "Black Friday" stood for a dire day in the financial markets. On Friday, Sept. 24, 1869, an attempt by mogul Jay Gould and his cronies to corner the gold market failed and --sending many speculators to their ruin. At the end of last week, the commodities market had a Black Friday that harked back to that devastation of 145 years earlier. The prices of U.S. crude oil fell 10.2%, silver 6.4%, natural gas 6.1% and copper 5.8%. The Alerian MLP Index--a basket of companies, organized as master limited partnerships, that handle and distribute oil and gas--fell 5.3%. Gold got off easy, losing a mere 1.8%. There are lessons in this latest Black Friday for all investors, not just those who lost money on commodities. Here are some of the most salient. Beware of extreme extrapolations. In 2008, as the price of oil brushed past $145 a barrel, analysts rushed to get out ahead of the "trend" with their predictions of where the price was headed. Goldman Sachs called for oil prices to hit $200; of the industry foresaw the price reaching $300. Right on cue, oil went down, not up--divebombing 77% between July and December 2008 and bottoming barely above $30 a barrel. Analysts then hastened to reverse their projections, just in time for oil prices to go right back up. Now that oil has fallen 38% in five months, you should expect a rash of predictions of apocalyptically low prices. If you own energy stocks or MLPs, it is probably too late to sell them (unless you can use a tax loss to offset realized gains elsewhere in your portfolio). Instead, watch for the last optimists to be swept away by pessimism--at which point it will be an opportune time to add to your energy stocks or MLPs. We're probably not there yet. With any asset, be skeptical of anyone who forecasts either an epic boom after prices have risen or an even more catastrophic collapse after they have fallen hard. When the consensus is strong, it's wrong. Between Nov. 4 and 11, more than 900 institutional investors and traders participated in the latest Barclays Global Macro Survey, a poll among clients of the global bank. They predicted, on average, that energy would generate more than a 30% return by the end of March 2015. Barely 5% predicted that the price for Brent crude oil--then about $82 a barrel--would be below $70 at the end of the first quarter of 2015. One in six said it would be $90 to $100. There is still time for them to be proved right, of course, but Brent sank 3.5% to $70.02 on Black Friday. By the same token, the consensus on 2015 stock returns--that --is probably wrong, too. The outcome that is most widely expected is the one that is least likely to be realized. Understand how you will make money before you risk losing it. A stock generates returns through dividends, earnings growth and any potential rise in price. A bond provides returns through interest payments and any capital gain. Real estate produces rental income and a possible gain on sale. The return on commodities comes from different sources. First, the market, or "spot," price can go higher than what you paid for it. Second, you earn a positive "roll return" if you can sell this month's futures contract for more than it costs to buy next month's. Finally, you earn interest on the collateral that secures your bet. Historically, the long-term performance of commodities, but it has been largely negative in recent years as . And collateral return, which was significantly positive in the past, has been squeezed to almost nothing in today's low-interest-rate world. So two of the three sources of return have been impaired. When spot prices plunge, as they just did, there's little else to support returns. More than $69 billion in new money poured into commodity mutual funds and exchange-traded funds between 2009 and 2011, the year gold glittered above $1,800 an ounce. Asking your financial adviser to explain exactly might have stopped him from steamrolling you into a strategy that you--and perhaps he--didn't understand. The future returns on stocks and bonds have been crimped, too, of course. With the S&P 500's dividend yield just under 2%, the long-term growth rate of dividends and earnings at about 4.5% (including inflation), and a haircut of 0.5% to 1% to account for today's high stock prices, a sensible expectation for long-term annual stock returns is 5.5% to 6% (including inflation), says William Bernstein, an investment manager at Efficient Frontier Advisors in Eastford, Conn. And with the Barclays U.S. Aggregate Bond Index yielding just over 2%, bond investors can't earn much more than that without taking excessive risk. The ultimate lesson: When assets are priced for perfection in an imperfect world, investors who don't slash their expectations are apt to be disappointed at best and devastated at worst. intelligentinvestor@wsj.com; twitter.com/jasonzweigwsj Credit: By Jason Zweig
Subject: Master limited partnerships; Crude oil prices; Institutional investments; Petroleum industry; Crude oil; Statistical data
Location: United States--US
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: News
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628829116
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829116?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Even After Selloff, Energy Stocks Find Few Buyers; Investors Hesitate to Chase Bargains Following Oil-Price Slide
Author: Strumpf, Dan; Wirz, Matt; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
"If their earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices," said Margie Patel, a portfolio manager who oversees $1.4 billion in stock and bond investments at Wells Fargo Asset Management. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn.
Full text: Energy stocks are on sale following a five-month plunge in crude oil, but so far few investors are heeding the temptation to bargain-hunt. Portfolio managers and analysts covering the sector are bracing for a wave of dividend cuts, share-repurchase delays and capital-spending reductions that will likely ripple across an industry reeling from the 38% tumble in U.S. crude futures since June. Distressed-debt investors are circling a handful of deeply indebted U.S. shale-oil producers that are deemed unlikely to survive further oil-price declines without mergers or overhauls. Driving the tumult, traders and analysts say, is a steepening decline in the price of crude oil. Entering 2014, few analysts predicted that crude futures would move much from a range of $80 to $110 that has prevailed since the financial crisis. But now, following an unexpected decision by the Organization of the Petroleum Exporting Countries to maintain its existing output target, prices could soon plumb new depths, analysts say, testing the finances of many energy companies large and small. Early Monday in Asia, Nymex crude stood at $64.74 a barrel, a five-year low. "There's lower prices ahead," said Ed Morse, global head of commodities research at Citigroup Inc. On Friday, energy companies in the S&P 500 tumbled 6.3% in the wake of the OPEC decision. Over the past three months, they have fallen 18.3%. The broader S&P 500 is up 3.2% in the same period. Some investors say that if the crude-price slump intensifies, many energy firms will suffer from an accelerating retreat from the sector. More firms likely will pull back on investment spending, dimming their growth prospects, while others will trim dividend payouts and share-buyback plans, reducing the appeal of their shares. Oil-field-service companies and drillers have been among the hardest hit, owing to the likelihood that producers will spend less on new projects. The biggest service company by market capitalization, Schlumberger Ltd., is down 22% in the past three months, while Halliburton Co., which is in the process of buying rival service provider Baker Hughes Inc., has slid 38%. Last Wednesday, Norwegian offshore driller Seadrill Ltd. suspended its dividend to focus on paying down its debt. Shares of the company have plunged 29% since the announcement. Other drilling companies have tumbled as well, amid fears that they could follow suit in cutting dividends. Shares of Transocean Ltd. are down 17% since the news. "Everyone's paying the price for this drop in oil prices," said Jason Kotik, senior investment manager at Aberdeen Asset Management, which manages about $520 billion. "Expectations have been ratcheted down." Mr. Kotik owns shares of large service companies but said he is "struggling to find quality companies" of smaller size. While the tumble has made some shares less expensive, many investors say it is too soon to step in. The price/earnings ratio of S&P 500 energy companies over the next 12 months stood at 13.5 on Friday, down from 14.7 on June 30, according to FactSet. For the broader S&P 500, the figure is 16.2, up from 15.6 at midyear. "If their earnings fall even more due to depressed oil prices and low demand for energy services, these stocks could still be expensive, even at these lower prices," said Margie Patel, a portfolio manager who oversees $1.4 billion in stock and bond investments at Wells Fargo Asset Management. Ms. Patel remains parked in shares of oil-and-gas pipeline and storage companies, whose fortunes are less bound to the price of oil than producers and service firms are. "I think it's too early to look for bargains in the energy sector," she said. Many investors say the drop in oil prices has reduced their appetite for the many highly indebted, more speculative companies in the sector. Aaron Dunn, energy analyst on the $8.6 billion value-investing team at fund manager Eaton Vance Corp., said in the past two months one fund he works on has bought shares of large integrated oil companies including Exxon Mobil Corp., whose shares have held up better in the downturn. He has been avoiding smaller companies with high levels of debt. "There's a fair amount of companies that can't survive under their leverage with lower oil prices," Mr. Dunn said. To be sure, crude prices could yet recover if the global economy rebounds, a new geopolitical risk emerges or OPEC lowers its production ceiling. At the same time, investors say a sustained drop in crude prices could drive a wave of consolidation among producers with shakier finances, leaving the sector in stronger shape in the long run. The downturn has implications for energy companies' bonds as well as their shares. A growing number of companies behind the bond bonanza are struggling to service the debt they took on now that oil sells for less than $70 a barrel. Credit-ratings firm Moody's Investors Service on Nov. 25 changed its outlook on oil-and-gas producers to negative from positive, citing the likelihood of sustained weakness in oil prices. Scott Roberts, senior portfolio manager at Invesco Ltd., who helps manage $3 billion in high-yield bond investments, said he cut his holdings of energy bonds by half around midyear on expectations of lower prices, to about 5% of his portfolio. He still has a modest position, but he has recently been selectively buying bonds of producers with relatively low leverage and stronger assets, including those of California Resources Corp. and Denbury Resources Inc. He said he expects U.S. crude prices to rise starting in the first quarter of 2015 and finish the year at $80 a barrel. "There's been an opportunity here over the last couple of months to add to quality names that got oversold in this selloff," he said. The energy industry has issued $1.22 trillion of new bonds since 2009 and accounted for about 7% of all corporate bonds over that period, according to Dealogic. That is about twice the $622 billion the industry borrowed from 1995 through 2008. Offshore oil driller Energy XXI Ltd. has been a hedge-fund darling in recent years with Mount Kellett Capital Management LP and Kyle Bass's Hayman Capital LP holding as much as 11% of its shares, according to Capital IQ. The company more than doubled its debt load to $3.8 billion this year to acquire EPL Oil & Gas, and a bond it sold in May to finance the deal has fallen 25% to 75 cents on the dollar since September. Its stock fell 37% on Friday to $4.01. In a statement, the company said it has hedges in place to help weather a downturn in oil prices and said it is "cash-flow neutral" with oil around "the mid $60s" through next year. In 2011, private-equity firm KKR & Co. acquired Samson Resources Corp. for $7.2 billion with more than $4 billion of debt, making the deal the second-largest leveraged buyout of the year. But Samson's cash flows are "significantly impacted by the price we receive for our oil," the company said in its third-quarter earnings report. Samson's bond prices have fallen by 42% since early September, according to FactSet. The company couldn't be reached for comment. Oil's dramatic move downward takes the commodity far below where one of the world's most well-known oil speculators, former Citigroup Inc. trader Andrew Hall, pegged as a potentially profitable entry point. Mr. Hall told investors this fall in his Astenbeck Capital Management LLC hedge fund that oil at $85 a barrel "could be a bargain," particularly for delivery contracts several years into the future, as relatively low prices should stimulate demand by boosting global GDP growth, according to investor communications viewed by The Wall Street Journal. Astenbeck's November performance wasn't immediately available, but the fund lost money in October amid falling oil prices, paring its gains for the year. Rob Copeland contributed to this article. Write to Dan Strumpf at , Matt Wirz at and Nicole Friedman at Credit: By Dan Strumpf, Matt Wirz and Nicole Friedman
Subject: Petroleum industry; Energy industry; Investments; Asset management; Crude oil prices
Location: United States--US
Company / organization: Name: Seadrill Ltd; NAICS: 213111; Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Aberdeen Asset Management; NAICS: 523920; Name: Transocean Ltd; NAICS: 213111, 213112; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628829158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829158?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Despite Glut, U.S. Firms Aren't Likely to Slash Oil Output; New Pressure From OPEC Will Cause Pain for American Energy Firms
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
The growth in U.S. energy output could begin to slow toward the end of next year, said Jeff Tillery, an analyst at Tudor, Pickering, Holt & Co., noting that if U.S. oil prices stay at about $70 a barrel, drilling activity in terms of rig count and capital expenditures could decline roughly 25% next year.
Full text: New pressure from OPEC will cause a lot of pain for U.S. energy companies, but they probably won't slash American oil output anytime soon, experts said this weekend. The decision by the Organization of the Petroleum Exporting Companies to maintain crude output despite a global glut sent the benchmark price for American oil tumbling Friday to $66.15, its lowest level since September 2009. Companies loaded with too much debt or operating in fringe locations face big trouble if U.S. crude prices remain at $65 to $70 a barrel for long. But many shale drillers are likely to cut spending while still pumping from cheap-to-produce areas like the Eagle Ford and Permian in Texas. And some companies have oil-price hedges that will buoy profits even if crude is trading at four-year lows. Take Goodrich Petroleum Corp., a small Houston company that drills most of its wells in the Tuscaloosa Marine Shale in Mississippi and Louisiana, a less developed and still high-cost area. The company's shares plunged 34% on Friday, to $6.05, and they are down almost 80% since oil prices started declining in June. The company will probably cut spending, but it also expects to increase the amount of oil it pumps, its president, Robert Turnham, said in an email. A significant portion of the company's anticipated 2015 oil production is hedged at $96 a barrel, he said, adding that the company plans to "live within our means until oil prices recover to a more reasonable level." Other companies have already begun pulling back on 2015 spending plans, including Continental Resources Inc., a major producer in North Dakota's Bakken Shale that has said it won't add any new rigs next year. More are expected to follow in the coming weeks as they set next year's capital-expenditure budgets. But that doesn't translate into a steep drop in output, noted Leo Mariani, an analyst at RBC Capital Markets LLC. "No one's going to shut in existing producing wells," he said, "just less spending next year." His forecast is for a roughly 15% decline in capital spending on U.S. onshore drilling in 2015. The growth in U.S. energy output could begin to slow toward the end of next year, said Jeff Tillery, an analyst at Tudor, Pickering, Holt & Co., noting that if U.S. oil prices stay at about $70 a barrel, drilling activity in terms of rig count and capital expenditures could decline roughly 25% next year. But he believes production growth will pick up in 2016 as prices and demand recover. Some analysts believe U.S. companies will attempt to outlast OPEC, whose resolve to let the market move oil prices may be weakened by the suffering of member countries like Venezuela, Iran and Ecuador, whose economies depend on higher oil prices. "They believe, as I believe, that OPEC is not going to be able to hold out," said Dominick A. Chirichella, an analyst for the New York-based Energy Management Institute. Meanwhile, he said, lower oil prices will translate into cheaper gasoline costs--"a wonderful Christmas present for the consumer." Some U.S. companies will begin absorbing weaker operators. Nasdaq energy analyst Tamar Essner said she expects consolidation first among services companies, then perhaps among pipeline operators. Producers, she added, might try to consolidate acreage in important areas such as the Eagle Ford and Permian shale regions of Texas and the Bakken of North Dakota."In terms of major transactions on the producers' side, I see that as being muted for a while," she said, as companies wait to see if oil prices stabilize. Write to Erin Ailworth at Credit: By Erin Ailworth
Subject: Crude oil prices; Petroleum industry; Capital expenditures; Petroleum production
Location: United States--US Texas
Company / organization: Name: RBC Capital Markets; NAICS: 523110; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journa l (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628829354
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628829354?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moving the Market -- MoneyBeat: Oil Finds Its Crisis Level
Author: Grocer, Stephen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Dec 2014: C.2.
Abstract:
The Organization of the Petroleum Exporting Countries' decision to maintain its crude-output ceiling sent U.S. benchmark oil prices down by 10% Friday to $66.15 a barrel, the lowest level since September 2009.
Full text: The slide in U.S. oil prices is reaching levels not seen since the financial crisis. The Organization of the Petroleum Exporting Countries' decision to maintain its crude-output ceiling sent U.S. benchmark oil prices down by 10% Friday to $66.15 a barrel, the lowest level since September 2009. Even before Friday's selloff, U.S. oil futures were off about 25% this year due to rising output in the U.S. and Libya and sluggish global demand. The U.S. benchmark has fallen for five consecutive months, its longest losing streak since the financial crisis roiled markets five years ago. The price is down 37.2% over that period and 38.3% since hitting its 52-week high of $107.26 on June 20. The last time U.S. oil prices fell so rapidly over a five-month period was between September 2008 and February 2009, when the price for the U.S. benchmark tumbled 55.5%. Credit: By Stephen Grocer
Subject: Crude oil prices
Location: United States--US
Classification: 9190: United States; 1510: Energy resources; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.2
Publication year: 2014
Publication date: Dec 1, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newsp apers
Language of publication: English
Document type: News
ProQuest document ID: 1628844561
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628844561?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BG Group Reduces Helge Lund's CEO Pay Package; British Oil and Gas Group Bows to Shareholder Pressure, Scraps $19 Million Share Award
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract: None available.
Full text: LONDON--BG Group PLC has bowed to investor pressure and scrapped a share award valued at £12 million ($19 million) for the British energy group's incoming chief executive, following one of the biggest revolts over executive pay in the U.K. in recent years. The U.K. oil and natural-gas producer said on Monday that Helge Lund, who starts as CEO in March, won't be receiving the previously offered performance-linked award of £12 million over five years. Shareholders had objected to the award's size and the fact that it fell outside the company's remuneration policy, which they had approved in May. Instead, the 52-year-old Mr. Lund, who had been chief executive of Statoil ASA, is to get an initial award of shares under BG's existing long-term incentive plan. On paper, the award is valued at £10.6 million, but because it is subject to it is expected to realize a value of roughly £4.7 million, the company said. Following BG's climb-down, a Dec. 15 shareholder vote on Mr. Lund's share award has been canceled. Mr. Lund, meanwhile, has waived his right not to join the company. Previously, he was under no obligation to take the CEO job if shareholders rejected the £12 million conditional share award. Mr. Lund's revised initial share award comes on top of a salary and other bonuses and awards of as much as £14 million annually, if he and BG hit various targets. BG has been without a CEO since the previous boss, Chris Finlayson, resigned in April after only 16 months in the job, leaving Chairman Andrew Gould in charge and looking for a successor. The company, which was once a top pick for investors in the sector, has fallen out of favor following a series of , production downgrades and cost overruns on big projects. Its by nearly one-third this year, making the company--whose assets include highly prized oil fields in Brazil and gas discoveries in Tanzania--more attractive as a takeover target. While most investors have agreed that Mr. Lund has the relevant experience to become BG's new boss, they were concerned that BG's generous offer could lead to across the oil and gas sector. Sacha Sedan, director of corporate governance at Legal & General Investment Management, a top-10 investor in BG, said he was encouraged to see the company responding to investor concerns. "As long-term engaged investors, we look forward to the new CEO joining and creating shareholder value for all," he said. The Institute of Directors, a leading U.K. business lobby group that last week criticized Mr. Lund's pay package, applauded BG's move. "While substantial, the total remuneration is reduced and now falls within proper limits for a company of BG's size and international importance," said Simon Walker, the group's director general. British investor-advisory group Pensions & Investment Research Consultants, or PIRC, told clients last week that the additional share award for Mr. Lund hadn't been adequately justified. Mr. Lund already stood to receive compensation well beyond levels granted to European peers in the sector, PIRC said. Write to Selina Williams at Credit: By Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628845141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628845141?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Slump Weighs on Markets; Russian Ruble Falls to Record Low
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Brent crude oil dropped more than 3.5% to $67.53 a barrel before recovering to trade around $71.80, as last week's decision by the Organization of the Petroleum Exporting Countries to leave its continued to rattle markets.
Full text: The recent slump in oil prices continued to weigh on global markets Monday, dragging down stocks and hammering the Russian ruble in particular. Brent crude oil dropped more than 3.5% to $67.53 a barrel before recovering to trade around $71.80, as last week's decision by the Organization of the Petroleum Exporting Countries to leave its continued to rattle markets. Compared with the 13% drop in Brent crude last week, and the particularly abrupt slide on Friday, oil prices were relatively steady Monday but the repercussions of the last week's move remained intense. The Russian ruble, closely linked to oil because energy accounts for a big portion of the country's exports, of 53.90 to the dollar, more than 5% weaker on the day. Later, the currency picked up from its weakest levels, amid signs of moderate dollar sales by the central bank, according to traders. The slide in oil is "reinforcing the loss of investor confidence in the ruble," which has also been beset by concerns over Western sanctions against Russia and the conflict in Ukraine, said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ. Piotr Chwiejczak, an emerging-market strategist at BNP Paribas said that he was surprised that Russia's central bank had not defended the 50 ruble per dollar mark more fiercely. "I still think that capital controls are pointless but I do think that interest rates need to be a lot higher," he said. The Nigerian naira also fell to a fresh record low against the dollar, but other energy-linked currencies proved more resilient, with the Canadian dollar and Norwegian krone rising, having fallen sharply on Friday. Elsewhere, Stock markets felt the effects of the recent falls in energy prices. In Europe, the Stoxx Europe 600 ended the session 0.5% lower. Energy stocks once again led declines, with oil and gas producers on the index down 0.9%. Additionally, markets were also weighed down by showing a slower-than-expected pace of expansion in November. Similar data from . In the U.S., the S&P 500 was trading 0.9% lower and the Dow Jones Industrial Average was down 0.4% in late European trade, with traders citing for the Thanksgiving weekend. Retail spending over the Black Friday weekend fell 11%, according to the main industry trade group, a sign that early deals are losing their allure. Separately, data on the U.S. manufacturing sector showed a modest slowdown as well. Gold prices were also volatile Monday. They initially dropped after a proposal to increase the central bank's gold holdings. The initiative would have forced the country's central bank to hold one-fifth of its assets in gold. Gold fell by 1.7% to $1,155.20 a troy ounce in early European trade before recovering to $1,197.50 an ounce. Helping offset the pressure on the precious metal after the Swiss vote, India lifted its trade restrictions on gold imports with immediate effect. Given the move by one of the top gold importers, analysts at Barclays said they "expect the floor for gold prices to firm". Elsewhere, a by Moody's Investors Service only briefly dented the performance of the yen, which quickly rebounded from a seven-year low against the dollar to rise 0.2%. Although a rating cut often hurts a country's currency, the yen tends to rise in times of market stress because it is seen by investors as a safe haven. Brendan Brown, head of economic research at Mitsubishi UFJ Securities International, also said that the Moody's move was largely priced in and that the muted market reaction was therefore not surprising. There are many reasons to be worried about Japan but this credit rating cut is certainly not one of them," he said. The Nikkei stock index had closed for the day before the announcement, up 0.8% at a seven-year high. Back in Europe, investors are looking ahead to Thursday's European Central Bank meeting, with expectations building that officials will signal a strong intention to expand their asset purchase program to try and boost anemic rates of inflation and jump-start a flagging economy. Weakness in commodities has acted as a drag on prices, piling further pressure on central bankers in the eurozone and elsewhere to take action. "The immediate focus will remain on cheaper oil; good news for consumers and for those companies benefiting from reduced input cost pressures, less so for central bankers wrestling with disinflationary concerns," said Ian Williams, an economist and strategist at brokerage Peel Hunt. Government bonds in the eurozone hit fresh record highs amid expectations of further ECB easing. Germany's 10-year yield dipped just below 0.7% in early trade, a new low. Yields fall as prices rise. Write to Tommy Stubbington at and Josie Cox at Credit: By Tommy Stubbington and Josie Cox
Subject: American dollar; Central banks; Stock exchanges; Investments; International trade; Trade restrictions; Currency; Dow Jones averages
Location: Russia
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628853603
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628853603?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: U.S. Firms Aren't Likely to Slash Oil Output --- Amid New Price Pressures, Many Shale Drillers Are Expected to Cut Spending but Continue Pumping at Low-Cost Sites
Author: Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]01 Dec 2014: B.3.
Abstract:
The growth in U.S. energy output could begin to slow toward the end of next year, said Jeff Tillery, an analyst at Tudor, Pickering, Holt & Co., noting that if U.S. oil prices stay at about $70 a barrel, drilling activity in terms of rig count and capital expenditures could decline roughly 25% next year.
Full text: New pressure from OPEC will cause a lot of pain for U.S. energy companies, but they probably won't slash American oil output anytime soon, experts said this weekend. The decision by the Organization of the Petroleum Exporting Companies to maintain crude output despite a global glut sent the benchmark price for American oil tumbling Friday to $66.15, its lowest level since September 2009. Companies loaded with too much debt or operating in fringe locations face big trouble if U.S. crude prices remain at $65 to $70 a barrel for long. But many shale drillers are likely to cut spending while still pumping from cheap-to-produce areas like the Eagle Ford and Permian in Texas. And some companies have oil-price hedges that will buoy profits even if crude is trading at four-year lows. Take Goodrich Petroleum Corp., a small Houston company that drills most of its wells in the Tuscaloosa Marine Shale in Mississippi and Louisiana, a less developed and still high-cost area. The company's shares plunged 34% on Friday, to $6.05, and they are down almost 80% since oil prices started declining in June. The company will probably cut spending, but it also expects to increase the amount of oil it pumps, its president, Robert Turnham, said in an email. A significant portion of the company's anticipated 2015 oil production is hedged at $96 a barrel, he said, adding that the company plans to "live within our means until oil prices recover to a more reasonable level." Other companies have already begun pulling back on 2015 spending plans, including Continental Resources Inc., a major producer in North Dakota's Bakken Shale that has said it won't add any new rigs next year. More are expected to follow in the coming weeks as they set next year's capital-expenditure budgets. But that doesn't translate into a steep drop in output, noted Leo Mariani, an analyst at RBC Capital Markets LLC. "No one's going to shut in existing producing wells," he said, "just less spending next year." His forecast is for a roughly 15% decline in capital spending on U.S. onshore drilling in 2015. The growth in U.S. energy output could begin to slow toward the end of next year, said Jeff Tillery, an analyst at Tudor, Pickering, Holt & Co., noting that if U.S. oil prices stay at about $70 a barrel, drilling activity in terms of rig count and capital expenditures could decline roughly 25% next year. But he believes production growth will pick up in 2016 as prices and demand recover. Some analysts believe U.S. companies will attempt to outlast OPEC, whose resolve to let the market move oil prices may be weakened by the suffering of member countries like Venezuela, Iran and Ecuador, whose economies depend on higher oil prices. "They believe, as I believe, that OPEC is not going to be able to hold out," said Dominick A. Chirichella, an analyst for the New York-based Energy Management Institute. Meanwhile, he said, lower oil prices will translate into cheaper gasoline costs -- "a wonderful Christmas present for the consumer." Some U.S. companies will begin absorbing weaker operators. Nasdaq energy analyst Tamar Essner said she expects consolidation first among services companies, then perhaps among pipeline operators. Producers, she added, might try to consolidate acreage in important areas such as the Eagle Ford and Permian shale regions of Texas and the Bakken of North Dakota. Credit: By Erin Ailworth
Subject: Output; Petroleum production; Energy industry
Location: United States--US
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 9180: International; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Dec 1, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628856481
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628856481?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Rebounds, But Few See a Bottom; OPEC's Move to Stand Pat Signals Market Will Stay Oversupplied
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Halliburton Co. is in the process of buying rival oil-service company Baker Hughes Inc. Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work.
Full text: U.S. oil prices posted their biggest one-day gain in two years on Monday as traders locked in profits on bearish bets following last week's selloff. But many market watchers were skeptical that Monday's gains signaled that oil prices had reached their bottom, pointing to global supplies that continue to overwhelm demand. Oil prices tumbled to multiyear lows after the Organization of the Petroleum Exporting Countries decided on Thursday to maintain its production quotas, rather than agreeing to support prices by lowering its output target. The group's decision sent shock waves through financial markets that continued to be felt on Monday. Shares of some U.S. oil producers added to last week's declines, highlighting concerns about these companies' ability to operate expensive shale-oil fields amid plunging prices. Bonds of low-rated energy companies also sank, reflecting fears that some producers will default if prices fail to recover. Many investors and analysts believe with OPEC on the sidelines it will take cutbacks by companies in the U.S. and Canada to bring supply and demand in line and pull the market out of its swoon. That day may not come until deep into 2015 or beyond, some analysts say. "The era of $100 [a barrel] oil is over," Citigroup said in a note. "Oil prices appear to be falling rapidly to--if they haven't already reached--production costs." On Monday, light, sweet oil for January delivery shot up 4.3% to $69.00 a barrel from Friday's close, recovering from a more-than five-year low below $64 a barrel hit in overnight trading. It was the biggest one-day percentage gain for the U.S. benchmark since August 2012. Brent futures, the international benchmark, gained 3.4% to end at $72.54 a barrel. Investors said much of Monday's activity was driven by traders closing out profitable bets on falling prices or opening positions that would protect them should the market rebound. Both the U.S. benchmark and Brent slumped Thursday and Friday to fresh multiyear lows, posting two-day losses of about 10%. "Today's a little bit more of a rebound from Friday's plastering," rather than a long-lasting change in direction, said Kyle Cooper, analyst at IAF Advisors in Houston. "We got [to five-year lows] really quick, and it's not an entirely bad thing to take some profits." Roland Austrup, who manages $54 million as chief executive of Integrated Managed Futures Corp., said his funds posted 6% gains in November largely due to a bet that oil prices would fall. After last week's selloff, he kept his wagers on lower oil prices but used options to reduce losses in case prices rose. "Anytime you get a big significant move like this, it's prudent to hedge," Mr. Austrup said. "It certainly doesn't reflect a view that it's over...There's no impetus for prices to go up." Volatility in the oil market has caught out some funds. Brevan Howard Asset Management LLP plans to close its $630 million commodity hedge fund after the fund suffered heavy losses in energy markets in September, people familiar with the fund said Saturday. The slump in oil prices is pressuring energy companies, and analysts and bankers expect a string of deal-making as highly levered companies become attractive for acquisition. Halliburton Co. is in the process of buying rival oil-service company Baker Hughes Inc. Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. Weatherford said it expects to use proceeds from the deal, which is expected to close before the end of the year, to pay down debt. Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work. The national average price of retail gasoline was $2.77 a gallon Monday, down 50 cents from a year ago. Upcoming macroeconomic reports "will be looked at as a demand indicator and the energy market will adjust itself accordingly," Mr. Yawger said. But without action from OPEC, the market will remain oversupplied, said Barclays in a note. Barclays lowered its oil-price forecasts for this year and next after the OPEC meeting, as did BNP Paribas SA and Citigroup Inc. Barclays now expects Brent prices to average $72 a barrel next year, while BNP forecasts $77 a barrel and Citi has called for $80 a barrel. "It will have to endure a volatile adjustment period while non-OPEC supply, demand and even some OPEC producers adjust," analysts at Barclays said. January reformulated gasoline blendstock, or RBOB, rose 5.34 cents, or 2.9%, to $1.8810 a gallon. January diesel gained 5.12 cents, or 2.4%, to $2.2124 a gallon. Matt Wirz, Laurence Fletcher, Chiara Albanese and Michael Calia contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Profits; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: Lubrizol Corp; NAICS: 325199; Name: New York Mercantile Exchange; NAICS: 523210; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628872034
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628872034?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Weatherford to Sell Units to Berkshire Hathaway's Lubrizol; Oil-Field Services Company Selling Pair of Businesses for $750 Million
Author: Calia, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Weatherford, which has been mentioned as a potential takeover target, is shrinking at a time of falling oil prices, which have weighed on oil producers and oil-field services providers.
Full text: Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. The deal is valued at $750 million in cash, although that amount can climb another $75 million based on the company's performance after the transaction closes. Weatherford said it expects to use proceeds from the deal, which is expected to close before the end of the year, to pay down debt. The engineered-chemistry business produces chemical treatments for gas and oil production, as well as additives for drilling, stimulation and workover operations. The drilling-fluids business, Integrity, includes systems and additives for drilling operations. Oil-field services company Weatherford has sought to slim down its operations by shedding noncore businesses, racking up about $1.8 billion in cash proceeds this year, Weatherford Chief Executive Bernard J. Duroc-Danner said. Weatherford said it expects its debt will be between $6.6 billion and $6.8 billion at the end of the year. The company has sought to improve margins and lessen its debt load by laying off workers and cutting other costs, as well. Weatherford, which has been mentioned as a potential takeover target, is shrinking at a time of falling oil prices, which have weighed on oil producers and oil-field services providers. Weatherford's stock has declined 15% so far this year through Friday's close. Write to Michael Calia at Credit: By Michael Calia
Subject: Petroleum industry; Acquisitions & mergers; Debt restructuring; Petroleum production
Company / organization: Name: Lubrizol Corp; NAICS: 325199; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628886126
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628886126?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Ruble Hits New Low as Oil Prices Drop; Central Bank Intervention Helps Slow Volatile Trading
Author: Ostroukh, Andrey; Albanese, Chiara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Kseniya Yudaeva, first deputy chairwoman of the central bank, told a group of regional officials that a further drop in oil prices is highly probable, according to the Interfax news agency. [...]a fall in the ruble can actually ease pressure on the deficit.
Full text: MOSCOW--The ruble plunged to a record low against the dollar, its sharpest fall this year, following a recent dive in the price of oil, Russia's main source of foreign-currency revenue. The ruble declined as much as 6% in intraday trading on Monday, its worst daily drop since 1998, when the currency was devalued and Russia defaulted on its debt. The dollar climbed to almost 54 rubles in intraday trading, before falling back. Late Monday in New York, the dollar bought 51.116 rubles, compared with 50.274 rubles late Friday. Traders said the ruble's recovery seemed to be the result of intervention by the central bank, which doesn't disclose its activities in real time. The dollar has gained 55% against the ruble this year. Russia's benchmark RTS stock index dropped 1.6%, and the cost of insuring against a default on the country's debt jumped sharply Monday. "The ruble is a no-touch as long as oil prices go down. It is all about the oil, and the central bank's slow reaction, as they don't want to burn reserves too fast," said Viktor Szabo, a portfolio manager at Aberdeen Asset Management. One way for the central bank to support the ruble is by buying it, using its holdings of dollars and other currencies. "It's difficult to call the bottom with liquidity so thin, and the oil price continuing to slide," said Daniel Wood, a portfolio manager at Fischer Francis Trees & Watts in London. "Although the oil price is a contributing factor to the currency move, I think that negative sentiment toward Russia is helping to exacerbate the move to current levels." Oil prices plunged late last week, as the Organization of the Petroleum Exporting Countries said it would maintain its crude output despite a glut. On Monday, crude prices rebounded slightly. After spending $30 billion to slow the ruble's slide in October, the central bank said last month that it would allow the currency to float freely, intervening only if market moves posed a major threat to financial stability. Traders said Monday's action appeared to be the central bank's first sales of hard currencies since announcing the free float. The sales, which they said appeared to be moderate in size, quickly reversed the market, but weren't big enough to pull the Russian currency back into positive territory for the day. "The central bank isn't willing to fight external trends," said Egor Fedorov, an analyst at ING Bank in Moscow. "That is disappointing for a lot of people." Some major banks reported rising demand among customers for foreign exchange. "To say there is no panic among the population about the situation on the currency market wouldn't be quite accurate," said Alexei Yegorov, chief analyst at lender Promsvyazbank. Still, he added, "the majority of the economically active population has already converted some of its savings to foreign currency." Other Russians have no savings to speak of, he noted. With the sharp drop in the price of oil, Russia's largest export, central-bank officials have been preparing the population for more declines in the ruble. Kseniya Yudaeva, first deputy chairwoman of the central bank, told a group of regional officials that a further drop in oil prices is highly probable, according to the Interfax news agency. She said the central bank was planning for prices to fall as low as $60 a barrel and remain there for a prolonged period, a scenario that only recently had been considered extreme. Ms. Yudaeva said the central bank would intervene to support the ruble only "to prevent panic among the population." Economists said the central bank's seemingly low-key response to the ruble's plunge suggests the government has decided to let the currency handle the adjustment to the drop in oil prices. "We suspect that a weaker currency has actually become an important part of the government's strategy for dealing with lower oil prices, and in particular limiting the damage to the public finances," analysts at Capital Economics said in a note. A large share of Russia's government revenue is effectively pegged to the dollar, because it comes from dollar-denominated taxes on oil. The vast majority of spending is in rubles, however, and doesn't immediately adjust when the currency drops. As a result, a fall in the ruble can actually ease pressure on the deficit. With an exchange rate of 50 rubles per dollar and an oil price of $70 per barrel, the 2015 budget deficit would be at around 2.2% of gross domestic product. But with an exchange rate of 35 rubles per dollar, seen in early June, next year's deficit would be 5% of GDP, according to Capital Economics. Still, the sharp fluctuations in the rate have fueled inflation. Monday, Ms. Yudaeva of the central bank said the annual rate of price increases could rise to near 10% in the first quarter, the highest rate in years. "Such rapid fluctuations in the ruble are harmful for the economy. Companies are absolutely not happy about such swings. A 5% one-day change in the ruble rate is killing any financial planning," said Mr. Fedorov at ING. A poll released on Monday by the Public Opinion Foundation showed that 67% of Russians said in November that they think that the weaker ruble will have an impact on their daily lives. Only 53% of respondents thought so in October. VTB24, the retail arm of VTB, one of Russia's biggest lenders, said demand for foreign cash was above average late last week. Write to Andrey Ostroukh at Credit: By Andrey Ostroukh And Chiara Albanese
Subject: Central banks; Rubles; Population; Currency; Crude oil prices
Location: Russia
Company / organization: Name: Aberdeen Asset Management; NAICS: 523920; Name: Fischer Francis Trees & Watts; NAICS: 525110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628886331
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628886331?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC's War Won't Be All Over by Christmas; U.S. Oil Output Tends to Hold Up Despite Price Declines
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Oil's sudden slide will cause growth in U.S. oil output to slow, but stopping it altogether would take a protracted period of low prices, at least through the end of next year.
Full text: Like invasions of Russia and land battles in Asia, a war on U.S. shale promises to be a protracted and unpredictable campaign. Rising U.S. shale oil output is one target of Saudi Arabia's push to have OPEC members maintain their output and so . Even leaving aside OPEC's clutch of internal divisions, though, --with substantial attrition on the cartel's side. Part of OPEC's problem is that U.S. shale is a many-headed beast, with multiple resource basins and operators. So there isn't a single price below which production gets shut down. Rather, estimates of break-even prices in U.S. shale span a range: Citigroup, for one, estimates this to be around $70 to $90 a barrel using full-cycle costs. "Full-cycle costs" is the crucial phrase, as it incorporates big up front charges such as acquiring land. In core shale regions where land and infrastructure is already locked up, the cost to keep drilling could be as low as $40, Citi estimates. Benchmark U.S. crude now trades at about $68. Look at oil's last big collapse, from almost $150 to less than $40 a barrel between the summer of 2008 and early 2009 amid the financial crisis: The number of oil rigs operating in the U.S. dropped by more than half. Yet production, on a trailing 12-months basis, merely dipped from about 5.1 million barrels a day to 5 million--before starting the surge toward the current level of about 8.5 million. Similarly, while the U.S. rig count collapsed by 85% between 1981 and 1986, output didn't start falling sustainably until February 1986. In failing earlier to stop oil running up above $100 a barrel, OPEC let the shale genie out of the bottle. As Bob Brackett at Sanford C. Bernstein writes, a war on shale "simply postpones the date in which a well is drilled." Oil's sudden slide will cause growth in U.S. oil output to slow, but stopping it altogether would take a protracted period of low prices, at least through the end of next year. Even then, the techniques and discoveries already made would simply pass to another set of players--most likely oil majors scooping up distressed exploration and production firms. Meanwhile, those OPEC members living day to day, such as Venezuela, are likely to be the first big casualties of this war. Credit: By Liam Denning
Subject: Petroleum industry; Cartels
Location: United States--US Russia Asia Saudi Arabia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628968860
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628968860?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Europe Can Relax, a Little, About Falling Inflation; Declines in price spured by cheaper oil can help economies rebound.
Author: Heise, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
[...]perhaps most importantly, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. [...]those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them.
Full text: The fall in the prices of oil and various other commodities is set to push eurozone inflation further toward zero in the coming months. This is creating enormous political pressure on the European Central Bank to act, including mounting calls for further quantitative easing that would include purchases of sovereign bonds. The ECB itself has contributed to the expectation that it can and will bring inflation back to its close-to-2% benchmark soon. But such policies are not cost-free. They encourage risk taking among investors searching for yield, potentially leading to malinvestment. They affect the distribution of income and wealth between the less affluent, who are most affected by low returns on bank deposits, and the wealthier, who tend to benefit most from rising share prices. Finally, perhaps most importantly, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. The ECB should incur these economic costs only if there's a compelling reason to do so. Yet the current debate about deflation misses several key points, raising the prospect that the ECB could further distort the European economy to fight a "problem" that isn't so problematic after all. Falling inflation rates in the eurozone are only partly explained by weak demand during the past two years. The ECB should consider other important, and presumably temporary, factors. First, the fall in the prices of oil and other commodities since 2011 has directly translated into lower consumer-price inflation through lower prices for gasoline, other oil products, and food. Falling commodity prices also affect broader producer prices, as lower costs for energy and other inputs are passed through to sales prices in manufacturing and other sectors of the economy. In well-functioning markets, a prolonged downward trend in commodity prices, as we have seen, also lowers so-called core inflation, which excludes energy and unprocessed food. Second, those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them. Lower inflation or slight deflation in Greece, Ireland, Portugal and Spain are not a sign of damaging deflation. They are necessary to restore the purchasing power of people whose wages and incomes have declined and to improve these economies' competiveness on international markets. Once these countries recover, downward price pressures will disappear. It is difficult to quantify the impact these two developments have had on inflation. But assume that commodity prices in 2014 stayed at their average 2013 levels and that inflation in the eurozone's peripheral countries remained at 2%. The combined inflation impact of stable commodity prices and a lack of rebalancing in the periphery could easily be around 1%. In other words, inflation would today stand not at 0.4% but at 1.4%, far from the alleged dangers of deflation. The ECB also shouldn't be unduly concerned about low inflation expectations. Having declined somewhat in recent months, inflation expectations for the five-year horizon are currently somewhere between 0.7% (as indicated by bond prices) and 1.8% (as reported by surveys among forecasters). Inflation expectations among financial market participants do seem to be worryingly low. They are, however, also influenced by volatile oil and commodity prices. When oil prices drive down inflation, they also drive down inflationary expectations. There is a high correlation between actual inflation and inflationary expectations for the next two to five years. Inflationary expectations, in other words, are a dependent variable. These facts have several implications for the ECB. One is that central bankers should better manage market expectations by making it clear that changes in monetary policy can take two to five years to feed through into inflation. The ECB's tendency to overpromise has led to market demands that it deliver higher inflation faster, creating a needless challenge to the bank's credibility. Meanwhile, the ECB's inflation target needs recalibrating. Because the ECB has promised inflation of nearly 2%, it faces growing calls to deliver. It would be better to return to the stability definition the ECB used before a strategy change in 2003, which was to define price stability as inflation "below 2%." That would allow greater discretion in light of phenomena such as falling commodity prices. Central banks need room to maneuver in both directions. When commodity prices rose in 2011, eurozone inflation went up to 3%. The ECB, rightly, did not react by tightening significantly. If the ECB reverted to its previous, broader definition of price stability under present circumstances, it might create additional uncertainty, and markets might worry about the ECB's commitment to keep inflation above zero. But at least the ECB could be more explicit about which deviations from its close-to-2% target are worrisome and which are not only tolerable, but potentially positive for the economy. If oil and commodity prices continued to fall in 2015, the result could be an inflation rate below 0.5%. This would be no failure of the ECB but rather would help the recovery. It is the ECB's job to explain this. Otherwise, analysts and investors will continue to demand that it counteract falling commodity prices by launching a quantitative easing program. Mr. Heise is chief economist of Allianz SE. Credit: By Michael Heise
Subject: Inflation; Monetary policy; Central banks; Prices; Cost control; Eurozone
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1628978660
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1628978660?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Making 'The Moral Case for Fossil Fuels'; Renouncing oil and its byproducts would plunge civilization into a pre-industrial hell--a fact developing countries keenly realize.
Author: Philip Delves Broughton
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
Which would be worse: a hostile foreign regime using a sinister magnetic pulse to take down the entire electrical grid--or the chief executives of the world's major oil companies having a collective personal crisis about carbon emissions, shutting down their operations, and sending their employees to live the rest of their days off the grid in rural Vermont? In "The Moral Case for Fossil Fuels" the author, an energy advocate and founder of a for-profit think tank called the Center for Industrial Progress, suggests that if all you had to rely on were the good intentions of environmentalists, you would be soon plunged back into a pre-industrial hell.
Full text: Which would be worse: a hostile foreign regime using a sinister magnetic pulse to take down the entire electrical grid--or the chief executives of the world's major oil companies having a collective personal crisis about carbon emissions, shutting down their operations, and sending their employees to live the rest of their days off the grid in rural Vermont? Either way, the country goes dark. Transportation stops. Schools, hospitals and businesses close down. We are left to grow our own scrawny vegetables and slaughter our own animals for meat. We cannot even text. If you drive a car, or use modern medicine, or believe in man's right to economic progress, then according to Alex Epstein you should be grateful--more than grateful. In "The Moral Case for Fossil Fuels" the author, an energy advocate and founder of a for-profit think tank called the Center for Industrial Progress, suggests that if all you had to rely on were the good intentions of environmentalists, you would be soon plunged back into a pre-industrial hell. Life expectancy would plummet, climate-related deaths would soar, and the only way that Timberland and Whole Foods could ship their environmentally friendly clothing and food would be by mule. "Being forced to rely on solar, wind, and biofuels would be a horror beyond anything we can imagine," writes Mr. Epstein, "as a civilization that runs on cheap, plentiful, reliable energy would see its machines dead, its productivity destroyed, its resources disappearing." When you consider that most of us live what we would consider decent, moral lives, it seems extraordinary that anyone feels it necessary to write a book called "The Moral Case for Fossil Fuels." We use fossil fuels and their by-products in everything we do and rarely consider it a vice. A pang of conscience may strike us when we read of oil spills or melting icebergs. But not when we are sitting on a plastic chair, visiting a power-guzzling hospital or turning on our computers. To call fossil fuels "immoral" is to tarnish our entire civilization and should plunge us all into a permanent state of guilt, which seems a bit strong. Yet, as Mr. Epstein notes, this is precisely what so many vocal environmentalists do. James Hansen, one of the most prominent climate scientists, has called for oil-company CEOs to be "tried for high crimes against humanity and nature." Author and environmentalist Bill McKibben wrote in 2012 that "we need to view the fossil-fuel industry in a new light. It has become a rogue industry, reckless like no other force on Earth. It is Public Enemy Number One to the survival of our planetary civilization." But in demonizing fossil fuels, Mr. Epstein argues, environmentalists elevate the importance of preserving nature over the quality of human life. Our use of fossil fuels, Mr. Epstein says, correlates with dramatic increases in life expectancy and income, especially in the developing world. No other technology available to us today can meet the energy needs of everyone on the planet. The average American uses machine energy of 186,000 calories per day, equal to that produced by 93 physical laborers, and the vast majority of this is produced by fossil fuels. These fuels, Mr. Epstein writes, have turned us into "supermen" compared to our ancestors. "Mankind's use of fossil fuels is supremely virtuous--because human life is the standard of value, and because using fossil fuels transforms our environment to make it wonderful for human life." Mr. Epstein argues that our history with fossil fuels has been one of constant innovation and improvements in technology. Not only do we keep finding more sources of energy, nixing the predictions of those who say we are about to run out, but we find ever cleaner, more efficient ways to use it. Keep on this path and outcomes for humans and the environment are likely to be much better than if we veer off into an uncertain wind and solar future. Better for the polar bears, too. Mr. Epstein calls his philosophy "antipollution but pro-development," which seems positive terrain, though a more extreme ideology does peek out at times. (Quoting Ayn Rand's "Atlas Shrugged" is not a good idea if you are trying to pitch yourself as a moderate.) Mr. Epstein's book is, among other things, a full-throated defense of what is, after all, the American way of life. At the very least, it provides a useful thought experiment, creating a framework in which it is acceptable to do more than boo-hoo at the latest chunk of ice sliding off the Arctic Circle. The most frequently proposed solution to our melting ice caps, for instance, is to reduce global carbon emissions by heavily taxing carbon and investing more in renewable energy. But what might this mean for the recent boom in domestic energy, the abundant oil and gas now being extracted from shale deposits across America? The "shale gale" is driving domestic growth and transforming America's role in the Middle East and its balance of power with other energy giants, such as Russia and Iran. Should all this newfound economic and geopolitical muscle be abandoned in favor of solar power? Falling oil prices may yet temper the shale gale more effectively than any new environmental rules, but Mr. Epstein's defense of fossil fuels leads us to probe at the trade-offs we are willing to make--and to inquire whether other countries would as well. To argue for lower carbon emissions is usually to walk into a giant hypocrisy trap. How the Indonesians must have laughed when they were told to hold back on their fossil-fueled economic ascent by John "Five Homes" Kerry! By first accepting and then welcoming the role of fossil fuels in our lives, we can move on to a more interesting discussion about the balance between human welfare and our faith in--or distrust of--technology's evolution. Until then, Alex Epstein's moral defense of the means we choose to power our societies forward is a pointed, necessary and surprisingly little-heard one. Mr. Delves Broughton is the author, most recently, of "The Art of the Sale: Learning From the Masters About the Business of Life." Credit: By Philip Delves Broughton
Subject: Fossil fuels; Energy policy; Life expectancy; Civilization
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629021212
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629021212?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Search Bids for Talisman's Papua New Guinea Assets; Firm Offers More Than $300 Million for Talisman's PNG Assets
Author: Winning, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Dec 2014: n/a.
Abstract:
A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp. For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015.
Full text: SYDNEY--Oil Search Ltd. has bid more than $300 million to buy the Papua New Guinea assets of Talisman Energy Inc., in a move that could accelerate an expansion of the Pacific nation's flagship gas-export facility, people familiar with the matter said. Oil Search hopes to add Talisman's natural-gas reserves in the flat western region of Papua New Guinea to its own P'nyang discovery in the densely forested highlands area. A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp. For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015. Last month, the Calgary-based company grouped Papua New Guinea with the U.K. North Sea and Iraqi Kurdistan as assets where it was "actively pursuing exit or performance improvement." "There are no viable offers that we are considering at the moment," Grant Christie, general manager of Talisman's Australasian unit, told The Wall Street Journal on the sidelines of a conference in Sydney. Oil Search Chief Executive Peter Botten declined to comment on the recent bid. Papua New Guinea, a country better known for its jungles and tribal society, became the world's newest major energy exporter when the PNG LNG project shipped its first cargo to Asia in May. The project is one of several in the broader region including Australia which are expected to start up over the next three years and mark a shift in the global liquefied natural gas trade away from the Middle East. Write to David Winning at Credit: By David Winning
Subject: Petroleum industry; Energy policy; Natural gas; LNG
Location: Papua New Guinea
People: Winning, David
Company / organization: Name: Talisman Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 1, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629021264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629021264?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 201 7-11-21
Database: The Wall Street Journal
Lower Oil Prices Will Help Boost Global Economy, IMF's Lagarde Says; IMF Chief Expects Low Prices to Advance U.S. Economy to 3.5% Pace Next Year
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
WASHINGTON--International Monetary Fund chief Christine Lagarde on Monday said falling oil prices will help boost economies in the U.S. and across much of the globe, a net positive for a world struggling with slowing growth.
Full text: WASHINGTON--International Monetary Fund chief Christine Lagarde on Monday said falling oil prices will help boost economies in the U.S. and across much of the globe, a net positive for a world struggling with slowing growth. "It is good news for the global economy," Ms. Lagarde said at The Wall Street Journal CEO Council annual meeting. Oil prices tumbled to multiyear lows last week after the Organization of the Petroleum Exporting Countries its production quotas, rather than lowering its output target. Lower oil prices are good for most consumers, who pay less for gasoline, but could squeeze energy companies and the economies of some major producers like Russia and Venezuela. For the U.S., lower energy prices will help accelerate economic growth to a 3.5% pace next year, Ms. Lagarde said, up from an October forecast of 3.1%. The U.S. economy has been stuck at around 2% annual growth since the recession officially ended about 5½ years ago--gross domestic product expanded 2.2% in 2013 and 2.3% in 2012. While the U.S. appears to be a bright spot in the world, other nations are struggling. The eurozone still faces high unemployment, wary consumers and painfully weak economies among 18 member states. Japan slipped into recession in the third quarter. Emerging economies also have shown signs of trouble. China's gross domestic product grew by 7.3% in the third quarter from a year earlier, its slowest pace in more than five years, and India decelerated to 5.3% from 5.7% the prior quarter. Europe also is expected to benefit from lower oil prices, though the eurozone also faces a risk of the "new mediocre," Ms. Lagarde said, describing an economy marked by slow growth, low inflation and high unemployment. To break out, reluctant political leaders need to adopt more job-friendly labor market reforms, aggressive and innovative monetary policy and other structural reforms, she said. "Where they are at the moment they need to use all available tools," Ms. Lagarde said. "They have to get on with it and do it." Ms. Lagarde also took Japan to task for slow implementation of fiscal and labor market reforms. One key area for Japan: opening up its labor force to women and immigrants. "There is no slack in the Japanese economy, so when they do stimulus, when they put money into the construction business for instance, there is nobody to build," she said. Falling energy prices won't help everyone. "Winners and losers--exporters are taking a hit," she said. For Russia, lower prices are "adding to their fragility and their vulnerability," Ms. Lagarde said. Write to Jeffrey Sparshott at Credit: By Jeffrey Sparshott
Subject: Petroleum industry; Statistical data
Location: Russia United States--US Venezuela
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629026943
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629026943?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Search Bids for Talisman's Papua New Guinea Assets; Firm Offers More Than $300 Million for Talisman's PNG Assets
Author: Winning, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp. For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015.
Full text: SYDNEY--Oil Search Ltd. has bid more than $300 million to buy the Papua New Guinea assets of Talisman Energy Inc., in a move that could accelerate an expansion of the Pacific nation's flagship gas-export facility, people familiar with the matter said. Oil Search hopes to add Talisman's natural-gas reserves in the flat western region of Papua New Guinea to its own P'nyang discovery in the densely forested highlands area. A deal could help Oil Search secure enough gas to justify a new pipeline and processing unit at the $19 billion PNG LNG export plant operated by Exxon Mobil Corp. For Talisman, a deal would help it meet a goal of $2 billion in asset sales by mid-2015. Last month, the Calgary, Alberta-based company grouped Papua New Guinea with the U.K. North Sea and Iraqi Kurdistan as assets where it was "actively pursuing exit or performance improvement." "There are no viable offers that we are considering at the moment," Grant Christie, general manager of Talisman's Australasian unit, told The Wall Street Journal on the sidelines of a conference in Sydney. Oil Search Chief Executive Peter Botten declined to comment on the recent bid. Papua New Guinea, a country better known for its jungles and tribal society, became the world's newest major energy exporter when the PNG LNG project shipped its first cargo to Asia in May. The project is one of several in the broader region including Australia, which are expected to start up over the next three years and mark a shift in the global liquefied natural gas trade away from the Middle East. Work began on the PNG LNG project in 2010, when Asian gas users were looking to increase imports of fuels that burn more cleanly than coal, and international energy companies were struggling to gain access to resources not owned by foreign governments. The industry's landscape has changed dramatically since then--North American companies now are looking to export shale gas, and China this year signed a $400 billion deal to buy gas from Russia. Despite a recent sharp fall in crude-oil prices that is hurting returns on LNG projects, Oil Search is championing an expansion of PNG LNG by adding more processing units--each known as a "train." Prices of LNG are often linked to movements in crude futures, especially in Asia. In October, Oil Search talked up the prospects of a new train that would use gas from P'nyang and discoveries made by other energy companies nearby. The company said it needed two trillion cubic feet of proven gas reserves to justify building the so-called North Western Hub train, and it was looking to make a decision on construction by the end of 2016 and begin gas production as early as 2019. Other companies with gas discoveries in the western region of Papua New Guinea include Horizon Oil Ltd. and Kina Petroleum Ltd. Japan's Mitsubishi Corp. is also an investor, thanks to a $280 million deal to buy stakes in nine of Talisman's natural-gas blocks two years ago. In a speech to the conference on investment in Papua New Guinea's resources industry on Monday, the country's Prime Minister Peter O'Neill said he was also seeking progress on the development of gas discoveries considered to be stranded because they aren't connected to a pipeline or the PNG LNG plant. Talisman had once hoped to be heavily involved in that development. The company invested aggressively to expand its footprint with a view to aggregating several natural-gas discoveries, including the $177 million takeover of Rift Oil PLC in 2009. However, management became frustrated by repeated delays in the development of that gas and condensate, a type of light oil, Mr. Christie said. Write to David Winning at Credit: By David Winning
Subject: LNG; Natural gas reserves; Petroleum industry; Energy policy
Location: Asia Papua New Guinea
Company / organization: Name: Talisman Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629026944
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629026944?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Rebound, but Bears Still Abound
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Dec 2014: C.2.
Abstract:
Halliburton Co. is in the process of buying rival oil-service company Baker Hughes Inc. Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work.
Full text: U.S. oil prices posted their biggest one-day gain in two years on Monday as traders locked in profits on bearish bets following last week's selloff. But many market watchers were skeptical that Monday's gains signaled that oil prices had reached their bottom, pointing to global supplies that continue to overwhelm demand. Oil prices tumbled to multiyear lows after the Organization of the Petroleum Exporting Countries on Thursday said it would maintain its production quotas, rather than lower its output target to support prices. The group's decision sent shock waves through financial markets that continued to be felt on Monday. Shares of some U.S. oil producers added to last week's declines, highlighting concerns about these companies' ability to operate expensive shale-oil fields amid plunging prices. Bonds of low-rated energy companies also sank, reflecting fears that some producers will default if prices fail to recover. Many investors and analysts believe with OPEC on the sidelines, it will take cutbacks by companies in the U.S. and Canada to bring supply and demand in line and pull the market out of its swoon. That day may not come until deep into 2015 or beyond, some analysts say. "The era of $100 [a barrel] oil is over," Citigroup Inc. said in a note. "Oil prices appear to be falling rapidly to -- if they haven't already reached -- production costs." On Monday, light, sweet oil for January delivery shot up 4.3% to $69 a barrel from Friday's close, recovering from a more-than-five-year low below $64 a barrel hit in overnight trading. It was the biggest one-day percentage gain for the U.S. benchmark since August 2012. Brent futures, the international benchmark, gained 3.4% to end at $72.54 a barrel. Investors said much of Monday's activity was driven by traders closing out profitable bets on falling prices or opening positions that would protect them should the market rebound. Both the U.S. benchmark and Brent slumped Thursday and Friday to fresh multiyear lows, posting two-day losses of about 10%. "Today's a little bit more of a rebound from Friday's plastering," rather than a long-lasting change in direction, said Kyle Cooper, analyst at IAF Advisors in Houston. "We got [to five-year lows] really quick, and it's not an entirely bad thing to take some profits." Roland Austrup, who manages $54 million as chief executive of Integrated Managed Futures Corp., said his funds posted 6% gains in November, largely due to a bet that oil prices would fall. After last week's selloff, he kept his wagers on lower oil prices but used options to reduce losses in case prices rose. "Anytime you get a big significant move like this, it's prudent to hedge," Mr. Austrup said. "It certainly doesn't reflect a view that it's over. . . . There's no impetus for prices to go up." Volatility in the oil market has caught some funds off guard. Brevan Howard Asset Management LLP plans to close its $630 million commodity hedge fund after the fund suffered heavy losses in energy markets in September, people familiar with the fund said Saturday. The slump in oil prices is pressuring energy companies, and analysts and bankers expect a string of deal making as highly levered companies become attractive for acquisition. Halliburton Co. is in the process of buying rival oil-service company Baker Hughes Inc. Weatherford International PLC on Monday said it agreed to sell its engineered-chemistry and drilling-fluids businesses to an affiliate of Berkshire Hathaway Inc.'s Lubrizol unit. Weatherford said it expects to use proceeds from the deal, which is expected to close before the end of the year, to pay down debt. Some investors are looking for signs that slumping oil prices could spark higher demand, and U.S. employment data on Friday will be a key indicator, said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Higher employment can spur more gasoline demand, as more commuters drive to work. The national average price of retail gasoline was $2.77 a gallon Monday, down 50 cents from a year ago. Upcoming macroeconomic reports "will be looked at as a demand indicator and the energy market will adjust itself accordingly," Mr. Yawger said. But without action from OPEC, the market will remain oversupplied, said Barclays in a note. Barclays lowered its oil-price forecasts for this year and next after the OPEC meeting, as did BNP Paribas SA and Citigroup. Barclays now expects Brent prices to average $72 a barrel next year, while BNP forecasts $77 a barrel. Citi estimates $80 a barrel. "It will have to endure a volatile adjustment period while non-OPEC supply, demand and even some OPEC producers adjust," analysts at Barclays said. January reformulated gasoline blendstock, or RBOB, rose 5.34 cents, or 2.9%, to $1.8810 a gallon. January diesel gained 5.12 cents, or 2.4%, to $2.2124 a gallon. --- Matt Wirz, Laurence Fletcher, Chiara Albanese and Michael Calia contributed to this article.
Credit: By Nicole Friedman
Subject: Petroleum industry; Profits; Futures; Commodity prices; Crude oil
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.2
Publication year: 2014
Publication date: Dec 2, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629154869
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629154869?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with per mission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia Sees Economy in Recession Next Year; Sanctions, Falling Oil Prices Knocks Ruble to Record Low Against the Dollar
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Maxim Oreshkin, head of strategic planning department at the finance ministry, said the ruble will enjoy "favorable conditions" early next year thanks to better balance of payments as imports are set to shrink after the recent depreciation in the Russian currency.
Full text: MOSCOW--Russia's Economy Ministry warned that the country will slip into recession next year and the ruble will remain weak, in the government's strongest admission yet of the depth of the damage wrought by the drop in oil prices and . While many private and foreign economists have been warning of a contraction for weeks, the government had stuck to its forecasts that Russia would eke out slow growth next year. But the sharp drop in oil prices--which has knocked the ruble to a record low of 54 rubles to the dollar on Tuesday--has dashed remaining hopes. The latest forecast drew quick criticism from the Finance Ministry which called it 'too gloomy' and said it could be revised. A few hours after being published, the report disappeared from the Economy Ministry's website in a move a spokesman said was 'technical.' The Economy Ministry said Tuesday it sees the economy shrinking by 0.8% in 2015 compared with earlier expectations for recovery in economic growth to 1.2% from around 0.5% this year. A month ago the central bank called for zero growth next year. The new forecast comes as Russia is on track to post its weakest growth since the global financial crisis this year, pressured by the penalties imposed by western countries after Moscow's annexation of Crimea and its alleged in Eastern Ukraine. The Kremlin denies backing the rebels. Plunging oil prices are taking their toll too. The ruble tumbled to a record low against the dollar on Tuesday and is down nearly 40% year-to-date following below $70 a barrel from more than $100 in the summer. Oil and gas exports are Russia's main source of foreign-currency revenues. A contraction in GDP next year would be the first time the Russian economy has shrunk since 2009. "We changed our forecast from growth to recession about two months ago due to negative dynamics in investment and declining oil prices. Our forecast envisages a 1.5% contraction in the economy next year," said Vladimir Osakovsky, chief economist at the Bank of America Merrill Lynch in Moscow. "I think that Russia's economy is vulnerable to three sorts of crisis--structural, conjectural and geopolitical," said Deputy Economy Minister Alexei Vedev. The Economy Ministry said it had previously expected some respite in terms of external pressure on the Russian economy by mid-2015 but now it expects the Western sanctions to still be in place by 2016. The ministry lowered an average 2015 oil price forecast to $80 per barrel from $100 per barrel. Such a revision is expected to keep an average ruble rate in 2015 at 49 per dollar compared with earlier expectation of 37.7. The real effective ruble rate is expected to weaken by 13.5% next year. "The basic assessment is that the exchange rate will stabilize at least at current levels... There's a feeling that oil prices will recover to $85-$95 by the middle of next year," Mr. Vedev said. The Finance Ministry said that the Economy Ministry exaggerates downside risks to the ruble. Finance Minister Anton Siluanov said the dollar will be trading below 45 rubles next year if an oil price averages $80 per barrel. Maxim Oreshkin, head of strategic planning department at the finance ministry, said the ruble will enjoy "favorable conditions" early next year thanks to better balance of payments as imports are set to shrink after the recent depreciation in the Russian currency. But that requires a steady oil price, Mr. Oreshkin said, adding that the current ruble rate matches oil prices of significantly below $60 per barrel. The Economy Ministry also said Tuesday it increased assessment of 2014 net capital outflow to $125 billion from $100 billion and 2015 outflow to $90 billion from $50 billion. Again, the Finance Ministry said it doesn't agree and sees 2015 net outflow at between $60 billion and $80 billion. Capital investment is now seen contracting by 3.5% next year versus an earlier call for 2% growth. The economy ministry also lowered forecasts for households' wealth. It sees real disposable incomes contracting by 2.8% next year compared with previous expectations for 0.4% growth. In another sign of economic crisis, 2015 unemployment rate is now seen reaching 6.4% compared with previous forecast of 6.1%. Looking further, the Economy Ministry expects the GDP slump to reach the bottom in mid-2015. Mr. Oreshkin said the current economic deterioration was akin to 2009 and under an optimistic scenario the economy will rebound and grow by 2.5%-3% in 2016. Write to Andrey Ostroukh at Credit: By Andrey Ostroukh
Subject: Rubles; Recessions; International finance; Energy economics; Economic development; Economic conditions; Crude oil prices
Location: Russia
People: Putin, Vladimir Fico, Robert Merkel, Angela
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629272343
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272343?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Iraq and Kurdistan Agree on Oil Deal; Move Signals End to a Yearslong Political Impasse
Author: Bradley, Matt; Kent, Sarah; Adnan, Ghassan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
U.S. officials have pressed Iraqi Prime Minister Haider al-Abadi, a Shiite politician who took office in September, to build bridges to his country's Kurdish and Sunni population and buttress the war against Islamic State militants.
Full text: BAGHDAD--The Iraqi government agreed Tuesday to an oil export deal with the northern region of Kurdistan, signaling an end to a yearslong political impasse that has nearly bankrupted both governments and hobbled efforts to fight the Islamic State insurgency. The broad deal would allow Baghdad and Erbil, the capital of the Kurdish Regional Government or KRG, to mend broken relations that have put the defense of the country against Islamic State on shaky ground. The accord is also likely to further muffle voices in Iraqi Kurdistan that only six months ago had called for a referendum on the region's independence from Baghdad. "This agreement represents a victory for all Iraqis," said Masoud Haidar, a Kurdish member of the parliament in Baghdad. "There are no losers in this agreement. All are winners." Obama administration officials hailed the oil agreement Tuesday as a crucial advance in Baghdad's efforts to improve relations with Iraq's Kurdish minority. U.S. officials have pressed Iraqi Prime Minister Haider al-Abadi, a Shiite politician who took office in September, to build bridges to his country's Kurdish and Sunni population and buttress the war against Islamic State militants. The Kurdish security forces, the Peshmerga, are close ally of the Pentagon in the fight against Islamic State, which is also known as ISIS or ISIL. U.S. officials have also been working to ensure the KRG doesn't move forward with its threats to hold a referendum on independence. "This resolution, in line with its constitution, allows all Iraqis to benefit equitably from Iraq's hydrocarbon sector," said Marie Harf, a State Department spokeswoman. "This agreement will further strengthen both Iraq's federal government and the Kurdistan Regional Government as they work together to defeat ISIL." Under the new agreement, which comes into effect on Jan. 1, Kurdistan will export 250,000 barrels of oil a day and the disputed province of Kirkuk--now under Kurdish control--will export 300,000 barrels a day, said Abdel Qadr Mohammed, a Kurdish member of the Iraqi parliament's finance committee, who participated in the negotiations. Those exports will flow through Iraq's national oil company, the State Organization for Marketing of Oil, or SOMO, marking a win for Iraq's central government, which has long sought to exercise more control over Kurdish oil exports and revenue. In return, Tuesday's compromise would see the KRG keep 17% of Iraq's budget expenditure, nearly a year after Baghdad halted payments to the region in retaliation for its of Baghdad on the global market. That percentage, based on estimates of Kurds' share of Iraq's total population, reflects the fiscal arrangement laid out in the 2005 constitution. By hewing closely to those parameters, established under U.S. occupation, the agreement showed that Iraq's worst security crisis in recent memory has helped shift the country toward a renewed unity. "With the threat of ISIS bearing down on all of us, it was necessary for both sides to come to an agreement in any way," said Razaq al Haidari, a Shiite politician from the ruling State of Law bloc. Though the deal is largely about oil, observers agreed that concern over the insurgency made it possible. "This is an oil deal that is motivated by security conditions and the need for some sort of political unity against ISIS," said Ahmed Ali, a researcher for the Washington-based Institute for the Study of War. "At the end of the day, the realization on both side is that the ISIS threat is so great that a unified front is the major recipe to defeating it." The deal satisfies many of the Kurds' outstanding demands, giving them profits from what they consider their own oil, a greater say in how Iraq's oil industry is administered, and additional funding and recognition for their semiautonomous defense forces. The settlement also marks Baghdad's most formal step toward recognizing the disputed province of Kirkuk as a formal part of Kurdistan since Kurdish forces effectively seized the area during Islamic State's initial blitz in June. By positioning Kirkuk's oil as a part of Tuesday's agreement, Baghdad tacitly forfeited its control over Kirkuk's oil to Erbil. In addition to Baghdad according a portion of Iraq's budget to Kurdistan, the deal calls for the Iraqi defense ministry to give a direct monthly payment to Kurdish fighters, known as the Peshmerga, to train and arm them in their fight against Islamic State, said Kawa Mahmoud Mawloud, a Kurdish member of the oil and gas committee in parliament. Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad. The deal isn't a wholesale solution to Iraq's fractured national polity. Governance in Baghdad has long been paralyzed by divisions among Sunni Arabs, Shiite Arabs, Kurds and a many smaller religious and ethnic groups. But the agreement demonstrates the unifying potential of Mr. Abadi. With support from Washington, he assumed the premiership in September followed the eight-year rule of Nouri al-Maliki, whose leadership was marked by sectarian and ethnic discord, corruption and worsening security. Tuesday's deal had seemed almost impossible until last month. The long-simmering dispute came to a head early this year after Baghdad cut off budget payments to the KRG, which began exporting large volumes of oil for the first time via a pipeline to Turkey. Efforts by U.S. diplomats to broker a compromise fell apart amid mutual distrust, with both sides unable to agree on who should control the oil's marketing and revenue. Kurdistan-focused oil stocks have languished this year as the political tensions with Baghdad left the KRG struggling to meet its payment obligations and the Islamic insurgency buffeting the country threatened operational security. Oil markets saw the first glimmer of a deal three weeks ago, when Mr. Abadi and Kurdish delegates--supported by American and regional diplomats--agreed to an interim deal that saw Baghdad pay $500 million to the Kurds in exchange for 150,000 barrels a day of oil. The good-faith payments opened a floodgate of concessions, said Mr. Haidari, the Shiite lawmaker. Kurds dropped their demands for huge payments from Baghdad, while Baghdad stopped its requests to micromanage Kurdish contracts with foreign oil firms, he said. Shares in such as Genel Energy PLC and Gulf Keystone Petroleum Ltd. surged Tuesday on news of the deal and after the KRG made initial payments to some companies for oil exports. Though good news for Iraqi unity, the deal is likely to add to the downward tailspin in the oil market, with the additional barrels from Kirkuk set to augment the already ample supply on the market. Oil prices have amid sluggish demand growth and a boom in oil production in North America, but major oil producers in the Organization of the Petroleum Exporting Countries have shown little sign that they intend to pull back their own output to support prices. When OPEC met in Vienna last week the group decided to , sparking a rout in the oil market. Iraq, the group's second-largest producer after Saudi Arabia, imade it clear it wouldn't consider reducing its oil output, which remains below levels reached in the 1970s before Saddam Hussein came to power. Iraq's oil minister Adel Abdul-Mehdi told reporters in Vienna last week that Iraq is targeting production of around 3.8 million barrels a day next year, an increase of around 500,000 barrels a day compared with its production in October, according to the International Energy Agency. Oil exports from the Turkish port of Ceyhan via Iraqi Kurdistan have already reached over 350,000 barrels a day, according to Genel Energy, but the deal with Baghdad should boost that figure by 200,000 barrels a day come January. Jay Solomon contributed to this article. Write to Matt Bradley at Credit: By Matt Bradley, Sarah Kent and Ghassan Adnan
Subject: Kurds; Petroleum industry; Agreements; Politics; Rebellions
Location: Kirkuk Iraq United States--US Iraq
People: Harf, Marie al-Abadi, Haider
Company / organization: Name: Department of Defense; NAICS: 928110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629272401
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272401?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
European Markets Boosted by Energy Stocks; Oil Prices Ease After Monday's Late Rebound
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Germany's DAX index, which was hit particularly hard by a slowdown in global growth and fears that tensions with Russia would hurt German firms, briefly rose above 10,000 points on Tuesday, just short of the record level it reached in June, before dropping back to 0.2% lower on the day.
Full text: Energy stocks led European markets higher Tuesday, with investors eager to lock in profits after a brief pickup in oil prices during the previous session. Following a week of particularly heavy losses that saw the cost of Brent crude tumble by around 13%, prices recovered somewhat on Monday, and even though the rise proved short-lived, investors were quick to move. Shares in Afren PLC, Premier Oil and Tullow Oil PLC--some of the companies hardest hit by the recent commodity slump--ended the session up between 6% and 8.3%. Genel Energy PLC was the biggest winner on the Stoxx Europe 600, up 12.7%, that it had received a portion of the $24 million it is due for its share of oil sales from two fields in Kurdistan--breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports. "We have seen a capitulation of the energy sector in the last few days," said Christian Stocker, an equity strategist at UniCredit. "This move looks like short-term relief," he added. The European index of oil and gas companies advanced around 3.2% on the day, helping the all-sector index to a 0.5% gain, even though Brent crude was back on a downward trajectory. At the European equity market close, the commodity was trading around $71.53 per barrel, well above Monday's five-year low of $67.53 but still down more than 35% so far in 2014. Analysts at Barclays said they now expect Brent crude to settle below $70 because of last week's decision by the Organization of the Petroleum Exporting Countries to and other banks have struck a similarly downbeat note on the price. The outcome of the OPEC meeting is "unambiguously bearish for oil prices," Société Générale economists wrote in a note advising investors to generally stay away from oil and oil-related assets. Rabobank strategists described Monday's move in Brent as a "dead-cat bounce" adding: "It's highly unlikely that the market has suddenly discovered some new information to reverse its previous bearish bet on oil; as such, it would seem more likely that the rest of the week will see a return to the momentum we were seeing before that reversal." Currencies from economies particularly dependent on oil took yet another beating on Tuesday too. The Russian ruble against the U.S. dollar of above 54 per dollar, as did Nigeria's naira. The Canadian dollar and the Norwegian krone also took fresh knocks. "Our base case scenario is that oil will likely bottom out at $60 a barrel, a level at which we believe the ruble fairly valued at 55 against the dollar," said BCS economist Vladimir Tikhomirov. Beyond oil, however, markets were able to recover from Monday's fall, which came after some from the eurozone and China. Despite the latest signs that the region's economic recovery is sputtering, markets have clawed back nearly all their losses from a heavy third-quarter selloff. Germany's DAX index, which was hit particularly hard by a slowdown in global growth and fears that tensions with Russia would hurt German firms, briefly rose above 10,000 points on Tuesday, just short of the record level it reached in June, before dropping back to 0.3% lower on the day. A recent improvement in German business climate surveys has lured investors back to German stocks, while the country--which is a large energy importer--should be among Europe's chief beneficiaries of a lower oil price, according to Mr. Stocker. Investors are now looking ahead to Thursday's European Central Bank meeting. The recent drop in energy prices is a further drag on already low inflation, heaping pressure on the central bank to step up its easing efforts. "Eurozone inflation expectations have continued to collapse in the aftermath of last week's OPEC meeting," currency strategists at BNP Paribas said. Azad Zangana, senior European economist at Schroders, said that the oil slump was pushing "inflation to dangerously low levels." In currency markets, the euro was 0.7% lower against the dollar at $1.2387. Gold, meanwhile, fell 1.6% to $1,198.30 an ounce in late trade. The precious metal had a volatile session on Monday, falling after a proposal that would have forced their central bank to buy more gold, before rebounding sharply. Write to Tommy Stubbington at and Josie Cox at Credit: By Tommy Stubbington and Josie Cox
Subject: Central banks; Petroleum industry; Stock exchanges; Investments; Crude oil prices; Eurozone
Location: United States--US
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629272469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629272469?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norway Considers Investing Oil Fund in Infrastructure; It Would Be First Expansion in Fund's Asset Classes Since 2010
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
The fund had invested only 1.3% of its value in real estate by the end of the third quarter, mainly in high-end office buildings in Europe and the U.S. It plans to buy property assets amounting to 1% of its value, or about $8.7 billion, in each of the coming two years, and will expand its workforce to 600 from less than 400, mainly to manage the real estate portfolio.
Full text: OSLO--Norway is assessing whether to allow its sovereign-wealth fund to invest in unlisted infrastructure, potentially including railways, pipelines and power plants, a move that would expand its asset universe from stocks, bonds and real estate. The country's Ministry of Finance, which oversees the $870 billion fund, said it would ask an expert group, the Strategy Council, to make an assessment of allowing infrastructure investments. It would be the first expansion of the fund's asset classes since a 2010 decision to allow it to invest up to 5% of its value in real estate. "By further developing the fund's investment strategy so that we spread investments in the best way possible, we contribute to good, long-term management of the fund," Minister of Finance Siv Jensen said. The Strategy Council will also be asked to assess whether the real estate limit of 5% should be increased. The fund had invested only 1.3% of its value in real estate by the end of the third quarter, mainly in high-end office buildings in Europe and the U.S. It plans to buy property assets amounting to 1% of its value, or about $8.7 billion, in each of the coming two years, and will expand its workforce to 600 from less than 400, mainly to manage the real estate portfolio. At the end of the third quarter, the bulk of the fund, 61.4%, and the remainder, 37.3%, in bonds. Norway's oil fund is the world's biggest sovereign-wealth fund and its investment strategy is closely watched by investors. The strategy has been developed gradually, and "this will also be the case for the assessment of whether it should be opened for investment in infrastructure," the Ministry of Finance said. Norway's central bank, which manages the fund via its Norges Bank Investment Management arm, will also be asked for advice. The central bank has previously asked the government to allow the fund to expand into infrastructure. Infrastructure investments will be addressed in the annual white paper about the sovereign-wealth fund next spring, and the recommendations from the Strategy Council will be addressed in the 2016 white paper, the government said. The time frame indicates the Norwegian Parliament could make a final decision in the summer of 2016. If the fund is allowed to invest in unlisted infrastructure, this could mean investments in emerging markets, with the potential risks of less protection of investors' rights and a lack of transparency. If it does move into such assets, the fund must balance risks and returns as with any other investment, the ministry said. The Norwegian sovereign-wealth fund was set up in the 1990s to save the country's oil revenues, and is set to grow to 7.53 trillion Norwegian kroner ($1.08 trillion) by 2020. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Owner operator; Investment policy; Infrastructure; Councils
Location: Norway
Company / organization: Name: Norges Bank Investment Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629272515
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Resume Skid as Supplies Weigh on Market; Iraq Government Agrees on Kurdistan Oil Deal
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices.
Full text: Oil prices erased much of Monday's gains as an agreement between Iraq and the Kurdish regional government portends more supplies for a global market already brimming with crude. Light, sweet crude for January delivery, the front-month contract, fell $2.12, or 3.1%, to $66.88 a barrel on the New York Mercantile Exchange on Tuesday. Brent crude, the global benchmark, fell $2, or 2.8%, to $70.54 a barrel on the ICE Futures Europe exchange. Iraq and semiautonomous Kurds in the northern region of the country have been locked in a yearslong feud over sharing revenue from oil production, culminating with the Kurdish regional government exporting several cargoes independently of Baghdad this year through a pipeline to Turkey. But Iraqi media and a Kurdish lawmaker said Tuesday that . The agreement, which would take effect Jan. 1, allows Kurdistan to export 250,000 barrels a day, while the disputed region of Kirkuk would sell 300,000 barrels a day through Iraq's national oil company. In exchange, the Kurdish region would receive 17% of Iraq's national budget, and the defense ministry would provide direct financing to Kurdish fighters for training and arms. Andrew Lebow, a trader for investment bank Jefferies, said the oil market appeared to give credence to the agreement. "The market may be taking this one more seriously than others," Mr. Lebow said. "This could result in more supply on the market, which is the last thing we need." The news added to the already-bearish conditions in the oil market. The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices. Meanwhile, traders appeared eager to take profits from Monday's run-up, when U.S. oil prices gained 4.3% in the absence of any bullish fundamental developments in the market. "We don't really have a fresh compelling fundamental story here," said Tim Evans, an analyst at Citigroup. "It's more a question of where does the price belong given the fundamentals we already know." Those fundamentals look set to turn even more bearish in coming months, with analysts and traders saying a period of moderately priced oil is likely to prevail as a new normal for some time. London-based research consultant Energy Aspects said in a note that global surpluses will increase through the first half of 2015 as output rises and demand for OPEC crude falls. In the U.S., analysts project a 600,000-barrel increase in crude stockpiles when weekly data are released by the Energy Information Administration on Wednesday. The U.S. has 383 million barrels of crude in storage, above average for this time of year. In its own inventory survey, the industry trade group American Petroleum Institute said crude stockpiles fell 6.5 million barrels in the week ended Nov. 28, while gasoline stocks were flat, distillate stocks rose 2.5 million barrels and refinery runs rose 1.9 percentage points to 93% of capacity, according to a posting by Platts Oil on Twitter. Tuesday's selloff carried over into other oil-related markets, with gasoline for January delivery falling 6.94 cents, or 3.7%, to $1.8116 a gallon, the lowest settlement price in more than five years. January diesel settled at its lowest level in more than four years, losing 5.8 cents, or 2.6%, to close at $2.1544 a gallon. Matt Bradley and Ghassan Adnan contributed to this article. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Petroleum industry; Kurds; Agreements; Crude oil prices; Petroleum production
Location: United States--US Iraq
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629281241
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629281241?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tony Hayward's Genel Gets Kurdish Oil Payment; Move Breaks Impasse on Payments Amid Political Wrangling
Author: MacDonald, Alex
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
LONDON--Genel Energy PLC, the British oil explorer led by former BP PLC Chief Executive Tony Hayward, said it received a portion of the $24 million it is due for its share of oil sales from two fields in Kurdistan--breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports.
Full text: LONDON--Genel Energy PLC, the British oil explorer led by former BP PLC Chief Executive Tony Hayward, said it received a portion of the $24 million it is due for its share of oil sales from two fields in Kurdistan--breaking an impasse on payments amid political wrangling between Kurdistan and Iraq over oil exports. Mr. Hayward serves as chief executive of Genel, a company that has , including drilling in Kurdistan, a semiautonomous enclave in Iraq's north. The company's shares have suffered in recent months, amid uncertainty about whether it and its partners would be able to monetize its investment in Kurdistan. Officials in Kurdistan have been locked in a standoff with the central government in Baghdad over how Kurdistan can sell its oil. Recent geopolitical turmoil, including the rise of Islamic State militants operating close to the Kurdish border, weighed further on sentiment. In early trading Tuesday, Genel shares were up more than 7% in London. Separately Tuesday, Iraq's central government in Baghdad said it had agreed to an with the Kurdistan Regional Government. The deal with Baghdad is likely to help smooth the way for future payments to oil firms operating there. The KRG said at the start of November that it would make an initial payment of $75 million to companies operating in the region, as revenue from exports since January reached $2.87 billion. Earlier this year, the KRG started , often running up against political opposition from Baghdad. In a statement, Genel said partners in the Taq Taq field received gross payments of $30 million. It also said partners in the Tawke oil field would receive another $30 million. Genel's total share of both payments comes to $24 million, it said. Oil exports by pipeline from the Kurdistan region of Iraq through Turkey continue to grow and recently exceeded 350,000 barrel of oil a day, Genel said. On Monday, Gulf Keystone Petroleum Ltd. said it received an initial $15 million payment from the KRG for crude oil exports from the Shaikan oilfield in Kurdistan. "Gulf Keystone now looks forward to the establishment of a pattern of regular payments for export crude sales. In the meantime, the company continues to adopt a prudent approach to capital expenditure," Gulf Keystone said. Write to Alex MacDonald at Credit: By Alex MacDonald
Subject: Petroleum industry; Exports
Location: Baghdad Iraq Kurdistan Iraq
People: Hayward, Tony
Company / organization: Name: Gulf Keystone Petroleum Ltd; NAICS: 211111; Name: Genel Energy PLC; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629299023
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629299023?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Slide Means Credit Could Take a Slip; Cheap Oil Raises Possibility of More Defaults in U.S. Oil Sector
Author: Barley, Richard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Investors in mutual and exchange-traded funds may also pose a risk if they pull cash from the market in the wake of the sharp drop in oil; corporate bond liquidity is poor, potentially amplifying swings in prices.
Full text: Oil normally acts as a lubricant. But feeding into the U.S. corporate bond market is instead causing some grinding of gears. Default risk is rearing its head. That is a challenge for investors. Ultra-loose monetary policy has helped suppress defaults, as companies have had easy access to cheap refinancing. Global default rates hit 13.9% in 2009, but rapidly declined and have remained low since 2010: the 12-month trailing default rate in October was just 2.3%, with the one-year forecast at 2.4%, according to Moody's. Many investors have taken comfort from the idea that there has been little on the horizon to cause defaults to rise. The decline in the oil price challenges that assumption, however. Energy bonds account for some 15% of Barclays' $1.3 trillion U.S. high-yield bond index, and are clearly pricing in higher default risk. In the second half of the year, : while the overall high-yield index is up 3.3% year-to-date, energy bonds are down 5.1%. Within that, oil-field services companies' bonds have suffered the most, and are now yielding more than 10%. The spread between energy bonds and haven U.S. Treasurys has widened by 3.2 percentage points since June 30 to reach 6.5 percentage points, a massive move. The key question is whether oil falls further from here, and for how long. West Texas Intermediate crude has already fallen 30% this year to around $68 a barrel. If the price fell to $65 a barrel, that could cause real worries: JPMorgan Chase calculates that the cumulative energy-sector default rate through 2017 could reach 40% if that price is sustained for that time and companies take no remedial action. Defaults would take time to pick up, with 2016 and 2017 more risky than 2015. The path of the oil price over the next year is vital, therefore, to medium-term default prospects. That said, it doesn't take actual defaults to change market sentiment. The problems faced in the oil sector mark the first real fundamental blow to credit quality outside the financial sector in the past few years. Were another problem to emerge elsewhere, the market might start to reassess the default outlook more seriously. Investors in mutual and exchange-traded funds may also pose a risk if they pull cash from the market in the wake of the sharp drop in oil; corporate bond liquidity is poor, potentially amplifying swings in prices. Ultimately, the sharp swings in energy bond prices are a reminder that monetary policy has its limits. The U.S. Federal Reserve can do a lot to ease corporate credit conditions, but it cannot deal with fundamental shocks to a sector or industry. Investors will need to drill deeper into company balance sheets if they want to avoid slip-ups. Write to Richard Barley at Credit: By Richard Barley
Subject: Bond markets; Default; Bond issues
Location: United States--US
Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629299172
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629299172?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Renewed Slide in Oil Price Hits Russian Ruble Again; Finance Minister Anton Siluanov Says Ruble Is Now Too Cheap
Author: Ostroukh, Andrey; Albanese, Chiara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
"According to finance ministry estimates, the current [ruble] rate matches an oil price of substantially below $60 per barrel.
Full text: The ruble suffered its second consecutive day of heavy losses on Tuesday, hitting a new record low when the dollar poked above 54 against the limping currency despite assurances from Russia's finance minister that the selloff has run too far. The ruble sank to 54.11, dropping by about 5.5% on the day. The move mirrored the ruble's 6% drop Monday, the worst session since the 1998 financial crisis, with the currency hit by the recent slump in oil prices, which will pinch Russia's commodity-dependent budget. There was no sign of intervention by the central bank to try and slow the tide Tuesday, but official dollar selling was reported by traders earlier in the week. The central bank does not comment on interventions and is set to publish data on Monday's activity early Wednesday. "It is quite unnerving that the central bank does not comment on interventions. If they had said they intervened yesterday, the impact would have been bigger. The market has doubts that it was the central bank that intervened yesterday, which creates additional pressure on the ruble," said Sergei Romanchuk, chief trader at Metallinvestbank in Moscow. Earlier Tuesday, Finance Minister Anton Siluanov told reporters that the ruble is undervalued. "According to finance ministry estimates, the current [ruble] rate matches an oil price of substantially below $60 per barrel. With oil at $80 per barrel an equilibrium [dollar] rate will be below 45 rubles in 2015," Mr. Siluanov said. Brent crude was recently trading at $71.64 per barrel, down 1.3% on the day. The combined effect of lower oil prices, imposed against Russia are cranking up the pressure. "I find it hard to see the ruble going stronger without an attendant move up in oil prices," said Ivan Tchakarov, Russia economist at Citigroup. Adding to the pressure, this month Russian banks and companies will have to pay back around $30 billion in foreign debt, increasing the domestic demand for dollars. Furthermore, Russia's it now sees gross domestic product shrinking by 0.8% in 2015 compared with earlier expectations for recovery in economic growth to 1.2% from around 0.5% this year. The gloomy forecast comes as Russia is on track to post its weakest growth this year since the global financial crisis. Looking ahead, the market will be closely watching President Vladimir Putin's annual state of the nation address on Thursday for his assessment of the foreign exchange situation and the Ukraine crisis. Still, analysts foresee a continuation in the currency slide. "Our base case scenario is that oil will likely bottom out at $60 a barrel, a level at which we believe the ruble fairly valued at 55 against the dollar," said BCS economist Vladimir Tikhomirov. The ruble is the second worst performing currency this year, after Ukraine's hryvnia, having underperformed other oil currencies such as the Nigerian naira. Ben Edwards contributed to this article. Write to Andrey Ostroukh at and Chiara Albanese at Credit: By Andrey Ostroukh and Chiara Albanese
Subject: Rubles; International finance; Central banks; Prices; Energy economics; Economic crisis; Currency; Economic growth; Gross Domestic Product--GDP
Location: Russia
People: Putin, Vladimir
Company / organization: Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629315262
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629315262?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproducti on or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Rise; Dow Ends at Record; Energy Shares Advance, as Oil Prices Resume Drop
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Beyond that, investors were buying shares of companies expected to withstand the oil-price drop, said Brian Fenske, head of sales trading at New York-based brokerage firm ITG. On Monday, stocks fell after weaker-than-expected reports on international manufacturing and disappointing Black Friday weekend retail sales in the U.S. Many investors have been surprised by the more-than-30% slide in oil prices this year, which accelerated after the Organization of the Petroleum Exporting Countries decided last week to maintain current output levels.
Full text: A rise in energy shares helped propel the Dow Jones Industrial Average to a record high Tuesday, as oil prices resumed their decline. The Dow gained 102.75 points, or 0.6%, to 17879.55. The average also hit a new intraday high of 17897.05 during the session. Its gains were broad, with 21 of 30 components higher. Chevron Corp. and Exxon Mobil were the best performers, contributing a total 27 points to the advance. Chevron gained $2.29, or 2.1%, to $114.02 and Exxon rose $1.84, or 2%, to $94.19. The S&P 500 index gained 13.11 points, or 0.6%, to 2066.55, closing 0.3% below its all-time high. The Nasdaq Composite Index rose 28.46 points, or 0.6%, to 4755.81. The energy sector rebounded from recent steep losses and was the best performer in the S&P 500. Investors have been trying to determine the outlook for the sector, amid a slump in crude-oil prices. Even with Tuesday's 1.3% gain, the sector has lost 7% in the past month. Traders said investors were unwinding bearish bets on the energy sector, which helped drive the stocks higher. Beyond that, investors were buying shares of companies expected to withstand the oil-price drop, said Brian Fenske, head of sales trading at New York-based brokerage firm ITG. Large-cap energy stocks, which are considered to be more insulated against oil-price volatility, outperformed their smaller brethren. Small-cap energy companies fell 0.4% Tuesday and are down 23% over the past month. "A lot of people are wondering whether it's a buying opportunity," said Mr. Fenske. "You have to be cautious about it, but [the rise] is good to see." European energy stocks also rose, fueling a 0.5% advance in the Stoxx Europe 600. The gains came as commodity prices continued to drop. Crude oil fell 3.1% to $66.88 a barrel, while Brent crude, the global benchmark, fell 2.8% to $70.54 a barrel. Gold futures declined 1.5% to settle at $1199.50 an ounce. Broadly, traders said there was no specific news driving U.S. markets higher. Trading has been choppy in recent sessions. On Monday, stocks fell after weaker-than-expected reports on international manufacturing and disappointing Black Friday weekend retail sales in the U.S. Many investors have been surprised by the more-than-30% slide in oil prices this year, which accelerated after the Organization of the Petroleum Exporting Countries decided last week to maintain current output levels. Lower oil prices have hit energy stocks across the globe and added downward pressure on already-low inflation in Europe. Strategists say falling oil and gasoline prices should boost corporate earnings in the U.S., since they lead to lower costs for companies and more disposable income for consumers. But some investors are concerned about the impact of falling oil prices on areas that depend on the energy industry for economic growth. "In theory, everybody agrees that lower gas prices are good...and I think that [idea] wins out," said Patrick Kaser, who manages more than $6 billion of large-cap stocks for Brandywine Global Investment Management. "But it's not as open-and-shut as it was when we were producing less oil." In Asia, the Shanghai Composite Index jumped to close at its highest level since July 2011. Treasury prices fell, pushing up the yield on the 10-year note to 2.285%. In economic news, construction spending rose 1.1% in October, above forecasts for 0.6%. Labor-market data for November will come into focus later in the week, with Wednesday's release of private-sector employment and Friday's nonfarm-payrolls report. In corporate news, Avanir Pharmaceuticals Inc. jumped $1.92, or 13%, to $16.92 after agreeing to be purchased by Japanese drug maker Otsuka Pharmaceutical Co. for $17 a share in cash. The at $3.5 billion and is expected to close in the first quarter of 2015. Medical-device maker Medtronic Inc. gained 46 cents, or 0.6%, to $74.33 after completing the largest corporate-debt sale of the year on Monday, raising $17 billion. The debt sale will help the company to finance its acquisition of Ireland's Covidien PLC. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Petroleum industry; Energy industry; Stock prices; Construction spending; Dow Jones averages; Large cap investments
Location: United States--US China Europe Asia
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629338142
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629338142?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nigeria's Tumbling Currency a Victim of Falling Oil Prices; Highly Oil Dependent Economy Feeling the Pinch
Author: McGroarty, Patrick; Hinshaw, Drew; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
[...]the current budget of nearly $30 billion is hardly $1 billion leaner than last year's, but the decline in oil prices has choked revenue. The 12-member Organization of the Petroleum Exporting Countries, who collectively pump more than a third of the world's oil, agreed last week to maintain a target of producing 30 million barrels a day.
Full text: Nigeria's currency tumbled to a record low on Tuesday, hammered by falling oil prices that have weighed on Africa's top economy as it heads toward an election. Nigeria overestimated oil prices this year by a wide margin--and is now suffering. Economists fear weak oil prices may prevent Africa's most populous nation from hitting the 7% growth the International Monetary Fund has forecast for this year. "We're a substantial way from the economy even starting to think about being able to recover," said Nitesh Shah, an analyst at ETF Securities in London. "The government's options are limited." Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the IMF. As Brent crude prices have slipped 40% since June, to $68 a barrel, the wheels have begun to come off Nigeria's economy. Nigeria, whose economy surpassed South Africa in April as the continent's largest, has striven to generate revenue beyond oil. Recent years saw promising growth in booming telecommunications, banks, hotels and other service businesses. But to sustain that growth, businesses say they need bigger ports, more highways and fewer blackouts that crimp factory production and curb tax revenue. A weaker naira will make it more expensive to build that infrastructure. The naira slumped to 186.9 to the U.S. dollar, traders said, extending a slide that has shaved more than 10% off its value this year. Many African countries are paying the price for counting on one commodity to drive their economies. Growth has stalled in oil-rich Angola. Falling copper prices have dented growth in Zambia. Lower iron-ore prices were hurting Guinea, Liberia and Sierra Leone even before the Ebola epidemic made things far worse. President Goodluck Jonathan, standing for re-election, has come under pressure to avoid unpopular spending cuts. As a result, the current budget of nearly $30 billion is hardly $1 billion leaner than last year's, but the decline in oil prices has choked revenue. In October, Nigeria--which spends a fifth of its budget on its military--borrowed an additional $1 billion to buy helicopters, fighter jets and other equipment to combat Islamist militants. On Tuesday, the insurgency Boko Haram bombed a market in one city and raided police barracks in another. In November, the government submitted a revised budget that proposes spending cuts based on a new average oil price of $73 a barrel. But even that price could be "overly optimistic," warned the central bank governor, Godwin Emefiele. Nigeria isn't the only big oil producer with a wilting currency. Russia's ruble has shed nearly half of its value against the dollar since May. Norway's krone has dropped 17% since then, and the Canadian dollar is down 5%. But Nigeria is particularly vulnerable. Unlike its peers, it didn't save while oil prices were high. A public fund that contained $20 billion in oil proceeds when crude prices first surged past $100 a barrel in 2008 had shrunk to $4 billion as of November. "We get used to high oil prices and assume it's going to be there forever," said Ken Iwelumo, a former investment banker who now farms catfish in Nigeria. Economists say oil prices could stay low for months. The 12-member Organization of the Petroleum Exporting Countries, who collectively pump more than a third of the world's oil, agreed last week to maintain a target of producing 30 million barrels a day. Meanwhile, the country's power-privatization program has hit snags. Investors say they can't improve supply until the government invests $1.5 billion a year to replace a rusted-out grid of power lines. Nigeria's All-Shares Index fell 1.8% on Tuesday, extending a drop of almost 18% this year. In November, Nigeria's central bank tried to support the naira by limiting sales of the U.S. dollar. When the naira continued to drop, the central bank bought the Nigerian currency to pump up demand, traders say. The bank's foreign-exchange reserves shrank by $2 billion and the selloff continued. Last week, the central bank raised its benchmark interest rate by one percentage point to a record 13%. It also lowered the naira's target trading band to around 168 against the dollar from 155 previously. The naira is still trading outside that target. Fresh dollar sales by the central bank did little to stop its slide, traders say. "Things are happening too quickly, too suddenly, too sharply for the average Nigerian or even analysts to process," said Bizmark Rewane, managing director of Lagos-based Financial Derivatives Co. "We do not know what will happen." Write to Patrick McGroarty at , Drew Hinshaw at and Josie Cox at Credit: By Patrick McGroarty, Drew Hinshaw and Josie Cox
Subject: Budgets; Petroleum industry; Crude oil prices; State elections
Location: Africa Nigeria
People: Jonathan, Goodluck
Company / organization: Name: ETF Securities Ltd; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629396508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629396508?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Ecuador to Top 2014 Oil Output Target, Official Says; Minister Expects Production 3% Above Initial Estimate
Author: Alvaro, Mercedes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
According to the central bank, Ecuador's average oil output rose 7% to 555,000 barrels a day between January and September, from 520,000 barrels a day a year earlier.
Full text: QUITO--Ecuador expects to surpass by about 3% its initial oil production target set for 2014, reaching an average of 560,000 barrels a day, a high-level government official said. "Our goal for production in 2014 was an average of 545,000 barrels a day, but we will produce about 560,000 barrels a day," Minister of Non Renewable Natural Resources Pedro Merizalde said in an interview. According to the central bank, Ecuador's average oil output rose 7% to 555,000 barrels a day between January and September, from 520,000 barrels a day a year earlier. State-run companies Petroamazonas and Rio Napo accounted for 76% of Ecuador's crude oil production in the period. For next year, the Andean country expects to reach an output of 566,000 barrels a day, before jumping to about 700,000 barrels a day in 2019, when oil block 43, also known as ITT, will be producing oil. Last year President Rafael Correa warned that the economy could collapse by 2020 if new oil reserves aren't discovered. Mr. Merizalde said that with the support of Canada, Ecuador plans to conduct satellite exploration works in the southeast of the country to identify signs of oil or gas. "During a six-month period, we will try to map evidence of oil or gas in 17 blocks and according to the results we could think of calling a new licensing round," said Mr. Merizalde. Last year, Ecuador received just three bids in the country's 11th oil-licensing round, which was seeking private investments to explore about 2.6 million hectares in 13 concessions located in the southeastern Amazon region, near the border with Peru. Mr. Merizalde said that the lack of interest from private companies was mainly due to the lack of information about the blocks, but analysts say the country doesn't offer conditions good enough to attract risk investment for the oil sector. Write to Mercedes Alvaro at mercedes.alvaro@wsj.com -0- Credit: By Mercedes Alvaro
Subject: Petroleum industry; Petroleum production
Location: Ecuador
People: Correa, Rafael
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Languageof publication: English
Document type: News
ProQuest document ID: 1629450158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450158?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nearly 3,000 Canadian Railroad Cars No Longer Transport Oil, Chemicals; Canada's Transport Department Finds Cars Too Risky for Dangerous Goods After 2013 Derailment
Author: Vieira, Paul; George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract: None available.
Full text: Nearly 3,000 Canadian railroad tank cars are no longer carrying after falling foul of the beefed-up safety regulations that followed last year's fatal derailment in Quebec. Canada's Transport Department said 2,879 tank cars were deemed too risky to carry goods such as oil and chemicals in the country, according to documents presented in Parliament last week. , Canada gave rail operators 30 days to stop using the least crash resistant types of DOT-111 tanks cars to transport such goods. Those DOT-111s still transporting dangerous goods have to be refitted with thicker steel and stronger reinforcements within a three-year period, or else be pulled off the rails. The DOT-111 was the type of railcar carrying crude oil from North Dakota's Bakken region when in the Quebec town of Lac-Mégantic in July 2013, triggering an explosion and fire that killed 47 people. The Canadian government said in April that around 5,000 higher-risk DOT-111s, which aren't reinforcement at their bottoms were operating in North America. Last week's documents indicate how many of these tank cars were carrying dangerous goods, such as highly-volatile crude oil, in Canada. "The phase out is now complete," said the documents, prepared by the Transport Department. In July, U.S. authorities proposed the phase out of older DOT-111s within a two-year period. U.S. trade organizations, the Association of American Railroads and the American Short Line and Regional Railroad Association, have said there are 228,000 general-purpose DOT-111s in service in the U.S. The AAR has proposed a measure to remove 78,000 older tank cars that don't meet federal regulations to move hazardous materials. The Canadian documents don't say who owned the higher-risk railcars or how many DOT-111s are still in service. Canada's Transport Department didn't respond to requests for comment. A representative for Canada's main railroad lobby, the Railway Association for Canada, said railroad customers own or lease most DOT-111s in service in North America, but didn't have specifics on the nearly 3,000 pulled from service. He added Canada's railroads have worked with officials in Ottawa to bolster rail safety. An estimated 1.6 million barrels of crude oil a day are shipped via railroads in the U.S., or close to 20% of the total pumped in the country. Meanwhile, in Canada, the amount of crude moved by rail has quadrupled since 2012, and is forecast to more than triple between now and 2016. On both sides of the border, government officials have moved to tighten safety regulations following the Lac-Mégantic disaster. Canada's transportation-safety watchdog blamed the train operator's "weak safety culture" and a host of other factors for the accident. Its report also said the Canadian government failed to properly monitor rail-safety inspections at the regional level. Write to Paul Vieira at and David George-Cosh at Credit: By Paul Vieira and David George-Cosh
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629450265
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450265?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Venezuela Cuts Spending as Oil Prices Plummet; Maduro Says He Cut 'Unproductive' Spending Amid Inflation, Contracting Economy
Author: Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract: None available.
Full text: CARACAS--Venezuela, facing an economic crisis compounded by, is cutting spending and evaluating changes to its cumbersome foreign-exchange mechanism, which has long been a deterrent to investment, President Nicolás Maduro said Tuesday. The executive said he authorized a 20% spending cut in expenses that he described as "unproductive" and not affecting the social programs that have kept his ruling Socialist party popular among Venezuela's many poor. Resource-rich Venezuela is slated to be the outlier in the region this year, with its economy expected to contract by nearly 3%, as the country is roiled by an inflation rate topping 60% and a dollar crunch that has resulted in frequent shortages of imported food and consumer goods. The economic woes have gotten more worrisome for Mr. Maduro thanks to the more than 30% slide in oil prices since the summer. The troubling outlook may push Venezuela's government to implement economic adjustments that had been expected all year but weren't delivered, analysts say. "The government is so desperate that they are going to have to make reforms," said Russ Dallen, partner at brokerage Caracas Capital Markets. "They really have no choice." The price of Venezuela's oil, which accounts for 96% of the country's dollar income, took a sharp plunge in recent days, falling nearly 7% from Friday to $63.40 as of Tuesday. The price of the oil basket is usually only published by the Oil Ministry at the end of each week, but Mr. Maduro offered early figures during an address transmitted on state television. "We have a very complicated challenge here," Mr. Maduro told government ministers. In a bid to improve economic growth, Mr. Maduro said his government is evaluating changes to its Sicad II dollar-distribution mechanism, but didn't offer details. Venezuela has had rigid currency controls for more than a decade that make the government the only source of hard currency in the economy. The government earlier this year introduced Sicad II as a vehicle to boost the supply of dollars to individuals as well as foreign companies and importers. Sicad II sells greenbacks for around 50 bolívares per dollar, compared with the government's fixed rate of 6.3 bolívares, which is reserved for priority sectors like food and medicine. But supply through Sicad II has fallen in recent months, sending the value of the bolívar plunging on the country's currency black market as locals look to shield their holdings from soaring inflation. One dollar fetched 157 bolívares in street transactions as of Tuesday, according to DolarToday.com, a website that tracks the parallel market. "We're going to be delivering a blow to the parallel dollar, which does so much damage," Mr. Maduro said. Venezuela Finance Minister Rodolfo Marco is in China this week seeking loans from the Asian country, which has already extended the South American nation nearly $50 billion in credit since 2007. Mr. Marco will next head to allied Iran and Russia also in search of financing, Mr. Maduro added. Write to Kejal Vyas at Credit: By Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629450344
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450344?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dollar Rises on Higher Yields, Lower Oil and Fed Speakers; Gains Are Continuation of Larger Rally That Accelerated in the Third Quarter
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
The dollar resumed its ascent against the yen and the euro on Tuesday, fueled by rising short-term U.S. bond yields, falling oil prices and comments by voting members of the Federal Reserve's policy-setting committee regarding the timing of higher interest rates.
Full text: The dollar resumed its ascent against the yen and the euro on Tuesday, fueled by rising short-term U.S. bond yields, falling oil prices and comments by voting members of the Federal Reserve's policy-setting committee regarding the timing of higher interest rates. The U.S. currency touched a seven-year high of 119.29 yen before settling 0.7% higher on the day at 119.24 yen. The euro fell 0.7% to $1.2381, its softest in a week and just above its lowest level since August 2012. The gains represent a continuation of a larger rally in the dollar that accelerated over the third quarter as yield-hungry investors piled into the dollar on expectations that an improving U.S. economy would push the Fed to raise its benchmark interest rate before other central banks raise theirs. Higher U.S. interest rates boost returns on dollar-denominated assets, making the dollar a more attractive investment. On Tuesday, higher U.S. short-term bond yields made the two-year Treasury note more attractive to investors than lower-yielding equivalent German and Japanese government bonds and spurred buying in the dollar, said Ian Gordon, currency strategist at Bank of America Merrill Lynch. U.S. yields rose as bond prices fell on profit-taking from last week's rally, as well as on positioning ahead of jobs data due later in the week. The move widened the gap between the two-year Treasury note, currently yielding 0.531%, and its German and Japanese counterparts, currently yielding 0.03% and 0.00%, respectively. "The rise in two-year U.S. yields is creating a dollar-positive tone," Mr. Gordon said. "It suggests policy divergence between U.S. and its [developed-market] counterparts." Lower oil prices helped the dollar too. The price of light, sweet crude in the U.S. fell 2% to $67.63 a barrel. Savings from cheaper oil helps U.S. consumers drive domestic economic growth, Mr. Gordon said, while economies around the world continue to sputter, making the dollar appear to be a better bet for investors. In addition, recent comments from Federal Open Market Committee members gave the dollar a boost. Speeches by New York Fed chief William Dudley and Fed Vice-Chairman Stanley Fischer on Monday had a small immediate impact in the market, but resonated on Tuesday, Mr. Gordon said. Mr. Dudley's language in particular focused more on the timing of interest-rate increases than on how falling commodity prices are affecting inflation expectations, said Richard Franulovich, senior currency strategist at Westpac Bank. "It's a conversation that's more constructive for the dollar, whereas a conversation about missing inflation targets or lowering inflation expectations would be considered dovish," Mr. Franulovich said. "It doesn't mean it brings forward the timetable for rate hikes, but on the surface it brings investors to the dollar." In another speech on Tuesday, Mr. Fischer said the Fed was moving closer to removing language stating that interest rates would remain lower for a considerable time, but added that any time frame for a rate increase would depend on future economic data. The market has interpreted omitting such language as hawkish in nature and as a sign the Fed is moving closer to a rate boost. Most market participants expect the Fed to raise rates around September 2015. It would be the first rate increase since June 2006. Investors appear loathe to make any large wagers that run counter to the prevailing strong-dollar trend before the European Central Bank's policy meeting on Thursday and the U.S. jobs report for November on Friday. Both are expected to provide direction for currencies. Credit: By James Ramage
Subject: American dollar; Bond markets; Central banks; Treasury notes; Interest rates; Federal Reserve monetary policy; Currency; Crude oil prices
Location: United States--US
Company / organization: Name: Federal Open Market Committee--FOMC; NAICS: 921130; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629450542
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450542?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Analysis: Oil-Price Drop Adds New Element to Middle East Tensions; Saudi Arabia and its Gulf Allies Can Stomach Low Prices Far Better Than Iran Can
Author: Trofimov, Yaroslav
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Saudi Arabia, the largest producer within OPEC, was the main proponent of leaving production targets untouched, arguing that a reduction would be futile in raising prices, since any supply shortfall would be quickly made up by oil produced in OPEC nonmembers, such as the U.S. Iran, which is jostling with Saudi Arabia's allies in theaters from Yemen and Bahrain to Syria and Lebanon, pushed for the cut and criticized OPEC's decision.
Full text: In a Middle East torn apart by the struggle between the Saudi-led Sunni conservative bloc and a rival alliance led by its Shiite nemesis Iran, the sudden rout in oil prices has just added a new ingredient to the volatile mix. The decline that followed Thursday's decision by the Organization of the Petroleum Exporting Countries cartel not to cut production hit all of the Middle East's oil powers. While merely a nuisance for some, for others it is a harbinger of possible economic catastrophe. Saudi Arabia and its fellow Gulf monarchies--Kuwait, the United Arab Emirates and Qatar--sit on giant rainy-day funds and can comfortably weather a few years of cheap oil, provided that prices stabilize not too far from current levels. Saudi strategic allies Egypt and Pakistan would likely benefit, as cheaper oil spurs their economies. But for Iran, its economy already buffeted by international sanctions as the nuclear issue remains unresolved, the recent oil rout represents real pain that makes its regional ambitions much costlier. "It seems that OPEC's Arab members do not mind the drop in the oil price--they see it part of the pressure exerted on Iran, which is involved in a cold war in the region, and in several conflicts in the area," said Riad Kahwaji, chief executive of the Institute for Near East and Gulf Military Analysis in Dubai. "If it wasn't deliberate, they do not mind." Saudi Arabia, the largest producer within OPEC, was the main proponent of leaving production targets untouched, arguing that a reduction would be futile in raising prices, since any supply shortfall would be quickly made up by oil produced in OPEC nonmembers, such as the U.S. Iran, which is jostling with Saudi Arabia's allies in theaters from Yemen and Bahrain to Syria and Lebanon, pushed for the cut and criticized OPEC's decision. To what extent this tilt in the region's balance of financial power will lead to policy changes is an open question. The Middle East isn't a part of the world where foreign-policy decisions are dictated by enlightened economic self-interest. Lower oil prices won't necessarily alter the behavior of regimes that perceive their very survival to be at stake. A case in point is Iran's support for the Syrian regime of Bashar al-Assad, which is fighting against Islamic State and more moderate Sunni rebels backed by the West and the Gulf monarchies. That support continued unabated in 2011 and 2012, even as Iran's economy tanked under the impact of international sanctions imposed at the time. Other Iranian clients in the region--such as Hamas and the Islamic Jihad in Palestinian territories and Hezbollah in Lebanon--do not actually require large cash infusions from Tehran. "We are locked in a dynamic that is not necessarily dictated by economics, but is mostly dictated by geopolitics," said Ali Vaez, Iran expert at the International Crisis Group think tank. "The principle that Iran is not going to allow its most important ally in the Arab world to collapse and create a circle of Sunni extremism in the middle of Lebanon and Iraq is a principle that is independent of the economic situation." Somewhat alleviating the pressure on the Assad regime, Islamic State--which smuggles out oil from the fields it controls, often with the connivance of other rebels--is also going to see its income shrink. "Oil is just part of their revenues, but it is still part of their revenues," said Andreas Krieg, an expert at King's College London. "It would be even more difficult for them to sell oil to the Turks or the Kurds because, at those prices, they would be less willing to take the risk." Across the border in Iraq, Islamic State's other main foe, the Shiite-led government in Baghdad, is also dependent on oil for most of its revenues. But even when oil was trading high, Iraq's army--weakened by endemic graft and low morale--collapsed in Mosul. Oil fluctuations won't make much of an immediate difference. "Iraq is in a mess, and it doesn't matter whether they make less or more money because it is so infested with corruption," said Jamal Khashoggi, a Saudi political analyst and general manager of the newly established Al Arab News regional TV channel. What cheap oil will do, however, is make it more palatable for countries across the region to cut costly fuel subsidies--and make life easier for those countries that have already done so. Fuel subsidies eat up a major chunk of the government budget in countries from Morocco to Jordan, and notably in Iran. Egyptian President Abdel Fattah Al Sisi has just pushed through a series of such unpopular cuts--steps no previous Egyptian government dared to make--and is planning to do more. Cheaper oil makes those cuts politically less risky, bolstering Mr. Sisi just as he confronts an Islamist opposition that could have capitalized on socioeconomic unrest. "Egypt is a massive winner," says former hedge-fund manager Emad Mostaque, a strategist at Ecstrat consultancy in London. And in Pakistan, where Prime Minister Nawaz Sharif moved to cut fuel subsidies last year, cheaper oil is already translating into lower prices at the pump. That is giving Mr. Sharif, who lived in Saudi exile after being ousted in a 1999 coup, a much-needed boost just as opposition politician Imran Khan is launching a new series of rallies that aim to unseat the government. "It is a relief for Pakistan," said Sakib Sherani, a former government economic adviser who runs the Macro Economic Insights think tank in Islamabad. "And politically, it is a big benefit to the government." Write to Yaroslav Trofimov at Credit: By Yaroslav Trofimov
Subject: Petroleum industry; Crude oil prices; International
Location: Lebanon Iran Saudi Arabia Middle East
People: Assad, Bashar Al
Company / organization: Name: Hamas; NAICS: 813940; Name: Kings College-London England; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newsp apers
Language of publication: English
Document type: News
ProQuest document ID: 1629450687
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450687?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Fits Texas Banks With a Five-Gallon Hat; In Lone Star State, Oil Slump Ripples Beyond Energy Companies
Author: Carney, John
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Texas banks have been investor darlings for several years thanks to robust growth, a reputation for excellent management and exposure to one of the strongest economies in the U.S. Earlier this year, shares of some Texas banks were trading at more than four times book value--a multiple almost undreamed of for banks elsewhere in the U.S. Some of that Texas premium has evaporated following word last week that the Organization of the Petroleum Exporting Countries would keep up production levels despite crashing oil prices.
Full text: It may not pay to mess with Texas anymore. Texas banks have been investor darlings for several years thanks to robust growth, a reputation for excellent management and exposure to one of the strongest economies in the U.S. Earlier this year, shares of some Texas banks were trading at more than four times book value--a multiple almost undreamed of for banks elsewhere in the U.S. Some of that Texas premium has evaporated following word last week that the Organization of the Petroleum Exporting Countries would keep up production levels despite crashing oil prices. But given the risk of a prolonged oil-price slump--and the likely effects on the broader Texas economy--investors shouldn't be tempted by the large Texas banks. Lower oil prices aren't likely to lead to the kind of catastrophic economic downturn that hit Texas in the late 1980s. The economy is much more diversified, with energy accounting for around 11% of the state's gross domestic product last year compared with nearly 20% in the 1980s. But a prolonged downturn in the price of oil would almost certainly spread beyond the energy sector to sap business from the new hotels, restaurants, and retail businesses that have sprung up around the shale boom. Real-estate prices could also come under pressure. Those ripples could hurt Texas banks, and not just those with outsize energy exposure. At Texas Capital Bancshares, for example, energy loans are just 6% of its $13.5 billion loan book. But with allowances for loan losses at just 0.72% of overall loans, the bank could face additional charges if the Texas economy deteriorates. What's more, around one-quarter of its loans are "market risk" real-estate loans on which repayment is expected to come from the sale or lease of the collateral--a particularly risky type of loan to hold in a downturn. Even after a recent selloff, Texas Capital trades at 2.09 times tangible book value and 16.76 forward earnings. Those multiples aren't likely to hold if oil prices stay low for longer. The Texas bank with the greatest direct energy exposure is Cullen/Frost Bankers; energy loans accounted for 14.9% of its total loan book as of Sept. 30. About 40% of those loans were linked to oil with the rest tied to natural gas. At the least, loan growth is set to slow as low oil prices depress production. Certainly, the 48% year-over-year growth for energy-linked loans seen in the third quarter is off the table. If so, Cullen/Frost's current valuation of 2.27 times tangible book value looks vulnerable. That is especially the case since 62% of its assets are in low-yielding securities that investors likely assign no multiple at all. Valuations of other big Texas banks with large bond portfolios, such as Prosperity Bancshares, at 2.98 times tangible book, and First Financial Bankshares, at 3.36 times, may also come under further pressure. So long as oil stays low and valuations of Lone Star state banks stay high, investors should hold off before trying to lasso a bargain. Write to John Carney at Credit: By John Carney
Subject: Banking industry; Petroleum industry; Prices; Loans; Book value; Banks; Bond portfolios; Economic growth; Gross Domestic Product--GDP
Location: Texas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629450766
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629450766?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Upside of Europe's Ebbing Inflation; Declines in prices spurred by cheaper oil can help economies rebound.
Author: Heise, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
[...]perhaps most important, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. [...]those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them.
Full text: The fall in the prices of oil and various other commodities is set to push eurozone inflation further toward zero in the coming months. This is creating enormous political pressure on the European Central Bank to act, including mounting calls for further quantitative easing that would include purchases of sovereign bonds. The ECB itself has contributed to the expectation that it can and will bring inflation back to its close-to-2% benchmark soon. Such policies are not cost-free. They encourage risk taking among investors searching for yield, potentially leading to malinvestment. They affect the distribution of income and wealth between the less affluent, who are most affected by low returns on bank deposits, and the wealthier, who tend to benefit most from rising share prices. Finally, perhaps most important, ultralow interest rates discourage savings for retirement and slow down the growth of existing pension assets. The ECB should incur these economic costs only if there's a compelling reason to do so. Yet the current debate about deflation misses several key points, raising the prospect that the ECB could further distort the European economy to fight a "problem" that isn't so problematic after all. Falling inflation rates in the eurozone are only partly explained by weak demand during the past two years. The ECB should consider other important, and presumably temporary, factors. First, the fall in the prices of oil and other commodities since 2011 has directly translated into lower consumer-price inflation through lower prices for gasoline, other oil products, and food. Falling commodity prices also affect broader producer prices, as lower costs for energy and other inputs are passed through to sales prices in manufacturing and other sectors of the economy. In well-functioning markets, a prolonged downward trend in commodity prices, as we have seen, also lowers so-called core inflation, which excludes energy and unprocessed food. Second, those eurozone countries that went through excessive price and cost increases before 2009 are in the process of correcting them. Lower inflation or slight deflation in Greece, Ireland, Portugal and Spain are not a sign of damaging deflation. They are necessary to restore the purchasing power of people whose wages and incomes have declined and to improve these economies' competitiveness on international markets. Once these countries recover, downward price pressures will disappear. It is difficult to quantify the impact these two developments have had on inflation. But assume that commodity prices in 2014 stayed at their average 2013 levels and that inflation in the eurozone's peripheral countries remained at 2%. The combined inflation impact of stable commodity prices and a lack of rebalancing in the periphery could easily be around 1%. In other words, inflation would today stand not at 0.4% but at 1.4%, far from the alleged dangers of deflation. The ECB also shouldn't be unduly concerned about low inflation expectations. Having declined somewhat in recent months, inflation expectations for the five-year horizon are currently somewhere between 0.7% (as indicated by bond prices) and 1.8% (as reported by surveys among forecasters). Inflation expectations among financial market participants do seem to be worryingly low. They are, however, also influenced by volatile oil and commodity prices. When oil prices drive down inflation, they also drive down inflationary expectations. There is a high correlation between actual inflation and inflationary expectations for the next two to five years. Inflationary expectations, in other words, are a dependent variable. These facts have several implications for the ECB. One is that central bankers should better manage market expectations by making it clear that changes in monetary policy can take two to five years to feed through into inflation. The ECB's tendency to overpromise has led to market demands that it deliver higher inflation faster, creating a needless challenge to the bank's credibility. Meanwhile, the ECB's inflation target needs recalibrating. Because the ECB has promised inflation of nearly 2%, it faces growing calls to deliver. It would be better to return to the stability definition the ECB used before a strategy change in 2003, which was to define price stability as inflation "below 2%." That would allow greater discretion in light of phenomena such as falling commodity prices. Central banks need room to maneuver in both directions. When commodity prices rose in 2011, eurozone inflation went up to 3%. The ECB, rightly, did not react by tightening significantly. If the ECB reverted to its previous, broader definition of price stability under present circumstances, it might create additional uncertainty, and markets might worry about the ECB's commitment to keep inflation above zero. But at least the ECB could be more explicit about which deviations from its close-to-2% target are worrisome and which are not only tolerable, but potentially positive for the economy. If oil and commodity prices continued to fall in 2015, the result could be an inflation rate below 0.5%. This would be no failure of the ECB but rather would help the recovery. It is the ECB's job to explain this. Otherwise, analysts and investors will continue to demand that it counteract falling commodity prices by launching a quantitative easing program. Mr. Heise is chief economist of Allianz SE in Munich. Credit: By Michael Heise
Subject: Inflation; Monetary policy; Central banks; Prices; Cost control; Eurozone
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629451737
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq Agrees on Kurdistan Oil Deal; Move Potentially Ends a Yearslong Political Impasse that Divided Iraq
Author: Bradley, Matt; Adnan, Ghassan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Dec 2014: n/a.
Abstract:
Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad. [...]recently a deal seemed further away than ever.
Full text: The Iraq government has agreed on an oil export deal with the semi-autonomous region of Kurdistan, according to Iraqi state television and a Kurdish lawmaker, potentially ending a yearslong political impasse that has divided the country. Under the new agreement, which comes into effect on Jan. 1, Kurdistan will export 250,000 barrels of oil a day while the disputed province of Kirkuk will sell 300,000 barrels a day, said Abdel Qadr Mohammed, a Kurdish member of the Iraqi parliament's finance committee, who participated in the negotiations. Both regions would export through Iraq's national oil company, the State Organization for Marketing of Oil, or SOMO. It marks a victory for Iraq's central government which has long sought to exercise more control over Kurdish oil exports and revenue. Tuesday's compromise would also see the Kurdish region keep 17% of Iraq's budget expenditure, nearly a year after Baghdad halted payments to the region in retaliation for its of Baghdad on the global market. Kurdish officials will also take a seat on SOMO's board, said Mr. Mohammed. Tuesday's agreement is testament to the new national unity forged under Iraq's Prime Minister Haider al-Abadi, who took office in September following the eight-year rule of Nouri al-Maliki, whose leadership was marked by sectarian and ethnic discord, corruption and worsening security. But the emerging resolution of Baghdad's oil dispute with Kurdistan also shows how the rise of Sunni insurgents from Islamic State has forced a fractured Iraq to resolve its differences. In addition to taking a portion of Iraq's budget, the Iraqi defense ministry will give a direct monthly payment to Kurdish fighters, known as the Peshmerga, to train and arm them in their fight against Islamic State, said Kawa Mohammed Mawloud, a Kurdish member of the oil and gas committee in parliament. Before Tuesday's deal, the Kurdish fighters had been financed and were mostly managed independently of Baghdad. Until recently a deal seemed further away than ever. The dispute came to a head this year after Baghdad cut off budget payments to the Kurdistan Regional Government and the KRG began exporting large volumes of oil for the first time via a pipeline to Turkey. Efforts by U.S. diplomats to broker a deal fell apart amid an atmosphere of mutual distrust, with the two sides unable to agree on who should control how the oil would be marketed and how the revenue would be handled. Shares in such as Genel Energy PLC and Gulf Keystone Petroleum Ltd. surged Tuesday on news of the deal and after the KRG made initial payments to some companies for oil exports. Kurdistan-focused oil stocks have languished this year as the political tensions with Baghdad left the KRG struggling to meet its payment obligations and the Islamic insurgency buffeting the country threatened operational security. Though good news for Iraq, the deal is likely to add to the downward tailspin in the oil market, with the additional barrels expected from Kirkuk next year set to add to the already ample supply in the market. Oil prices have amid sluggish demand growth and a boom in oil production in North America, but major oil producers in the Organization of the Petroleum Exporting Countries have shown little sign that they intend to pull back their own output to support prices. When OPEC met in Vienna last week the group decided to , sparking a rout in the oil market. Iraq, the group's second-largest producer after Saudi Arabia, in particular made it clear it wouldn't consider reducing its oil output, which remains below levels reached in the 1970s before Saddam Hussein came to power. Iraq's oil minister Adel Abdul-Mehdi told reporters in Vienna last week that Iraq is targeting production of around 3.8 million barrels a day next year, an increase of around 500,000 barrels a day compared with its production in October, according to the International Energy Agency. Under the terms of the deal with the KRG, exports via Ceyhan could increase by 250,000 barrels a day compared with November levels from January. --Sarah Kent contributed to this article. Write to Matt Bradley at Credit: By Matt Bradley and Ghassan Adnan
Subject: Kurds; Petroleum industry; Budgets; Petroleum production
Location: Baghdad Iraq Kirkuk Iraq Iraq Kurdistan
People: al-Maliki, Nouri al-Abadi, Haider
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 2, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629546827
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Jet Lessor's IPO Is Test in Cheap Oil Market
Author: Cameron, Doug
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Dec 2014: B.4.
Abstract:
Avic said Monday that it has dropped its offer after Avolon rejected its approach, echoing the abortive takeover last year by a Chinese consortium of Avolon's larger rival, International Lease Finance Corp. Airbus Group NV and Boeing Co. both have record order backlogs, and have played down the impact of falling fuel prices.
Full text: Avolon Holdings Ltd. on Monday launched an initial public offering of stock that values the Irish aircraft-leasing company at $1.8 billion, in a test of investor appetite for stocks with exposure to declining oil prices. The private-equity-controlled company priced its offer of 13.6 million shares at $21 to $23 a share ahead of a planned New York Stock Exchange listing under the ticker AVOL, according to a regulatory filing. An enterprise value of more than $6 billion would place Avolon among the top five publicly traded aircraft-leasing companies. A 20% fall in the average global price of jet fuel over the past year has led to a surge in shares of airlines. It also has stirred worries over a potential bubble in aircraft orders if carriers defer some of the record backlog of new fuel-efficient jets because of the drop in fuel prices. Avolon is proceeding with its IPO after the collapse of takeover talks with a number of potential buyers in Asia, including Avic Capital Co. of China. Avic said Monday that it has dropped its offer after Avolon rejected its approach, echoing the abortive takeover last year by a Chinese consortium of Avolon's larger rival, International Lease Finance Corp. Airbus Group NV and Boeing Co. both have record order backlogs, and have played down the impact of falling fuel prices. The jet makers and leasing companies maintain that airlines decide to buy new jets because of potential fuel and other efficiency savings garnered over many years, and don't react to short-term changes in oil prices. Executives have said requests for order cancellations and deferrals are running below their historical average. However, investors have pulled back from some lessors in recent months, while airline stocks have soared. AerCap Holdings NV, the world's largest jet lessor, which bought control of ILFC, is up 16% this year, but has lost 6.6% over the past three months. Air Lease Corp., the second-largest listed lessor, has climbed 22% in 2014. Like rival Aircastle Ltd., Air Lease has outperformed the S&P 500 this year and over the past quarter. Avolon owns a fleet of 122 mainly narrowbody aircraft with a book value of $5.3 billion and manages 12 more for other investors leased to 48 airlines. It has a $6.6 billion order book for 74 jets, including Boeing 787s, and intends to purchase A330neos from Airbus. Avolon was launched in May 2010 with private-equity backing by a group of former Royal Bank of Scotland PLC executives. Its largest shareholders are Cinven Partners LLP, CVC Capital Partners, Oak Hill Capital Partners and an affiliate of the Government of Singapore Investment Corp. Credit: By Doug Cameron
Subject: Leasing companies; Airlines; Stock prices; Investments; Private equity; Crude oil prices; Initial public offerings
Company / organization: Name: Aircastle Ltd; NAICS: 532411; Name: CVC Capital Partners Ltd; NAICS: 523910; Name: Government of Singapore Investment Corp Pte Ltd; NAICS: 525990; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Royal Bank of Scotland PLC; NAICS: 522110; Name: AerCap Holdings NV; NAICS: 523110; Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Airbus Group NV; NAICS: 336411, 336412, 336413; Name: Avolon Aerospace Leasing Ltd; NAICS: 532411
Classification: 3100: Capital & debt management; 8350: Transportation & travel industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Dec 2, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629999538
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Who's Afraid of Cheap Oil? The Saudis know they cannot kill U.S. shale output, even if the news media don't.
Author: Jenkins, Holman W; Jr.
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
For one thing, America's shale companies are much quicker and more flexible in slashing costs and sponsoring innovations in response to a falling oil price than are the state-owned oil companies of OPEC. [...]shale wells tend to be short-lived and much of their production is front-loaded.
Full text: Saudi versus shale? That's been the theme of countless stories on the business wires in recent months. The case is overstated. The Saudis aren't stupid. They can't kill America's shale revolution and it's pointless to try. Yes, there will be (figurative) blood, even bankruptcies, if oil tumbles into the $60-per-barrel range for a while. But pain for a few individual overextended companies will be opportunities for others. For one thing, America's shale companies are much quicker and more flexible in slashing costs and sponsoring innovations in response to a falling oil price than are the state-owned oil companies of OPEC. Secondly, shale wells tend to be short-lived and much of their production is front-loaded. That means investors face less uncertainty in relation to costs and revenues than do traditional drillers, and can more easily lock in a price for their eventual output before they start drilling. As well, much of the shale revolution in the U.S. was founded on natural gas. Natural-gas prices have been back up above $4 for most of the year. Lately gas prices have been erratic as expectations for the winter heating season bounce around but natural gas still remains all but unlinked from now-falling oil. Big new chemical plants are being built in the U.S. by American, European and South American investors to consume our homemade feedstock. Liquefied-gas exports are a rising opportunity for U.S. producers and unaffected by the price of oil. Germany and Japan are reducing their reliance on nuclear and coal, as are China and India. Europeans are trying to reduce their reliance on Russian gas. All these factors are likely to sustain the U.S. energy revolution in the long run even as domestic entrepreneurs adjust to a lower oil price. If new drilling slows up in the short term, as it likely will, the shale resources will remain in the ground until higher prices justify renewed investment. Oil prices took a big dip late last week after an OPEC meeting in which the overrated cartel failed to cut output. Whether anyone should have expected a cut is arguable, but since there was a meeting the possibility necessarily had to be priced into the market. When a cut didn't materialize, prices dropped below $70 for West Texas Intermediate for the first time in five years. Of course, when we talk about an OPEC cut, we really mean a Saudi cut, since other members are neither disciplined enough nor influential enough in markets to find it worth risking their own revenues in a common effort to prop up prices. The Saudis have played this role previously but they understand now that the shale revolution has diminished their sway and greatly increased the cost of any effort to divert prices from their natural market-clearing path for any length of time. The Saudis learned long ago that a strong price for their chief export comes from strong growth of the world economy, sadly lacking today. A failed global recovery is the deeper reason for the collapse in oil prices from $110 barely five months ago. Yet despite much confused rhetoric out of Japan about how a lower oil price undermines the government's battle against deflation, nothing benefits Japan like lower oil prices. Japan imports most of its energy. One of Japan's biggest exports is cars, which more consumers can afford to own and operate at a lower price of oil. A lower price can only do so much, of course, to pull Japan and Europe out of their sloughs, since so much of their domestic retail price of gasoline consists of taxes. But a lower oil price doesn't hurt. Understandably arousing suspicion in the U.S. oil patch was a sudden shift in Saudi behavior in recent weeks, from discounting to protect its Asian market share to discounting to win more business from domestic U.S. refiners. Even here the signal may be more about underlining Riyadh's strategic alignment with the U.S. despite skepticism about the Obama administration, especially as a Republican Congress begins to make itself felt. Saudi Arabia cares about Saudi Arabia, and its biggest strategic challenge now isn't coping with $70 oil but meeting the geopolitical unraveling of the Middle East. No matter who the U.S. president is, only America can deploy military power to make a meaningful difference. And unlike local powers, America is deemed relatively disinterested. In not fighting the oil market, these are the considerations that matter to the Saudi leadership right now. Cheaper oil benefits the U.S. economy, U.S. animal spirits and U.S. confidence and willingness to lead. It undermines Iran and Russia. Upping U.S.-bound exports via the Red Sea also underlines Saudi Arabia's ability to bypass the Strait of Hormuz, an oil-shipment chokepoint vulnerable to Iranian military action. Bottom line: America's hunt for a dark cloud behind the silver lining of lower oil prices is overdone. Credit: By Holman W. Jenkins, Jr.
Subject: Petroleum industry; Natural gas reserves; Meetings; Natural gas; Crude oil prices
Location: United States--US Japan
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629460111
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629460111?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Venezuela Cuts Spending as Oil Prices Plummet; Maduro Says He Cut 'Unproductive' Spending Amid Inflation, Contracting Economy
Author: Vyas, Kejal; Baer, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract: None available.
Full text: CARACAS, Venezuela--President Nicolás Maduro, struggling with an economic crisis compounded by falling oil prices, said Tuesday he authorized a 20% cut in government spending and plans to modify the country's complicated foreign-exchange system, opening the door to a possible devaluation. The moves could shore up the country's fragile finances but are also likely to deepen an economic downturn and pose a major political risk to Mr. Maduro, whose predecessor Hugo Chávez built a successful political machine based on government spending for the poor. The price of Venezuela's oil, which accounts for 96% of the country's dollar income, plunged in recent days, falling nearly 7% from Friday to $63.40 as of Tuesday. In a country that was already spending beyond its means for the past several years, the falling oil price stands to worsen the country's finances. Venezuela's fiscal deficit--the difference between what it spends and earns--stands at about 17% of annual economic output, a level economists say is unsustainable. "We have a very complicated challenge here," Mr. Maduro told government ministers in a televised address on Tuesday. He said the government only planned to cut "unproductive" expenses and wouldn't affect social spending. Underscoring the challenge facing Mr. Maduro, his popularity sank to a new low of 24.5% in November, down 5.7 percentage points from September, according to a poll by respected local pollster Datanalisis on Tuesday. Nearly 86% of the 1,293 homes surveyed said the country was headed in the wrong direction. Venezuela's economy is expected to contract by 3% this year, with an inflation rate topping 60% and a dollar crunch that has created frequent shortages of imported food and consumer goods. The falling price of oil sets the stage for worse to come. "The government is so desperate that they are going to have to make reforms," said Russ Dallen, partner at brokerage Caracas Capital Markets. "They really have no choice." Analysts say Mr. Maduro is walking a tightrope in trying to maintain the populist policies of Mr. Chávez while trying to confront the reality of Venezuela's economic problems. This past summer, Mr. Maduro publicly discussed measures to raise income like raising the country's virtually free price of gasoline but later backtracked. Foreign Minister Rafael Ramírez said last month that Venezuela would continue its generous PetroCaribe program in which more than a dozen allies in the region receive Venezuelan crude at preferential terms and can pay for it over 20 years. But behind the scenes, Venezuelan officials have held talks with some members like the Dominican Republic and its investment bank, Goldman Sachs Group Inc., on a deal that would give Venezuela cash in exchange for retiring debt, people familiar with the matter said. Under the proposed structure the governments discussed, Goldman would acquire the Dominican debt from Venezuela at a steep discount, one of the people said. The Dominican Republic would in turn sell bonds, using the proceeds to retire the debt now held by Goldman, the person said. The person said an agreement hadn't been reached, and a deal wasn't imminent. Jamaica, another Venezuela borrower advised by Goldman, has also considered a similar arrangement, the person said. In the face of the economic turmoil, Mr. Maduro said his government is evaluating changes to the foreign exchange system, but didn't offer details. Venezuela has had rigid currency controls for more than a decade. The government has at least three official exchange rates, including one pegged at 6.3 bolivares to the dollar. But on the black market, one dollar fetched 157 bolívares in street transactions as of Tuesday, according to DolarToday.com, a website that tracks the parallel market. Mr. Maduro pledged to make changes that would create more access to dollars through official means. "We're going to be delivering a blow to the parallel dollar, which does so much damage," Mr. Maduro said. Venezuela Finance Minister Rodolfo Marco is in China this week seeking loans from the Asian country, which has already extended the South American nation nearly $50 billion in credit since 2007. Mr. Marco will next head to allied Iran and Russia also in search of financing, Mr. Maduro added. Write to Kejal Vyas at and Justin Baer at Credit: By Kejal Vyas And Justin Baer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629462180
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629462180?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Imperial Oil Restarts Production at Kearl Oil Sands Mine; Exxon Subsidiary Says Mine's Production at 'Pre-Shutdown Levels'
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
CALGARY, Alberta--Exxon Mobil Corp.'s Canadian subsidiary on Tuesday said it has resumed production at one of its largest oil sands mines "to pre-shutdown levels" after it halted operations in November due to a mechanical problem.
Full text: CALGARY, Alberta--Exxon Mobil Corp.'s Canadian subsidiary on Tuesday said it has resumed production at one of its largest oil sands mines "to pre-shutdown levels" after it halted operations in November due to a mechanical problem. Imperial Oil Ltd. suspended production three weeks ago after detecting a vibration issue in the mine's core ore-crushing machinery used to extract heavy oil. That forced it to forgo output, which had averaged 92,000 barrels of crude a day in the third quarter excluding a 14-day maintenance window. "Repairs to the crusher unit have been completed," and the company is still looking into the cause of the equipment malfunction, Imperial spokesman Pius Rolheiser said. The Kearl plant cost 13 billion Canadian dollars ($11.4 billion) and started production in April 2013 after a series of delays and cost overruns. Construction of an C$8.9 billion expansion to produce an additional 110,000 barrels a day beginning in 2015 was 97% complete as of Sept. 30, according to the company. Located about 43 miles north of Fort McMurray in northern Alberta, it is expected to produce up to 345,000 barrels a day at full capacity by 2020. The mine's plant features state-of-the-art technology such as a new process to increase the efficiency of extracting heavy oil embedded in sand. Exxon considers Kearl a jewel in its oil sands assets as it amounts to about half of Imperial's 3.6 billion oil equivalent barrels of proved reserves. Ultimately, it hopes to extract up to 4.6 billion barrels of oil at Kearl over the next 40 years. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Petroleum industry; Oil sands; Oil reserves
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Imperial Oil Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: News
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629462189
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629462189?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Russia Sees Sanctions Leading to Recession --- Economy Ministry Expects West's Punitive Measures Still in Force by 2016, Compounding Damage From Falling Oil Prices
Author: Ostroukh, Andrey
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: A.11.
Abstract:
Though the worst performance in several years, that would be far less wrenching than Russia's last recession in 2009, when the global financial crisis triggered a contraction of 9%, driving unemployment up to 8.4% and forcing the Kremlin to spend tens of billions of dollars to steady the economy.
Full text: MOSCOW -- Russia's Economy Ministry warned that the country will slip into recession next year and the ruble will remain weak, in the government's strongest admission yet of the depth of the damage wrought by the drop in oil prices and Western sanctions. While many economists have been warning of a contraction for weeks, the government had stuck to its forecast for slow growth next year. But the sharp drop in oil prices -- which knocked the ruble to a record low of 54 rubles to the dollar on Tuesday -- has dashed remaining hopes. The latest forecast drew quick criticism from the Finance Ministry, which called it too gloomy and said it could be revised. A few hours after being published, the report disappeared from the Economy Ministry's website in a move a spokesman called technical. The Economy Ministry said it sees gross domestic product shrinking by 0.8% in 2015 compared with earlier expectations for a recovery in growth to 1.2%, from around 0.5% this year. A month ago the central bank predicted zero growth next year. A contraction in GDP would be Russia's first since 2009. The ministry also said it now expects the Western sanctions to still be in place by 2016, reflecting the hard line being repeated by leaders in Europe. German Chancellor Angela Merkel has said Moscow was far from having economic sanctions eased or lifted -- a tough stance she reiterated last week during a parliamentary debate in Berlin, where she accused Russia of calling Europe's peaceful, postwar order into question. In September, she said that it may even be necessary to reconsider energy cooperation with Russia. Slovakia's Prime Minister Robert Fico said that clashes between Ukrainian government forces and pro-Russia separatists may still expand into a broader war and that Europe should push forcefully for peace talks. Russia has largely shrugged off the penalties imposed in the wake of its annexation of Ukraine's Crimea region and its alleged support of rebels in that country's east. The Kremlin denies aiding the rebels. But the ruble is down nearly 40% year-to-date following the recent dive in the price of oil below $70 a barrel from more than $100 in the summer. Oil and gas exports are Russia's main source of foreign-currency revenues. "We changed our forecast from growth to recession about two months ago due to negative dynamics in investment and declining oil prices," said Vladimir Osakovsky, chief economist at the Bank of America Merrill Lynch in Moscow. Public-opinion polls suggest the slowdown isn't likely to cause much political difficulty for President Vladimir Putin, especially given the Kremlin's tight control over the political arena. Few observers see the economic troubles becoming so severe that they could pose a real challenge to Mr. Putin's tight grip on the political system, barring sweeping additional sanctions or a sustained deeper decline in oil prices. Surveys show inflation is reported as Russians' most pressing concern, but few voice criticism of the government's foreign policy. Unless the oil price falls substantially further, many forecasters expect any recession in Russia next year to be relatively mild, with a contraction of about 1%. Though the worst performance in several years, that would be far less wrenching than Russia's last recession in 2009, when the global financial crisis triggered a contraction of 9%, driving unemployment up to 8.4% and forcing the Kremlin to spend tens of billions of dollars to steady the economy. By contrast, the government's latest forecast calls for the jobless rate to rise from the 5.5% expected this year to 6.4% in 2015. Real disposable incomes are seen dropping 2.8% next year, after rising only 0.6% in 2014. The Economy Ministry lowered an average 2015 oil price forecast to $80 a barrel from $100 a barrel. Such a revision is expected to keep an average ruble rate in 2015 at 49 per dollar compared with earlier expectation of 37.7. The real effective ruble rate is expected to weaken by 13.5% next year. The Finance Ministry said that the Economy Ministry is exaggerating downside risks to the ruble. Finance Minister Anton Siluanov said the dollar will be trading below 45 rubles next year if oil prices average $80 a barrel. Credit: By Andrey Ostroukh
Subject: Recessions; Crude oil prices; Economic development; Economic growth; Gross Domestic Product--GDP; Economic conditions -- Russia; Sanctions
Location: Russia Europe
People: Fico, Robert Merkel, Angela
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Ministry of Economic Development-Russia; NAICS: 926110
Classification: 1110: Economic conditions & forecasts; 1300: International trade & foreign investment; 8510: Petroleum industry; 9176: Eastern Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.11
Publication year: 2014
Publication date: Dec 3, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629510930
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629510930?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Loses Grip On Gains as Pact Augurs More Oil
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: C.4.
Abstract:
The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices.
Full text: Oil prices erased much of Monday's gains as an agreement between Iraq and the Kurdish regional government portends more supplies for a global market already brimming with crude. Light, sweet crude for January delivery, the front-month contract, fell $2.12, or 3.1%, to $66.88 a barrel on the New York Mercantile Exchange on Tuesday. Brent crude, the global benchmark, fell $2, or 2.8%, to $70.54 a barrel on the ICE Futures Europe exchange. Iraq and semiautonomous Kurds in the northern region of the country have been locked in a yearslong feud over sharing revenue from oil production, culminating with the Kurdish regional government exporting several cargoes independently of Baghdad this year through a pipeline to Turkey. But Iraqi media and a Kurdish lawmaker said Tuesday that the sides had reached an agreement. The agreement, which would take effect Jan. 1, allows Kurdistan to export 250,000 barrels a day, while the disputed region of Kirkuk would sell 300,000 barrels a day through Iraq's national oil company. In exchange, the Kurdish region would receive 17% of Iraq's national budget, and the defense ministry would provide direct financing to Kurdish fighters for training and arms. Andrew Lebow, a trader for investment bank Jefferies, said the oil market appeared to give credence to the agreement. "The market may be taking this one more seriously than others," Mr. Lebow said. "This could result in more supply on the market, which is the last thing we need." The news added to the already-bearish conditions in the oil market. The two major benchmarks are off about 38% from 2014 highs hit in June, as the world market has become awash in an abundance of crude thanks to increased oil exports from Iraq and Libya among others, as well as shipments of refined petroleum products from the U.S. The market's slide deepened last week after ministers from member nations of the Organization of the Petroleum Exporting Countries failed to reach an agreement that would curtail output and shore up prices. Meanwhile, traders appeared eager to take profits from Monday's run-up, when U.S. oil prices gained 4.3% in the absence of any bullish fundamental developments in the market. "We don't really have a fresh compelling fundamental story here," said Tim Evans, an analyst at Citigroup. "It's more a question of where does the price belong given the fundamentals we already know." Those fundamentals look set to turn even more bearish in coming months, with analysts and traders saying a period of moderately priced oil is likely to prevail as a new normal for some time. London-based research consultant Energy Aspects said in a note that global surpluses will increase through the first half of 2015 as output rises and demand for OPEC crude falls. In the U.S., analysts project a 600,000-barrel increase in crude stockpiles when weekly data are released by the Energy Information Administration on Wednesday. The U.S. has 383 million barrels of crude in storage, above average for this time of year. Tuesday's selloff carried over into other oil-related markets, with gasoline for January delivery falling 6.94 cents, or 3.7%, to $1.8116 a gallon, the lowest settlement in more than five years. January diesel settled at its lowest level in more than four years, losing 5.8 cents, or 2.6%, to close at $2.1544 a gallon. --- Matt Bradley and Ghassan Adnan contributed to this article. Credit: By Christian Berthelsen
Subject: Kurds; Petroleum industry; Agreements; Petroleum production; Crude oil; Commodity prices
Location: United States--US Iraq
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: New York Mercantile Exchange; NAICS: 523210
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 3, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 009 99660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629510994
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dow Hits Record as Energy Stocks Bounce --- Chevron, Exxon Mobil Lead Blue Chips Higher as Investors Reverse Bearish Bets and Chase Bargains After Sector's Tumble
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Dec 2014: C.10.
Abstract:
The Dow Jones Industrial Average climbed to a record as investors drove up shares of big energy companies seen capable of weathering the significant decline in oil prices.
Full text: The Dow Jones Industrial Average climbed to a record as investors drove up shares of big energy companies seen capable of weathering the significant decline in oil prices. The Dow gained 102.75 points, or 0.6%, to 17879.55, hitting its 32nd record high this year. Chevron and Exxon Mobil were the best performers among the blue chips, contributing a total of 27 points to the advance. Chevron gained $2.29, or 2.1%, to $114.02. Exxon rose 1.84, or 2%, to 94.19. The S&P 500 index gained 13.11 points, or 0.6%, to 2066.55, closing 0.3% below its record. The Nasdaq Composite Index rose 28.46 points, or 0.6%, to 4755.81. Energy stocks were the best-performing sector in the S&P 500, gaining 1.3% despite a renewed fall in energy prices. Crude-oil futures fell 3.1% to $66.88 a barrel, while Brent crude, the global benchmark, fell 2.8% to $70.54 a barrel. Traders said the bounce in energy stocks came as some investors bought shares to reverse bearish bets. Other investors hunted among beaten-down names, focusing on companies with broad business lines and healthier balance sheets. Even with Tuesday's uptick, energy stocks in the S&P are down 7% over the past month. "A lot of people are wondering whether it is a buying opportunity," Brian Fenske, head of sales trading at New York-based brokerage firm ITG. "You have to be cautious about it, but [the rise] is good to see." Small-cap energy companies in the S&P 600, many of which have less-diversified businesses and more debt, fell 0.4%. They have lost 23% over the past month. European energy stocks also rose, fueling a 0.5% advance in the Stoxx Europe 600. Falling oil and gasoline prices are seen by many analysts as boosting corporate earnings by lowering costs and allowing for more disposable income among consumers. But some investors are concerned that falling oil prices could lead to slower investment and growth in the energy industry, which has been an important engine of growth for the broader economy. Patrick Kaser, who manages more than $6 billion of large-cap stocks for Brandywine Global Investment Management, still thinks the drop in oil will be good for U.S. stocks. But he will be watching for signs that energy companies are laying off workers. "In theory, everybody agrees that lower gas prices are good . . . and I think that [idea] wins out," Mr. Kaser said. "But it's not as open-and-shut as it was when we were producing less oil." Consumer-discretionary stocks in the S&P 500 gained 0.4%, but still lagged behind the broader market. They fell 1.1% Monday, after news of disappointing sales over the Black Friday weekend, the unofficial kickoff of the holiday shopping season. Retailer Coach Inc. was the biggest decliner in the group, falling 91 cents, or 2.5%, to 35.19. Treasury prices fell, pushing up the yield on the 10-year note to 2.285%. Gold futures declined 1.5% to settle at $1,199.20 an ounce. In corporate news, Avanir Pharmaceuticals Inc. jumped 1.92, or 12.8%, to 16.92 after agreeing to be purchased by Japanese drug maker Otsuka Pharmaceutical Co. for $17 a share. The deal values California-based Avanir at $3.5 billion and is expected to close in the first quarter of 2015. In other deal news, Cypress Semiconductor agreed to buy memory-chip maker Spansion. Spansion shares soared 5.01, or 21.9%, to 27.86. Overseas early Wednesday, the Shanghai Composite Index was up 1.5% after after a measure of Chinese nonmanufacturing activity improved. The Shanghai benchmark has had a nearly uninterrupted string of 1% plus daily gains since Nov. 21, when China's central bank announced a surprise rate cut. Japan's Nikkei Stock Average was up 1.1%, while Australia's S&P/ASX 200 was up 0.4%. Credit: By Alexandra Scaggs
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Company / organization: Name: Coach Inc; NAICS: 316992, 316998; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Chevron Corp; NAICS: 211111, 324110
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.10
Publication year: 2014
Publication date: Dec 3, 2014
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629511009
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Brent Crude Slips as OPEC Supply Cut Looks Unlikely; Global Crude-Oil Supplies Remain Ample
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
Oil prices have slumped for months on concerns about a world-wide glut of oil, as supply growth has outpaced demand and global inventories have piled up.
Full text: Brent crude futures fell to a multiyear low Wednesday on indications that global supplies would remain ample as the Organization of the Petroleum Exporting Countries maintains its production levels. Meanwhile, U.S. oil futures rose after weekly inventory data showed an unexpected decline in domestic stockpiles. Prices have slumped for months on concerns about a world-wide glut of oil, as supply growth has outpaced demand and global inventories have piled up. Prices fell to multiyear lows last week after OPEC decided to maintain its current production quota. Following last week's OPEC meeting, some analysts said the cartel would likely agree to cuts in early 2015. But even if oil prices fall further. OPEC's top producer believes oil prices could stabilize around $60 a barrel, a level that it and other Gulf producers believe they could withstand. Wednesday's report about Saudi Arabia's plans is "just another factor that solidifies the bearish outlook," said Kyle Cooper, managing partner of research consultancy IAF Advisors in Houston. The Saudis "have seen their market share be continually diminished, especially in the U.S., and I think they've grown weary of it. They're going to defend their market share a little more than the mind-set had been a few months ago." Brent, the global benchmark, fell 62 cents, or 0.9%, to $69.92 a barrel on ICE Futures Europe, the lowest settlement since May 25, 2010. Light, sweet crude for January delivery settled up 50 cents, or 0.8%, at $67.38 a barrel on the New York Mercantile Exchange. U.S. crude supplies fell by 3.7 million barrels in the week ended Nov. 28, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal expected stocks to rise by 600,000 barrels. Gasoline stockpiles rose by 2.1 million barrels. Analysts had predicted stockpiles would rise by 800,000 barrels. Gasoline distributors likely delayed buying more supplies from last week to this week because they expected that prices could fall further after last week's OPEC meeting, said Andy Lipow, president of Lipow Oil Associates in Houston. "If you know something's going on sale Monday...you'd wait if you could," Mr. Lipow said. Distillate stocks, which include heating oil and diesel fuel, rose by three million barrels. Analysts had expected a 300,000-barrel weekly decrease. "The product builds overall outweighed the crude-oil draw," said Tony Headrick, energy analyst at CHS Hedging LLC. "The market still feels heavy." January reformulated gasoline blendstock, or RBOB, fell 0.46 cent, or 0.3%, to $1.8070 a gallon, the lowest settlement since Oct. 12, 2009. January diesel slid 2.1 cents, or 1%, to $2.1334 a gallon, the lowest settlement since Sept. 28, 2010. Christian Berthelsen, Summer Said, Sarah Kent and Benoît Faucon contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Inventory; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629564421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629564421?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Talking Turkey on Russia's Energy Woes; Oil Price Changing Fortunes Among Emerging-Market Countries
Author: Barley, Richard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
Investors were concerned about the country's current-account deficit and the unorthodox approach of the Central Bank of Turkey to interest-rate policy, as well as political risk.
Full text: Energy united Russia and Turkey this week, as Moscow scrapped a planned natural-gas pipeline to the European Union in favor of . But the price of energy--and oil in particular--is driving the two countries' outlooks apart. The Russian ruble has tracked oil closely this year, and is now down 38% against the U.S. dollar. The scale of the move is , which has essentially allowed the ruble to float, as it will push inflation higher from an already elevated level of 8.3% and potentially poses systemic risks. The central bank might be thinking of raising rates--but it has already put them up by four percentage points this year to 9.5%. The Russian Economy Ministry Tuesday warned of a . Just a year ago, however, it was the Turkish lira under fire in the foreign-exchange market. Investors were concerned about the country's current-account deficit and the unorthodox approach of the Central Bank of Turkey to interest-rate policy, as well as political risk. But after a bout of turbulence in January, the lira has had a relatively smooth ride against the dollar, and is down just 4% year-to-date. Lower oil prices are a boon for the Turkish economy: it is a big energy importer, to the tune of some $55 billion a year, or 6.5% of GDP, according to Standard Bank. Falling oil should deliver benefits for both the current account and for inflation. That might even allow the central bank room to cut rates as Turkey continues to pursue strong growth. Investors are becoming more enthusiastic about Turkey's prospects. Exchange rates aren't the only sign of divergence. The annual cost of insuring $10 million of Turkish government debt against default for five years has fallen more than a third this year to $155,000, while for Russia it has more than doubled to $355,000. Russia's problems seem unlikely to go away soon. But investors should be wary of assuming Turkey is set fair purely as a result of an oil windfall. The country still needs to carry out reform; if lower oil prices allow the government to dodge hard decisions after next year's elections, that would be a worrying sign. Turkey needs to use the benefit of lower oil prices to ensure that it doesn't end up in the hot seat again. Write to Richard Barley at Credit: By Richard Barley
Subject: Prices; Political risk; Central banks; Petroleum industry; American dollar
Location: Turkey Russia United States--US
Company / organization: Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629564426
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629564426?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Bank of Canada Stands Pat, Says Oil Prices Pose Risk; Stronger U.S. Growth Seen Bolstering Exports
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
"Overall, the balance of risks remains within the zone for which the current stance of monetary policy is appropriate," the central bank said in its final interest rate decision of 2014, largely maintaining language used in the October policy statement.
Full text: OTTAWA--Canada's central bank held its key interest rate at 1% on Wednesday and said it is seeing signs of a broadening recovery in the Canadian economy, but cautioned about headwinds from . The Bank of Canada said weaker oil prices pose an "important downside risk" to inflation, though the impact will be tempered by stronger U.S. growth, a weaker Canadian dollar and new federal fiscal measures such as increased infrastructure spending and tax breaks. With the central bank pinning its hopes and business investment taking over from debt-ridden consumers to drive growth in Canada, its assessment of the U.S. economy is important, since some 75% of Canadian exports head south of the border. The bank acknowledged this long-awaited rotation may now be under way, though declining commodity prices will weigh on the economy. The central bank said the output gap--the difference between actual and potential growth--appears smaller than predicted in October, but that the labor market continues to show significant economic slack. After some volatile trading immediately after the statement, the Canadian dollar edged higher, pushing the U.S. dollar to C$1.1355 area from C$1.1407 late Tuesday. "Overall, the balance of risks remains within the zone for which the current stance of monetary policy is appropriate," the central bank said in its final interest rate decision of 2014, largely maintaining language used in the October policy statement. The Bank of Canada's tone is slightly less dovish than in October, said Benjamin Reitzes, senior economist at BMO Capital Markets, but "they're clearly on hold for quite some time." "They're cognizant of downside risks from oil prices, but at this point, they think there is enough momentum for the economy to stay on the positive track it's on," Mr. Reitzes said. The overnight rate has remained at 1% now for more than four years, since September 2010, marking the longest period of no change to the policy rate since the 1950s. The central bank acknowledged inflation has been stronger than it had predicted, but said higher consumer prices over the past year are largely due to the temporary effects of a weaker Canadian dollar and sector-specific factors, such as higher meat and telecommunication costs. Canadian inflation has been one among developed economies in recent months, exceeding the 2% the Bank of Canada targets when setting interest rates. The central bank said underlying inflation has edged up, but remains below 2%. In October, it described underlying inflationary pressures as being muted due to economic slack and stiff retail-sector competition. The Bank of Canada signaled greater concern about household imbalances--code for lofty house prices and high household debt--saying it presents significant risk to financial stability, which suggests rate cuts aren't in the cards. In October, it said risks associated with household imbalances were edging higher. "There was little chance [of rate cuts] in the first place, and there is even less now," Mr. Reitzes said. Write to Nirmala Menon at Credit: By Nirmala Menon
Subject: Central banks; Canadian dollar; Monetary policy; Interest rates
Location: United States--US Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629663469
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Malaysia's Petronas Delays Decision on Canadian Gas-Export Terminal; Company Cites High Development Costs, Falling Oil Prices
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Dec 2014: n/a.
Abstract:
CALGARY--Malaysian state-owned energy company Petronas on Wednesday said it would delay making a final investment decision on building a multibillion-dollar natural gas export plant on Canada's Pacific coast, citing high development costs and a recent slump in oil prices.
Full text: CALGARY--Malaysian state-owned energy company Petronas on Wednesday said it would delay making a final investment decision on building a multibillion-dollar natural gas export plant on Canada's Pacific coast, citing high development costs and a recent slump in oil prices. The move represents a setback for the project and the government of British Columbia, which has looked to revitalize its remote northern coast by establishing an industry to ship liquefied natural gas to Asia. It also raises questions about Canada's viability as a hub for exporting surplus natural gas from North America. Petroliam Nasional Bhd., or Petronas, had set a year-end deadline; but following meetings on Monday between CEO Shamsul Azhar Abbas and British Columbian government officials, the company said it would defer a decision on the 36 billion Canadian dollar ($31.7 billion) facility to cool and compress gas for transport overseas. "Costs associated with the pipeline and LNG facility remain challenging and must be reduced further," the company said. Mr. Shamsul said in the statement that Petronas hoped to make a decision as soon as possible, but he didn't specific a date. He noted the potential threat from more economically "competitive United States LNG projects." The move comes just a week after British Columbia to the Petronas-led project, known as Pacific NorthWest LNG, and an associated natural-gas pipeline designed to connect the plant with gas fields hundreds of miles inland. Pacific NorthWest LNG is among 18 LNG terminals proposed for shipping gas from Western Canada to global markets, but none have been built yet amid concerns about construction and operational costs. In October, BG Group PLC said it would of its Canadian LNG plans into the next decade. Petronas said last week that it may be forced to next year between 15% and 20% due to the sharp fall in crude oil prices. But Mr. Shamsul told reporters at that time that his company was still on track for making a decision on the Canadian LNG plant in December. The Malaysian company complained earlier this year about the burden of Canadian regulatory and tax policies. In response, British Columbia halved a planned gas export tax to 3.5%. But Petronas and other LNG project sponsors have said they are concerned about Canada's competitiveness compared with rival projects globally. While most Canadian proposals are for plants built from scratch at huge cost on the remote and undeveloped northern coast of British Columbia, many U.S. LNG terminals involve cheaper retrofitting of existing equipment in heavily industrialized areas on the Gulf Coast. In April, Petronas in Pacific Northwest LNG to China Petroleum & Chemical Corp., or Sinopec. Japan Petroleum Exploration Co. and Indian Oil Corp. each have 10% stakes in the project, along with 3% owned by Brunei National Petroleum Co. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: LNG; Natural gas; Petroleum industry; Costs; Crude oil prices
Location: Asia Western Canada British Columbia Canada North America
Company / organization: Name: Petronas; NAICS: 211111; Name: BG Group PLC; NAICS: 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 3, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629754388
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canadian Oil Sands Cuts Dividend, Citing Debt Load and Crude Price Drop
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.
Full text: CALGARY--Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands joint venture, said Wednesday it plans to slash its dividend by nearly half to cope with a rising debt load and the recent swoon in global prices for crude oil. The Calgary-based company said its dividend payment will drop to 20 Canadian cents a share ($0.18) in the fourth quarter, down 43% from the 35 Canadian cents a share it paid investors in the third quarter. It said the move was necessary to stabilize its balance sheet in a lower oil price environment. "At the current dividend level, net debt would grow at a pace that would quickly exceed $2 billion," Canadian Oil Sands said in a statement. Net debt stood at C$1.7 billion as of September 30, the company said when it reported third quarter earnings in October. Canadian Oil Sands projected cash flow from operations in 2015 of C$730 million, or C$1.51 per share, based on an oil price assumption of $75 per barrel of West Texas Intermediate crude. That is down sharply from the C$1.27 billion, or C$2.62 per share, it expects to earn this year based on WTI of $85 to $103 per barrel. The company also said it plans to increase crude production about 6% next year to between 35 and 40 million barrels of oil and reduce 2015 capital spending to C$564 million, down from an estimated C$938 million this year. It said the lower budget stemmed from the completion of several major reinvestment projects. Canadian Oil Sands, which in third-quarter net profit, has struggled to cope with a series of unplanned outages at Syncrude's surface-mining operations. Canadian Oil Sands owns a 37% stake in its main operating asset, Syncrude, which is one of the largest and oldest oil-sands producers. Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Oil sands; Petroleum industry; Stock prices; Energy economics; Debt restructuring; Dividends
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629779886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629779886?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
MoneyBeat: Oil Bear Cleans Up on Spill; Trilogy Has Returned 8% This Year
Author: Wirz, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
The thesis behind the trade was that companies that borrowed heavily to finance costly drilling, like extracting oil from tar sands in the Canadian tundra, would become cash-flow negative if oil prices fell for a prolonged period.
Full text: The selloff in bonds issued by energy companies continued this week but at least one investor isn't terribly bothered by the downturn: Barry Kupferberg, head of research at $250 million credit hedge fund Trilogy Capital. This spring, the firm founded by former Bear Stearns bond salesman Jonathan Rosenstein made large short bets against bonds of energy companies with high production costs, expecting that slowing demand from China would depress oil prices. The thesis behind the trade was that companies that borrowed heavily to finance costly drilling, like extracting oil from tar sands in the Canadian tundra, would become cash-flow negative if oil prices fell for a prolonged period. The bearish wagers helped Trilogy post a positive return in September when the average hedge fund lost 0.89%. The firm has returned about 8% this year through October, almost three times the hedge-fund average of 3%, according to data provider HFR Inc. Some energy-company bonds have fallen more than 50% in the past three months but Trilogy remains bearish for now, Mr. Kupferberg says. "Usually when these downturns end, they don't end until you see real capitulation, meaning bankruptcies." One company that is struggling is Quicksilver Resources Inc., an independent oil-and-gas producer that borrowed about $1.8 billion in 2008 to pay for a large acquisition. The company violated minimum performance covenants in its bank loans earlier in the year and prices of its bonds have fallen to 20 cents on the dollar from around 90 cents in August on concerns that it will default. Quicksilver has hired investment banks to explore asset sales, while bondholders have hired Moelis & Co. to advise on a potential restructuring of the company's debt, a person familiar with the matter said. Credit: By Matt Wirz
Subject: Hedge funds; Petroleum industry
Location: China
Company / organization: Name: Quicksilver Resources Inc; NAICS: 211111; Name: Moelis & Co; NAICS: 523110; Name: Bear Stearns Cos Inc; NAICS: 523120, 523140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629818236
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629818236?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Trains Hide in Plain Sight; Rail Industry's Secret: Volatile Crude Routes Often Kept From Cities and Towns
Author: Gold, Russell
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract: None available.
Full text: NEWARK, Del.--Early last year, a new kind of pipeline full of volatile oil appeared in this college town, halfway between Philadelphia and Baltimore. If it had been a traditional pipeline, there would have been government hearings and environmental reviews. There would be markers or signs along the line's route and instructions for nearby residents on how to react in an emergency. A detailed plan for responding to a spill would be on file with the federal government. None of that happened here in Newark. In fact, nobody initially notified the city's fire chief about the new line, which can carry more than a hundred thousand barrels of oil a day along Amtrak's busiest passenger-rail corridor. This was possible because the oil here is transported by a virtual pipeline: mile-long strings of railroad tanker cars that travel from North Dakota to a refinery in Delaware. In Newark, the cars are especially easy to spot as they often sit for hours on tracks 10 feet away from passing passenger trains, waiting for an opening at the nearby PBF Energy Inc. plant. While the existence of this virtual pipeline is obvious to its neighbors--trains are visible from homes, the local commuter rail station, a park and a popular jogging trail--it is officially secret. Delaware Safety and Homeland Security officials contend that publicizing any information about the oil trains parked there would "reveal the State's vulnerability to terrorist attacks," according to a letter to The Wall Street Journal. Finding the locations of oil-filled trains remains difficult, even in states that don't consider the information top secret. There are no federal or state rules requiring public notice despite several fiery accidents involving oil trains, including one in Lac-Mégantic, Quebec, that killed 47 people. The desire for secrecy seems wrongheaded to some experts. "If you don't share this information, how are people supposed to know what they are supposed to do when another Lac-Mégantic happens?" asked Denise Krepp, a consultant and former senior counsel to the congressional Homeland Security Committee. She said more firefighting equipment and training was needed urgently. "We are not prepared," she said. In May, federal regulators ordered railroads to tell states about the counties traversed by trains carrying combustible crude oil from the Bakken Shale in North Dakota so local first responders could be notified. The Journal submitted open-records requests to all 48 contiguous states and the District of Columbia and received at least some information from all but 14: Colorado, Delaware, Idaho, Indiana, Louisiana, Maine, Maryland, Michigan, Nevada, Ohio, Tennessee, Texas, Vermont and West Virginia. Mapping data received from the disclosing states, the Journal found a lot of other cities in the same situation as Newark. On its way to refiners on the East Coast and along the Gulf of Mexico, oil often sits in tank cars in railroad yards outside Harrisburg and Pittsburgh, Penn., and passes through Cleveland, Chicago, Albany, Seattle and a dozen other cities. Bakken oil is flowing in two directions from North Dakota: west toward Portland and the Puget Sound; and east through Minneapolis, then southeast through Chicago, and across the northern edge of Indiana and Ohio. There it splits into three routes: One heads to Albany; another goes to Yorktown, Va., where the crude is transferred to barges for trips up and down the East Coast. The third heads to Philadelphia through Ohio, which is one of the states that doesn't disclose data, but the Journal was able to deduce the routes by following available maps. Other oil trains run south from Oregon to California, from Minnesota to Texas, and from Wisconsin toward the Gulf Coast. Maryland previously had attempted to release oil-train information, but was successfully sued by Norfolk Southern Corp. and CSX Corp. Norfolk argued that these trains were carrying "highly volatile cargo" that could be a target for terrorists. Railroads have continued to press for secrecy; in August, the Association of American Railroads and the American Short Line and Regional Railroad Association wrote a confidential letter to the federal government asking that routing information be kept from the public. The request was denied. "The rail industry is concerned making crude oil route information public elevates security risks by making it easier for someone intent on causing harm," said AAR spokesman Ed Greenberg. The group said it supports sharing information with local officials. Neither the oil nor the railroad industry anticipated the rapid and dramatic rise of oil shipments by train. In 2009, U.S. railroads transported about 21,000 barrels a day of oil; today they carry 1.1 million barrels a day, according to data from the Surface Transportation Board, a federal regulator. Last year, railroads generated about $2.15 billion in revenue from moving crude. Shipments of hazardous material, especially crude oil, have soared recently, even for railroads whose routes are far from the oil fields of North Dakota. Norfolk Southern and CSX, which serve the East Coast, moved 53,001 carloads of oil in the three months ended September, compared with just seven carloads during the same period of 2009, according to data from the federal Surface Transportation Board. They transported 156,731 carloads of industrial chemicals, some of which are hazardous, in the third quarter of this year, up 8% from five years ago. Trains are the new pipelines, and have become a vital link in the energy infrastructure, said Dave Pidgeon, a spokesman for Norfolk Southern. "We are the keystone, the bridge, between the source of where the energy is extracted and where it is refined," he said. Moving hazardous material like crude, he added, is "safe and getting safer." CSX didn't respond to requests for comment. Trains offer the energy industry flexibility to move oil where it can fetch the highest prices. Building the needed loading and unloading terminals is fast and inexpensive, and an extensive rail network connects the Midwest to the East and West coasts. While these virtual pipelines can be created in months, traditional pipelines have become increasingly difficult to install as environmental groups seek to block permits for new energy infrastructure. "What we are seeing on rail is largely due to opposition to and uncertainty around building pipelines," said Brigham McCown, who was the chief pipeline regulator under President George W. Bush. Pipelines, he adds, are far safer than trains. Since Lac-Mégantic, several trains have derailed and exploded. Most of these accidents have happened in relatively rural areas like Casselton, N.D., a town of about 2,500 people 24 miles west of Fargo. But one occurred in downtown Lynchburg, Va., forcing the evacuation of much of the downtown in a city with 78,000 residents. In response, railroads agreed to slow oil trains to 40 miles an hour in urban areas, and federal regulators have proposed a broader speed limit for older tank cars carrying volatile crude oil. The rules don't apply to other freight trains or Amtrak trains that share tracks in Newark with oil trains; about 85 Amtrak trains run through Newark every day, according to a spokesman, at speeds of up to 100 miles an hour. In addition to Norfolk Southern, which operates on the outskirts of town, CSX runs oil trains on a wholly separate track heading north toward refineries near Philadelphia. Without oil trains, the local PBF Refinery might not be operating. Opened in 1956 on the Delaware River, the refinery handled imported oil that arrived by water from overseas; it was mothballed in 2009 as the economics of importing crude oil soured and demand for gasoline slumped. PBF bought the refinery in 2011, reopened it the next year and began adding facilities to unload crude from trains. The company owns or leases 4,000 tank cars, has 1,900 more on order and said it is committed to using the safest cars available. The refinery built a double loop that can accommodate two trains, each holding 70,000 barrels of crude. It can take workers 14 hours to unload each train by connecting hoses to drain out the cargo. The Bakken crude contains a lot of butane, making it volatile but useful for mixing with heavier oils or as a refined byproduct, said refinery manager José Dominguez. On a recent afternoon, the refinery was running mostly Bakken oil, along with some diluted crude from Canadian oil sands and a ship's worth of light sweet oil from Basra, Iraq. When Norfolk Southern began routing crude trains through Newark, it didn't notify the local emergency officials. Last March, a year after trains started turning up, Fire Chief A.J. Schall sat down with officials from the railroad and refinery to discuss the crude shipments. "It shows a lack of communication," he said. By the summer, Norfolk Southern and PBF paid for Mr. Schall and another local fire chief to fly to Colorado and attend a three-day class on crude-by-rail trains. Some people who live and work along the tracks say that they are disquieted by the increased traffic and especially of the new presence of mile-long strings of black tanker cars, but unaware of any new accident-preparedness plans. Demitri Theodoropoulos, who manages a record store facing the intersection, said that since 2004 his security cameras have recorded 14 collisions, including one in 2012 when a train smashed into a large truck. "We have major, major freight traffic here," he said. "I see trains with crude every day or so. I don't like it, but this is the way it is." Write to Russell Gold at Credit: By Russell Gold
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629825754
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629825754?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Malaysia Stocks Slipping on Oil Slide; Malaysia Market Facing Biggest Fall Since Global Financial Crisis
Author: Jake Maxwell Watts
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
If inflation stays low in Malaysia, as Credit Suisse says is likely, it would reduce the chances of an interest-rate increase by the central bank, which analysts say wouldn't want to risk further jeopardizing a slower rate of economic growth. Raymond Lim, head of Asian bonds at Amundi in Singapore, said he is optimistic that the inflation consequences of the Malaysian government's decision this year to cut fuel subsidies will be offset by falling oil prices.\n
Full text: One of the biggest victims of is Malaysia, Asia's top crude exporter, where the stock market is on track for its first annual decline since the global financial crisis and ranks as the region's worst performer this year. The FTSE Bursa Malaysia KLCI has fallen 6.5% in 2014, the only market in Southeast Asia to record a loss for the year, as investors look instead to markets such as India and Indonesia and dump holdings in oil-related stocks. The ringgit has also suffered, dropping to 3.4470 per U.S. dollar on Thursday, its weakest level in nearly five years. Yields on 10-year government bonds have risen to 3.89%, from a 12-month low of 3.78% in mid-October. Bond yields rise as prices fall. "Malaysia is one of the weakest markets within the region. In the context of drops, it is not very large. But relative to the traditional low beta of the market, it is a big move," said Gan Eng Peng, head of equity at Affin Hwang Asset Management Bhd. in Malaysia, referring to a measure of volatility. The firm is selling out of oil-and-gas companies and moving into stocks that may benefit from lower oil prices. It is also increasing its holdings of cash to more than 20% in most of its funds, a high level for almost any manager. As Asia's biggest exporter of crude oil, Malaysia is first in the firing line for investors looking to protect themselves from a slump in global oil prices. Brent crude, the global benchmark, was down 84 cents at $69.08 a barrel Thursday morning in New York, on track to settle at a five-year low. Oil prices have dropped steadily in recent months on demand weakness and competition from other energy sources, especially U.S. shale oil and gas. Crude prices were hit further last week after the Organization of the Petroleum Exporting Countries, or OPEC, decided . Malaysia's central bank on Thursday reminded local lenders to ensure that all short-dated transactions involving the ringgit--typically regarded as those that drive currency volatility--are backed up by documentation. A spokesperson said the note was a reminder of existing requirements. Malaysia's main stock index hasn't clocked a full-year loss since the financial crisis hit in 2008 and the index lost 39%. Since then, it has risen more than 10% every year with the exception of 2011, when it rose 0.8%. The losses in the past week have even the most bullish of fund managers turning away. Eastspring Investments, which manages about 28 billion ringgit ($8.1 billion) in Malaysian equities, says it has been selling stocks and turning to cash in a bid to lock in profit. "Our view on the small caps has turned quite cautious," said Yvonne Tan, chief investment officer. "Quite a number of corporates are missing their forecasts, so we are actually quite selective." Eastspring is holding more cash in its funds and waiting for the market to bottom out before it starts looking to buy again, Ms. Tan said. Malaysia's largest listed oil-and-gas services provider, SapuraKencana Petroleum Bhd., has been among the biggest losers, dropping 20% in the two days after the OPEC decision and now trading at its lowest level in more than four years. Another oil-related stock, state-controlled Petronas Dagangan Bhd., has fallen more than 6% since the Nov. 27 OPEC meeting. Petronas Dagangan's parent company, state-owned Petroliam Nasional Bhd., is by as much as 20%, according to its chief executive, who told media last week that it may also trim its dividend payments to the government. Petronas, as the parent company is also known, contributes about $10 billion each year to the national budget and is Malaysia's sole Fortune 500 company. Analysts warn that, over the longer term, the impact on Malaysian stocks will be felt in nonoil industries, too. Credit Suisse says that if oil prices remain at $70 a barrel, Malaysia's economic growth could slow to 4.4% next year, well below the 5% to 6% expected by the central bank for this year. Saudi Arabia, OPEC's largest producer of crude oil, , The Wall Street Journal reported Wednesday. If inflation stays low in Malaysia, as Credit Suisse says is likely, it would reduce the chances of an interest-rate increase by the central bank, which analysts say wouldn't want to risk further jeopardizing a slower rate of economic growth. That would make the ringgit a less attractive prospect than many other Asian currencies, while other central banks in the region contemplate raising rates. Some fund managers are sticking to the original script, however. Raymond Lim, head of Asian bonds at Amundi in Singapore, said he is optimistic that the inflation consequences of the Malaysian government's decision this year to cut fuel subsidies will be offset by falling oil prices. Amundi is cautious on Malaysian government bonds, but still likes the ringgit. It expects the central bank to raise interest rates in the first quarter next year. It isn't just oil prices that are contributing to the malaise in Malaysia. Maybank Investment Bank research, which covers 74% of the Malaysian bourse by market capitalization, calculates that core net profit for the companies it tracks contracted an average of 5.5% year-on-year in the third quarter. Affin Hwang's Mr. Gan said the only good news could be that nonoil-related stocks may be suffering more than is justified. However, with share prices down, oil prices lower and capital expenditures being cut, he expects more business and financial disruptions to come. "A credit crunch within the oil-and-gas space is a possibility," he said. Jason Ng contributed to this article. Credit: By Jake Maxwell Watts
Subject: Crude oil prices; Petroleum industry; Crude oil; Stock exchanges; Investments; Economic crisis; Central banks; Natural gas utilities
Location: India United States--US Malaysia Indonesia Southeast Asia
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Eastspring Investments; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629870095
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629870095?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
MoneyBeat / Market insight from WSJ.com: Oil Bear Cleans Up on Spill --- Trilogy Has Returned 8% This Year
Author: Wirz, Matt
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: C.5.
Abstract:
The thesis behind the trade was that companies that borrowed heavily to finance costly drilling, like extracting oil from tar sands in the Canadian tundra, would become cash-flow negative if oil prices fell for a prolonged period.
Full text: The selloff in bonds issued by energy companies continued this week but at least one investor isn't terribly bothered by the downturn: Barry Kupferberg, head of research at $250 million credit hedge fund Trilogy Capital. This spring, the firm founded by former Bear Stearns bond salesman Jonathan Rosenstein made large short bets against bonds of energy companies with high production costs, expecting that slowing demand from China would depress oil prices. The thesis behind the trade was that companies that borrowed heavily to finance costly drilling, like extracting oil from tar sands in the Canadian tundra, would become cash-flow negative if oil prices fell for a prolonged period. The bearish wagers helped Trilogy post a positive return in September when the average hedge fund lost 0.89%. The firm has returned about 8% this year through October, almost three times the hedge-fund average of 3%, according to data provider HFR Inc. Some energy-company bonds have fallen more than 50% in the past three months but Trilogy remains bearish for now, Mr. Kupferberg says. "Usually when these downturns end, they don't end until you see real capitulation, meaning bankruptcies." One company that is struggling is Quicksilver Resources Inc., an independent oil-and-gas producer that borrowed about $1.8 billion in 2008 to pay for a large acquisition. The company violated minimum performance covenants in its bank loans earlier in the year and prices of its bonds have fallen to 20 cents on the dollar from around 90 cents in August on concerns that it will default. Quicksilver has hired investment banks to explore asset sales, while bondholders have hired Moelis & Co. to advise on a potential restructuring of the company's debt, a person familiar with the matter said. Credit: By Matt Wirz
Subject: Petroleum industry; Return on investment; Hedge funds
Location: China
Company / organization: Name: Quicksilver Resources Inc; NAICS: 211111; Name: Moelis & Co; NAICS: 523110; Name: Bear Stearns Cos Inc; NAICS: 523120, 523140; Name: Trilogy Capital Partners Inc; NAICS: 541820
Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.5
Publication year: 2014
Publication date: Dec 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629872572
Document URL: https://login.ezproxy.uta.edu/login?u rl=https://search-proquest-com.ezproxy.uta.edu/docview/1629872572?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Canadian Oil Sands to Slash Payout
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: B.2.
Abstract:
Six other companies own the remaining interest, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.
Full text: CALGARY -- Canadian Oil Sands Ltd., the largest owner of the giant Syncrude oil-sands joint venture, said Wednesday it plans to slash its dividend by nearly half to cope with a rising debt load and the recent swoon in global prices for crude oil. The Calgary-based company said its per-share dividend payment will drop to 20 Canadian cents, or about 18 U.S. cents, in the fourth quarter, down 43% from the 35 Canadian cents a share it paid investors in the third quarter. It said the move was necessary to stabilize its balance sheet in a lower oil price environment. "At the current dividend level, net debt would grow at a pace that would quickly exceed $2 billion," Canadian Oil Sands said in a statement. Net debt stood at C$1.7 billion as of September 30, the company said when it reported third-quarter earnings in October. Canadian Oil Sands projected cash flow from operations in 2015 of C$730 million, or C$1.51 a share, assuming a price of $75 a barrel for West Texas Intermediate crude oil. That is down sharply from the C$1.27 billion, or C$2.62 a share, it expects to earn this year, based on a WTI price of $85 to $103 a barrel. The company also said it plans to increase crude production about 6% next year to between 35 and 40 million barrels of oil and reduce 2015 capital spending to C$564 million, down from an estimated C$938 million this year. It said the lower budget stemmed from the completion of several major reinvestment projects. Canadian Oil Sands, which reported a 65% drop in third-quarter net profit, has struggled to cope with a series of unplanned outages at Syncrude's surface-mining operations. Canadian Oil Sands owns a 37% stake in Syncrude, its main operating asset and one of the largest and oldest oil-sands producers. Six other companies own the remaining interest, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company. Credit: By Chester Dawson
Subject: Oil sands; Petroleum industry; Debt restructuring; Dividends
Location: United States--US Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Canadian Oil Sands Ltd; NAICS: 211111
Classification: 9172: Canada; 8510: Petroleum industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Dec 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629872905
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629872905?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia to Pump Up Oil Exports to Asia
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
[...]investors have raised concerns about Russia's ability to meet its target due to the lack of adequate supply infrastructure and investment, Western sanctions and the recent drop in that puts oil production at risk Earlier this year, U.S. and Europe had imposed sanctions against Moscow for causing unrest in Ukraine, cutting off financing and technological support for offshore and Arctic exploration.
Full text: SINGAPORE--Russia plans to keep increasing its oil exports to Asia despite plummeting oil prices and , even as its oil supplies to the region hit this year. Russia is making a strategic push to increase its energy exports to Asia, as energy demand in its traditional markets in Europe has stagnated and its relationship with countries there has been strained by sanctions over Moscow's role in the conflict in Ukraine. Russia's oil exports to Asia have been spearheaded by the East Siberia-Pacific Ocean, or ESPO, since 2009. The pipeline feeds directly into northern China and up to the port of Kozmino in eastern Russia where crude is loaded on ships to supply the rest of Asia "We do not expect a drop in production that will be going eastward," Alexander Gladkov, director at the oil and gas production and distribution arm of Russia's energy ministry, said Wednesday. He was speaking at the OSEA 2014 Conference in Singapore. An increase in Russian crude supply to Asia allows countries such as China and Japan to reduce their reliance on Middle Eastern oil producers, and helps Moscow meet its target of sending a third of its crude exports to the east by 2020. The ESPO pipeline system toward Kozmino is being developed further to boost its total capacity to 80 million tons a year by 2018, from around 50 million tons currently, Mr. Gladkov said. But investors have raised concerns about Russia's ability to meet its target due to the lack of adequate supply infrastructure and investment, Western sanctions and the recent drop in that puts oil production at risk Earlier this year, U.S. and Europe had imposed sanctions against Moscow for causing unrest in Ukraine, cutting off financing and technological support for offshore and Arctic exploration. Oil prices have also fallen by around 35% since June, erasing margins for oil producers with high costs and threatening to trigger large spending cuts by oil and gas companies. "From our point of view there should not be any change in production volumes due to oil prices," Mr. Gladkov said, since the raft of oil export projects in Russia were based on an oil price much lower than $100 a barrel. "The decision to transport more [oil] eastward and expand capacity is without any doubt linked to the availability of an array of [oil] fields that are feeding or will potentially be feeding into the system," he added. He said Russia's oil and gas reserves in western Siberia are gradually depleting and the country's key oil producing region is now eastern Siberia, whose energy output is aimed at Asian markets. Russian oil exports through the ESPO pipeline have averaged around 820,000 barrels a day so far this year, a record high, according to Argus Media Ltd., an oil pricing agency. This will top 1.1 million barrels a day next year and the new supply can be sold via the port of Kozmino, Sergey Andronov, vice president of Russian pipeline company OAO Transneft said. Seaborne oil exports via Kozmino have been widely bought by China, Japan, South Korea, Philippines, Thailand, Singapore, Australia, New Zealand and Taiwan. Last year, state-run oil producer OAO Rosneft signed with China National Petroleum Corp. to double oil supply to 600,000 barrels a day from 2018 for 25 years. Russian oil has been also making its way to Asia through the Sakhalin project in the east, and a swap agreement with Kazakhstan and China that took effect this year. Write to Eric Yep at Credit: By Eric Yep
Subject: Pipelines; Petroleum industry; Oil reserves; Exports; Sanctions; Prices; Petroleum production; Natural gas utilities
Location: China Japan Asia Europe Ukraine
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629874120
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629874120?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudis: Oil to Firm at $60 --- Shift by OPEC's Biggest Producer Suggests It Won't Push for Supply Reductions
Author: Said, Summer; Kent, Sarah; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: C.1.
Abstract:
The change in Saudi mind-set also suggests OPEC members may have to adapt swiftly to shifts in the oil market caused by a surge in supply from the U.S. shale revolution and slowing global demand growth.
Full text: LONDON -- OPEC's biggest oil producer, Saudi Arabia, now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation. The shift in Saudi thinking suggests the de facto leader of the Organization of the Petroleum Exporting Countries won't push for supply cuts in the near term, even if oil prices fall further. Brent crude dropped 62 cents a barrel to $69.92 on Wednesday. The change in Saudi mind-set also suggests OPEC members may have to adapt swiftly to shifts in the oil market caused by a surge in supply from the U.S. shale revolution and slowing global demand growth. As recently as early November, OPEC officials were talking about $70 a barrel as the sustained level at which there would be panic within its ranks. The Gulf states "don't have a price target, and if prices drop further below $60, it won't be for a long time," a Gulf oil official said. Before last week's OPEC meeting in Vienna, the Saudis had been considering a Venezuelan proposal to cut the producer group's oil output sharply. The possible deal finally fell apart when Russia, a major oil producer that isn't a member of OPEC, refused to participate in a general supply cut, said people familiar with the situation. That gave Saudi Arabia and its Gulf allies cover to push an unpopular strategy at OPEC's main meeting last Thursday of not changing the cartel's production target, in an attempt to defend market share rather than prices. That view prevailed, leading Brent crude to fall 10% in the past week. Analysts said the new insight into Saudi Arabia's views on the oil market was likely to keep prices subdued in the coming months and would thwart chances for a strong rebound. "It's just another factor that solidifies the bearish outlook," said Kyle Cooper, managing partner of research consultancy IAF Advisors in Houston. The Saudis "have seen their market share be continually diminished, especially in the U.S., and I think they've grown weary of it." During an early November meeting on the Venezuelan resort island of Margarita, Saudi Arabia's oil minister, Ali al-Naimi, had told Venezuela Foreign Minister and OPEC representative Rafael Ramirez he would support a cut only if the Venezuelan minister could persuade others inside and outside of the cartel to participate, according to people familiar with the situation. It was a "mission impossible," said one OPEC delegate. Struggling OPEC members like Iran, Libya and Iraq argue they should be exempted from any move to cut output. Historically, persuading non-OPEC members to join the group in reducing supply has met with limited success. However, just 48 hours before OPEC's semiannual meeting last Thursday, Mr. Ramirez gathered senior energy officials from Saudi Arabia, Russia and Mexico -- another non-OPEC member -- in Vienna's Hyatt hotel. On the table was a proposal to take two million barrels a day of oil supply out of the global market of more than 90 million barrels a day, according to people familiar with the situation. The bulk of the cut was to be shouldered by OPEC, but Russia and Mexico combined were expected to contribute a reduction of 500,000 barrels a day, the people said. The meeting ended without any deal to cut supply, Mr. Ramirez told reporters immediately afterward. Within hours, Russian state oil company OAO Rosneft said it wouldn't cut its oil output. Mr. al-Naimi finally decided it would be better to endure short-term pain from low oil prices than risk losing market share in the long run, according to people familiar with the situation. "The market will stabilize itself eventually," he told reporters. He conveyed this message first to his Gulf allies -- countries such as Kuwait and the United Arab Emirates -- and then during a four-hour debate among all of OPEC's ministers last Thursday, according to delegates briefed on the gathering. Mr. al-Naimi rebuffed calls led by Venezuela for the oil-producing cartel to reduce its output by 5%, arguing it would cost OPEC market share without guaranteeing prices would improve, the people said. He told the ministers enduring lower prices would force high-cost oil producers outside of OPEC, like U.S. shale-oil companies, to cut production themselves, tightening the market by the second half of 2015.
Credit: By Summer Said, Sarah Kent and Benoit Faucon
Subject: Petroleum industry; Cartels; Market shares; Price stabilization; Crude oil prices
Location: Russia United States--US Saudi Arabia
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629893387
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629893387?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Hiding in Plain Sight: Shale Oil's Secret Routes to Market
Author: Gold, Russell
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Dec 2014: A.1.
Abstract:
[...]nobody initially notified the city's fire chief about the new line, which can carry more than a hundred thousand barrels of oil a day along Amtrak's busiest passenger-rail corridor.
Full text: NEWARK, Del. -- Early last year, a new kind of pipeline full of volatile oil appeared in this college town, halfway between Philadelphia and Baltimore. If it had been a traditional pipeline, there would have been government hearings and environmental reviews. There would be markers or signs along the line's route and instructions for nearby residents on how to react in an emergency. A detailed plan for responding to a spill would be on file with the federal government. None of that happened here in Newark. In fact, nobody initially notified the city's fire chief about the new line, which can carry more than a hundred thousand barrels of oil a day along Amtrak's busiest passenger-rail corridor. This was possible because the oil here is transported by a virtual pipeline: mile-long strings of railroad tanker cars that travel from North Dakota to a refinery in Delaware. In Newark, the cars are especially easy to spot as they often sit for hours on tracks 10 feet away from passing passenger trains, waiting for an opening at the nearby PBF Energy Inc. plant. While the existence of this virtual pipeline is obvious to its neighbors -- trains are visible from homes, the local commuter rail station, a park and a popular jogging trail -- it is officially secret. Delaware Safety and Homeland Security officials contend that publicizing any information about the oil trains parked there would "reveal the State's vulnerability to terrorist attacks," according to a letter to The Wall Street Journal. Finding the locations of oil-filled trains remains difficult, even in states that don't consider the information top secret. There are no federal or state rules requiring public notice despite several fiery accidents involving oil trains, including one in Lac-Megantic, Quebec, that killed 47 people. The desire for secrecy seems wrongheaded to some experts. "If you don't share this information, how are people supposed to know what they are supposed to do when another Lac-Megantic happens?" asked Denise Krepp, a consultant and former senior counsel to the congressional Homeland Security Committee. She said more firefighting equipment and training was needed urgently. "We are not prepared," she said. In May, federal regulators ordered railroads to tell states about the counties traversed by trains carrying combustible crude oil from the Bakken Shale in North Dakota so local first responders could be notified. The Journal submitted open-records requests to all 48 contiguous states and the District of Columbia and received at least some information from all but 14: Colorado, Delaware, Idaho, Indiana, Louisiana, Maine, Maryland, Michigan, Nevada, Ohio, Tennessee, Texas, Vermont and West Virginia. Mapping data received from the disclosing states, the Journal found a lot of other cities in the same situation as Newark. On its way to refiners on the East Coast and along the Gulf of Mexico, oil often sits in tank cars in railroad yards outside Harrisburg and Pittsburgh, Penn., and passes through Cleveland, Chicago, Albany, Seattle and a dozen other cities. Bakken oil is flowing in two directions from North Dakota: west toward Portland and the Puget Sound; and east through Minneapolis, then southeast through Chicago, and across the northern edge of Indiana and Ohio. There it splits into three routes: One heads to Albany; another goes to Yorktown, Va., where the crude is transferred to barges for trips up and down the East Coast. The third heads to Philadelphia through Ohio, which is one of the states that doesn't disclose data, but the Journal was able to deduce the routes by following available maps. Other oil trains run south from Oregon to California, from Minnesota to Texas, and from Wisconsin toward the Gulf Coast. Maryland previously had attempted to release oil-train information, but was successfully sued by Norfolk Southern Corp. and CSX Corp. Norfolk argued that these trains were carrying "highly volatile cargo" that could be a target for terrorists. Railroads have continued to press for secrecy; in August, the Association of American Railroads and the American Short Line and Regional Railroad Association wrote a confidential letter to the federal government asking that routing information be kept from the public. The request was denied. "The rail industry is concerned making crude oil route information public elevates security risks by making it easier for someone intent on causing harm," said AAR spokesman Ed Greenberg. The group said it supports sharing information with local officials. Neither the oil nor the railroad industry anticipated the rapid and dramatic rise of oil shipments by train. In 2009, U.S. railroads transported about 21,000 barrels a day of oil; today they carry 1.1 million barrels a day, according to data from the Surface Transportation Board, a federal regulator. Last year, railroads generated about $2.15 billion in revenue from moving crude. Shipments of hazardous material, especially crude oil, have soared recently, even for railroads whose routes are far from the oil fields of North Dakota. Norfolk Southern and CSX, which serve the East Coast, moved 53,001 carloads of oil in the three months ended September, compared with just seven carloads during the same period of 2009, according to data from the federal Surface Transportation Board. They transported 156,731 carloads of industrial chemicals, some of which are hazardous, in the third quarter of this year, up 8% from five years ago. Trains are the new pipelines, and have become a vital link in the energy infrastructure, said Dave Pidgeon, a spokesman for Norfolk Southern. "We are the keystone, the bridge, between the source of where the energy is extracted and where it is refined," he said. Moving hazardous material like crude, he added, is "safe and getting safer." CSX didn't respond to requests for comment. Trains offer the energy industry flexibility to move oil where it can fetch the highest prices. Building the needed loading and unloading terminals is fast and inexpensive, and an extensive rail network connects the Midwest to the East and West coasts. While these virtual pipelines can be created in months, traditional pipelines have become increasingly difficult to install as environmental groups seek to block permits for new energy infrastructure. "What we are seeing on rail is largely due to opposition to and uncertainty around building pipelines," said Brigham McCown, who was the chief pipeline regulator under President George W. Bush. Pipelines, he adds, are far safer than trains. Since Lac-Megantic, several trains have derailed and exploded. Most of these accidents have happened in relatively rural areas like Casselton, N.D., a town of about 2,500 people 24 miles west of Fargo. But one occurred in downtown Lynchburg, Va., forcing the evacuation of much of the downtown in a city with 78,000 residents. In response, railroads agreed to slow oil trains to 40 miles an hour in urban areas, and federal regulators have proposed a broader speed limit for older tank cars carrying volatile crude oil. The rules don't apply to other freight trains or Amtrak trains that share tracks in Newark with oil trains; about 85 Amtrak trains run through Newark every day, according to a spokesman, at speeds of up to 100 miles an hour. In addition to Norfolk Southern, which operates on the outskirts of town, CSX runs oil trains on a wholly separate track heading north toward refineries near Philadelphia. Without oil trains, the local PBF Refinery might not be operating. Opened in 1956 on the Delaware River, the refinery handled imported oil that arrived by water from overseas; it was mothballed in 2009 as the economics of importing crude oil soured and demand for gasoline slumped. PBF bought the refinery in 2011, reopened it the next year and began adding facilities to unload crude from trains. The company owns or leases 4,000 tank cars, has 1,900 more on order and said it is committed to using the safest cars available. The refinery built a double loop that can accommodate two trains, each holding 70,000 barrels of crude. It can take workers 14 hours to unload each train by connecting hoses to drain out the cargo. The Bakken crude contains a lot of butane, making it volatile but useful for mixing with heavier oils or as a refined byproduct, said refinery manager Jose Dominguez. On a recent afternoon, the refinery was running mostly Bakken oil, along with some diluted crude from Canadian oil sands and a ship's worth of light sweet oil from Basra, Iraq. When Norfolk Southern began routing crude trains through Newark, it didn't notify the local emergency officials. Last March, a year after trains started turning up, Fire Chief A.J. Schall sat down with officials from the railroad and refinery to discuss the crude shipments. "It shows a lack of communication," he said. By the summer, Norfolk Southern and PBF paid for Mr. Schall and another local fire chief to fly to Colorado and attend a three-day class on crude-by-rail trains. Some people who live and work along the tracks say that they are disquieted by the increased traffic and especially of the new presence of mile-long strings of black tanker cars, but unaware of any new accident-preparedness plans. Demitri Theodoropoulos, who manages a record store facing the intersection, said that since 2004 his security cameras have recorded 14 collisions, including one in 2012 when a train smashed into a large truck. "We have major, major freight traffic here," he said. "I see trains with crude every day or so. I don't like it, but this is the way it is." (See related letters: "Letters to the Editor: We Must Transport Our Shale-Oil Bounty With Safety" -- WSJ Dec. 15, 2014) Credit: By Russell Gold
Subject: Pipelines; National security; Railroads; Oil shale; Railroad accidents & safety
Location: California Delaware North Dakota United States--US
Company / organization: Name: Amtrak; NAICS: 482111; Name: PBF Energy; NAICS: 324110; Name: Norfolk Southern Corp; NAICS: 482111
Classification: 9190: United States; 8510: Petroleum industry; 8350: Transportation & travel industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 4, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629893683
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629893683?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Futures Slide on Saudi Price Cut to U.S. Ample Global Supplies Weigh on Oil Prices
Author: Friedman, Nicole; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
The U.S. Energy Information Administration said Thursday that the country's proven reserves of crude oil and condensate - the resources that are recoverable with current technology and prices - rose to 36.5 billion barrels in 2013, the highest level since 1974.
Full text: The global oil benchmark slid to a fresh more-than-four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S., reinforcing concerns that the kingdom is more concerned with maintaining market share than raising prices. Oil prices have slumped for months as global supply growth, particularly from the U.S., has outpaced demand. The Organization of the Petroleum Exporting Countries, of which Saudi Arabia is the biggest producer, decided last week . The cartel has lowered production to raise prices in the past, and its decision to maintain its output target sent prices tumbling. State-run oil company Saudi Aramco on Thursday by between 10 and 90 cents a barrel. The company also lowered its prices to Asia and raised them for Northwest Europe and the Mediterranean. "The Saudis are making it very clear that they're going to do whatever it takes to maintain market share," said Phil Flynn, analyst at the Price Futures Group in Chicago. "If it means taking prices to $60 a barrel or $50 a barrel, they're prepared to do whatever it takes." Brent, the global benchmark, slid 28 cents, or 0.4%, to $69.64 a barrel on ICE Futures Europe, the lowest settlement since May 25, 2010. U.S.-traded light, sweet oil for January delivery fell 57 cents, or 0.9%, to $66.81 a barrel on the New York Mercantile Exchange. Saudi Arabia now believes oil prices , a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation. That suggests the de facto OPEC leader won't push for supply cuts in the near term, even if oil prices fall further. Another Saudi price cut to the U.S. is "tantamount to a declaration of war to U.S. shale-oil producers, in view of the significant decline in the price of the benchmark [U.S. oil]," said Commerzbank in a note. "U.S. shale-oil producers already find themselves confronted with very low prices." U.S. oil production has soared above 9 million barrels a day for the first time in decades due to new technologies enabling producers to access supplies trapped in shale-oil fields. The U.S. Energy Information Administration said Thursday that the country's proven reserves of crude oil and condensate - the resources that are recoverable with current technology and prices - rose to 36.5 billion barrels in 2013, the highest level since 1974. However, prices have fallen in recent months to levels that could threaten the viability of shale production. Some companies have already reduced capital expenditure plans for next year. January reformulated gasoline blendstock, or RBOB, fell 1.22 cents, or 0.7%, to $1.7948 a gallon, the lowest level since Oct. 9, 2009. January diesel fell 1.57 cents, or 0.7%, to $2.1177 a gallon, the lowest settlement since Sept. 23, 2010. Write to Nicole Friedman at and Summer Said at Credit: By Nicole Friedman And Summer Said
Subject: Petroleum industry; Market shares; Petroleum production; Price cuts
Location: United States--US Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629921782
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629921782?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia Cuts All January Crude Oil Prices to U.S., Asia; Saudi Aramco Cuts January Arab Light Prices to Asia By $1.9 a Barrel
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
[...]in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy.
Full text: Saudi Arabia, the world's largest oil exporter, deepened the discount at which it sells crude to Asia and the U.S., underscoring for some market watchers the kingdom's commitment to defending its market share amid the recent rout in oil prices. The move comes a week after Riyadh persuaded fellow OPEC members to maintain the group's production target, instead of reining in output significantly to support prices. Brent crude, the global benchmark, slid 0.4% to $69.64 a barrel on the news, reversing earlier gains. That's the lowest level since May 2010 and brings Brent's year-to-date decline to 37%. U.S. crude-oil prices dropped 0.8% to $66.81 a barrel, but remained above the more-than five-year low hit Nov. 28. State-owned Saudi Aramco Oil Co., also known as Saudi Aramco, said Thursday that it had reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It dropped prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel. Thursday's discounts to Asia "would herald in a new round in the battle for market shares," said Carsten Fritsch, an analyst at Commerzbank. He said the U.S. discounts were "tantamount to a declaration of war to U.S. shale oil producers," given the steep fall already in U.S. benchmark prices. Aramco, however, raised prices for all crude grades to Northwest Europe and Mediterranean destinations by between 20 cents and 50 cents a barrel compared with the December prices. Saudi Aramco sets its prices relative to regional benchmark crude-oil prices. It sells at different prices in different regions mainly to reconcile buyer demand with market fluctuations in those benchmarks. The price-setting process is typically a technical move with little impact on the broader market. But in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy. Saudi Arabia, the biggest producer by far in the Organization of the Petroleum Exporting Countries, and its Gulf allies pushed the group at its Nov. 27 meeting . People familiar with the matter said Riyadh argued that Aramco also cut its U.S. pricing last month, . The Wall Street Journal reported Wednesday that a level both it and other Gulf producers believe they could withstand. The shift in Saudi thinking suggests the country won't push for supply cuts in the near term, even if oil prices fall further. Kuwait's deputy finance minister, Khalifa Hamada, said at a local news conference on Thursday that the country was likely to base its 2014-2015 budget on an oil price of $55 to $60 a barrel. Write to Summer Said at Credit: By Summer Said
Subject: Petroleum industry; Crude oil prices; Price increases
Location: United States--US Asia Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629928861
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629928861?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Eases After ECB Leaves Policy Unchanged; ECB Abstains From Stimulus, Citing Lower Oil Prices
Author: Shumsky, Tatyana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
NEW YORK--Gold futures ended lower Thursday after the European Central Bank stood pat on monetary policy and as investors brace for upcoming U.S. employment data.
Full text: NEW YORK--Gold futures ended lower Thursday after the European Central Bank stood pat on monetary policy and as investors brace for upcoming U.S. employment data. Gold for February delivery, the most actively traded contract, fell $1, or 0.1%, to settle at $1,207.70 a troy ounce on the Comex division of the New York Mercantile Exchange. ECB officials left interest rates unchanged and refrained from announcing new stimulus efforts. ECB President Mario Draghi, in a news conference following the decision, highlighted weaker oil prices as one reason the central bank abstained from action. Mr. Draghi said the precipitous drop in energy costs is having a meaningful impact on the economy and needs further study. Mr. Draghi also said ECB officials discussed buying all assets but gold for monetary easing purposes, rebuffing some investors who hoped the central bank would add to its hoard of the precious metal as part of its easing measures. "They've said in the past that they wouldn't buy gold, but (Draghi's comments) added a lot of volatility to gold this morning," said George Gero, a senior vice president with RBC Capital Markets Global Futures. Gold prices also fell as investors who bet the ECB would be more dovish on monetary policy by buying gold ahead of the decision sold off those positions on disappointment, said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago. "Gold's going to keep moving lower after the announcement as people look forward to tomorrow's jobs data," Mr. Haberkorn said. The U.S. labor market's monthly scorecard, due at 8:30 a.m. EST Friday, is followed by gold traders seeking insight into the Federal Reserve's policy plans. The U.S. central bank has highlighted employment as a key metric for raising interest rates. Gold prices have benefited from the Fed's protracted easy-money policies, as the yellow metal doesn't earn interest or dividends and has an easier time competing with interest-bearing assets like Treasury bonds when rates are pinned at zero. Platinum futures hit a one-month high, helped by a stronger euro. Platinum is widely used in automotive exhaust filters in Europe. The January contract rose 1.5% to $1,245.90 a troy ounce, the highest since Oct. 30. Write to Tatyana Shumsky at Credit: By Tatyana Shumsky
Subject: Central banks; Gold markets; Monetary policy; Interest rates; Futures
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629936268
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629936268?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Alfa to Team Up With Pacific Rubiales on Mexico Energy Projects; Joint Venture to Bid in Mexico's Opening Round of Oil and Gas Blocks Early Next Year
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican conglomerate Alfa SAB said Thursday it has reached an agreement to form a joint venture with Canada-based Pacific Rubiales Energy Corp. to bid in Mexico's first round of oil and gas blocks and pursue other energy projects in the country. The planned joint venture, in which each partner will hold a 50% stake, will study bidding in the opening round of blocks that the Mexican government is expected to begin tendering early next year. It will also consider acquiring service contracts with a view to migrating them to exploration-and-production contracts, and developing other energy-related businesses including midstream projects, Monterrey-based Alfa said in a press release. Midstream activities include transportation, pipelines and wholesale marketing of petroleum products. Alfa has close to a 20% stake in Pacific Rubiales, which has exploration and production operations in Colombia, Peru and other Latin American countries, and has expressed its intention of participating in the opening of Mexico's oil sector. "This agreement is in line with our strategy to actively participate in the Mexican oil and gas industry, contributing to raise the competitiveness of its industrial sector by increasing the availability of energy resources," said Alfa, which has petrochemicals, auto parts, food and telecommunications businesses, in addition to shale oil and gas production in Texas. "We see a great opportunity for our two companies to have a strong position in the Mexican market." Alfa shareholders recently approved a plan for the company to raise up to $1.2 billion for energy projects through the sale of new stock. Pacific Rubiales has said it has $1 billion earmarked for Mexico projects. The changes in Mexico's energy laws, including constitutional amendments to end state oil company Petróleos Mexicanos's 76-year monopoly on the industry, is seen as the cornerstone of the structural changes that the administration of President Enrique Peña Nieto passed in its first two years. The first bidding round includes a broad range of projects, such as mature oil fields, nonconventional reserves like shale oil and gas, deep-water drilling in the Gulf of Mexico, and shallow water projects. Pemex, which was assigned around four-fifths of Mexico's proven and probable reserves ahead of the bidding, also plans to farm out some existing projects. Existing service contracts can also be switched to exploration and production contracts. Alfa is among the Mexican companies with experience in the energy field that are expected to benefit from the opening of the oil sector, as private and foreign companies are allowed to explore for and produce oil for the first time since the 1938 oil nationalization. Grupo Carso, the industrial and retail conglomerate controlled by billionaire Carlos Slim, recently reorganized its energy-related assets into a separate unit with drilling, exploration and production, leasing of rigs, and renewable electricity assets. Write to Anthony Harrup at Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1629979104
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1629979104?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Slump Threatens Norway's Economy; GDP to Suffer From Cuts in Oil-Investment Spending, Survey Shows
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract: None available.
Full text: OSLO--A sharp drop in oil prices since the summer is creating a heap of trouble for Norway. Big investments in the oil sector have helped keep the Nordic country's economy humming along in recent years while many of its European peers faced sluggish growth or even recession. But signs are piling up that one of the world's wealthiest petro-economies is in for a significant slowdown. A survey by Statistics Norway on Thursday said oil companies expect to reduce investment spending by 14% next year, which it said could drag the country's economic growth down to 1% from an estimated 2.6% this year. The dire forecast comes days after a leading sector trade union threatened to strike unless Norway's right-wing government acts to counter slowing activity and job cuts in the oil industry. Norway's oil companies are already showing the strain. Statoil ASA, a 67% state-owned oil giant, has delayed major projects and said it will seek to slash costs by $1.3 billion a year from 2016. Last week Oslo-listed offshore rig owner Seadrill cancelled its dividend, sending its shares into a freefall. "We're starting to get really worried," said Hilde-Marit Rysst, head of SAFE, the union that last weekend threatened to strike unless the government acted. Ms. Rysst said the union's threat was a sign of growing frustration at delayed projects, stagnating orders and layoffs. As many as 10,000 Norwegian and foreign oil-industry workers have been laid off so far this year, analysts at DNB Markets estimate, equivalent to more than 10% of workers employed in the sector. Oil companies' spending on goods and services also generates significant economic activity in other sectors. "You can clearly say that we're worried about the future," said Arild Jenssen, SAFE union representative at Seadrill subsidiary North Atlantic Drilling Ltd., adding that more than 300 of his colleagues are set to lose their jobs by next summer. Statoil declined to comment on the strike threats, but said recent oil market volatility underscored the industry's challenges. It said it would continue with aggressive measures to cut costs. "Statoil can't sacrifice competitiveness and profitability to avoid a necessary adjustment," said Statoil spokesman Jannik Lindbæk, Jr. "We must continue our improvement work." Norway's Minister of Petroleum and Energy Tord Lien said in an email that the government understands the concerns of the employees in the petroleum industry. He said the government's most important contribution would be to provide a stable framework for investment and the award of new drilling licenses. The oil sector's troubles may contribute to weaker consumer sentiment and spending thanks to slower wage growth next year, Statistics Norway said. Still, even with a downturn, Norway is doing well relative to its European peers. The country's gross domestic product per capita from its 5 million population is 91% higher than the European Union average. "We think Norwegian growth next year will be higher than growth in the euro area, despite the shock we've had," Statistics Norway researcher Torbjørn Eika said. As Norway's oil sector struggles, other parts of its economy could prosper. Companies that export could get support from the fall in value of the Norwegian krone, which has weakened 18% against the dollar in the last six months. That could boost the competitiveness of firms such as aluminum producer Norsk Hydro ASA and fertilizer company Yara International ASA. In case of a deeper, more protracted downturn, the country could also draw on its $870 billion oil fund, built up over the last 18 years, which has enough cash to cover government spending for more than five years. In the streets of Oslo, Ole Tobias Eggen, a 53-year old computer worker at an Oslo-based brokerage, said few Norwegians are worried about their jobs yet, despite the recent oil-price drop and signs of slower growth. "We've been so incredibly lucky compared with the rest of the world that few people can imagine any other scenario," he said. "It doesn't look too bright. But I haven't heard anybody suggesting to start hoarding canned food yet," he said. Write to Kjetil Malkenes Hovland Corrections & Amplifications Norway has a right-wing government. A previous version of the story mistakenly referred to the government as center-right. at Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630028967
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630028967?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
'Pioneer' Review: Oil Rigged; A deep-sea diver finds himself under pressure from all sides in a Norwegian thriller that plumbs the depths of a North Sea oil conspiracy.
Author: Morgenstern, Joe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract: None available.
Full text: Gassiness in movies is usually an affliction. In "Pioneer" it's a plot point. The hero of this Norwegian thriller is a deep-sea diver, and the kind of gas that he and his fellow divers breathe is crucial to their survival. It's the early 1980s, soon after the discovery of vast oil reserves under the North Sea. The diver, Petter (Aksel Hennie) is part of a program of dangerous test dives meant to show that Norway can lay the undersea pipeline needed to bring the oil ashore. Petter is a high achiever, obsessed by the lure of the lower depths. Yet he's an innocent in the realm of geopolitics, and Norway, he discovers, isn't the only nation determined to cash in on the oil boom. An emerging conspiracy is dramatized erratically, with plot holes that drain suspense. What's admirable about "Pioneer" is its succession of interesting environments, both below and above the water's surface, and the quietly appealing figure at the center of the international intrigue. Petter has no guile, or hidden ambitions. Landing for the first time on the seabed, at a depth of 500 meters, he declares happily, "That's one small step for a man, but a huge leap for an ordinary guy from the projects." (Like the movie as a whole, his declaration is partly in English and partly in Norwegian.) All too soon, though, this good, sweet-spirited man is transformed into a vengeful man by a deadly accident for which he is blamed. That's when the actor who plays him unleashes the sort of power he displayed in a movie I recommended only last week, the 2011 Norwegian thriller "Headhunters." Mr. Hennie can easily pass for an ordinary guy, with his candid smile and receding hairline. But his extraordinary range gives his character what it takes to face the big guys--all of the contending, and conspiring, scientists, government officials and corporate executives who've been willing to use the divers as guinea pigs. (One of Petter's heroic distinctions is his struggle with brain damage he has suffered in the course of the test-dive program.) The director was Erik Skjoldbjærg, the excellent filmmaker who did "Insomnia"--later remade by Christopher Nolan--as well as "Prozac Nation"; the film was shot by the Swedish cinematographer Jallo Faber. The story has a basis in real life; lawsuits alleging neurological damage were brought by Norwegian divers against their government, and are still being adjudicated. But the script, credited to four writers plus the director, follows a standard thriller formula, with a Hitchcockian hero who doesn't understand what's happening to him. In a cast that includes Wes Bentley, Stephen Lang and Jonathan LaPaglia, it's Mr. Hennie who makes "Pioneer" worth watching--in a limited number of theaters, but also via video on demand and iTunes. Credit: By Joe Morgenstern
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630029056
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nigeria Cuts Budgeted Oil Price; Move Suggests Spending Cuts by the Government
Author: Cox, Josie; Akingbule, Gbenga
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Dec 2014: n/a.
Abstract:
While [we] believe that oil will recover in 2015 when the [Organization of the Petroleum Exporting Countries] eventually cuts production, the Nigerian government needs to be prudent in managing its economy.
Full text: Nigeria's finance ministry proposed a lower benchmark for the budgeted oil price, suggesting spending cuts after the commodity's relentless slide in recent weeks. Paul Nwabuikwu, a spokesman for the Ministry of Finance, said on Thursday that Africa's biggest crude producer is now budgeting for an oil price of $65 per barrel, compared with the previous estimate of $73. "In view of the present realities, we have readjusted," he said. "We hope to cut down extensively on our recurrent expenditure in the 2015 budget." Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the International Monetary Fund. So, as Brent crude prices have slipped almost 40% since June to just under $70 a barrel, the wheels have begun to come off Nigeria's economy. "The Nigerian government is catching up with the reality of where oil prices are today, said Nitesh Shah, an analyst at ETF Securities in London. "That means that budget outlays will have to be compressed. While [we] believe that oil will recover in 2015 when the [Organization of the Petroleum Exporting Countries] eventually cuts production, the Nigerian government needs to be prudent in managing its economy. That means budgeting for lower prices," he added. Nigeria, whose economy surpassed South Africa in April as the continent's largest, has striven to generate revenue beyond oil. Recent years saw promising growth in telecommunications, banks, hotels and other service businesses. But to sustain that growth, businesses say they need bigger ports, more highways and fewer blackouts that crimp factory production and curb tax revenue. A weaker naira will make it more expensive to build that infrastructure. The this week, according to traders, marking a record low. In the past few days, the currency has recovered somewhat, with traders saying the central bank has likely intervened and sold U.S. dollars. It is still down more than 12% against the dollar this year. The Nigerian all-share stock index was down 0.2% on Thursday and has fallen more than 16% year-to-date. Write to Josie Cox at Corrections & Amplifications Paul Nwabuikwu, a spokesman for the Ministry of Finance, said on Thursday that Africa's biggest crude producer is now budgeting for an oil price of $65 per barrel, compared with the previous estimate of $73. An earlier version of this article said he said this on Wednesday. Credit: Josie Cox, Gbenga Akingbule
Subject: Petroleum industry; Energy economics; Budgeting; Crude oil prices
Location: Africa Nigeria
Company / organization: Name: ETF Securities Ltd; NAICS: 523920; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 4, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633993844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633993844?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
'Peak Oil' Debunked, Again; The world relearns that supply responds to necessity and price.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
By some estimates, the price of oil needs to be as high as $90 a barrel for oil extracted from "tight" deposits such as shale, though oil market research firm IHS believes most tight oil wells have a break-even cost of between $50 and $69 dollars a barrel.
Full text: It has been 216 years since Thomas Malthus gave birth to the idea that mankind's appetite for natural resources would outstrip nature's capacity to supply them. There have since been regular warnings that the world is running out of,,,, you name it--and that population growth has become unsustainable. The warnings create a political or social panic for a while, only to be proved wrong. The latest reckoning with reality is the end of the obsession with "peak oil," which for years had serious people proclaiming that we were entering an era of permanent fossil fuels scarcity. It didn't work out that way. That's a central lesson from this year's dramatic fall in the price of oil, which reached $69.49 a barrel of Brent crude on Thursday from a June high of $112.12. As recently as early November, when oil hovered at $80, OPEC officials warned they would intervene to hold the price at $70. But Saudi officials conspicuously refused to support an output cut at last week's OPEC meeting, and Saudi oil minister Ali al-Naimi has made clear that he'd be comfortable with lower prices. The short-term Saudi calculation is to drive oil prices down to squeeze their geopolitical adversaries and higher-cost producers. That goes especially for their adversaries across the Persian Gulf in Iran, which depends on oil exports for over 40% of its revenues, and where the regime had designed its budget based on $100 oil. The Saudis also hope to slow the explosive growth of U.S. production, which, thanks to the tapping of domestic shale resources through the combination of horizontal drilling and hydraulic fracturing, has risen to some nine million barrels a day from five million in 2008. By some estimates, the price of oil needs to be as high as $90 a barrel for oil extracted from "tight" deposits such as shale, though oil market research firm IHS believes most tight oil wells have a break-even cost of between $50 and $69 dollars a barrel. But even if the Saudi move slows U.S. drilling, the International Energy Agency forecasts that U.S. production will still surpass Saudi Arabia's output of 9.7 million barrels a day, and overtake Russia's 10.3 million, perhaps sometime next year. This would make America the world's largest oil producer, which it was from the dawn of the oil age through 1974. Thanks to the fracking boom, the U.S. surpassed Russia as the world's largest natural-gas producer in 2013. All this is a useful reminder, as IHS's Daniel Yergin told us the other day, that "technology responds to need and to price." It was the same story in the 1970s, when the world responded to OPEC's embargoes by exploiting new resources in Alaska and the North Sea, and again in the 1980s and 1990s, when offshore drilling became technologically feasible and economically profitable at ever-greater depths. And expect more from where that came, as the frackers continue to figure out how to drive down costs, and if new shale deposits in places such as Mexico, Ukraine and Argentina start to be exploited. Also worth remembering is how spectacularly wrong some recent predictions of doom turned out to be. This is shooting fish in a barrel, but here is Paul Krugman in, declaring that "peak oil has arrived." "What the commodity markets are telling us," Mr. Krugman averred, "is that we're living in a finite world, in which the rapid growth of emerging economies is placing pressure on limited supplies of raw materials, pushing up their prices. And America is, for the most part, just a bystander in this story." Far from being a bystander, America has been the main oil-market innovator. Such doomsaying is that much more embarrassing because warnings of peak oil are nearly as old as the oil industry. In his book "The Quest," Mr. Yergin records that in 1885 the state geologist of Pennsylvania warned that "the amazing exhibition of oil" was "a temporary and vanishing phenomenon--one which young men will live to see come to its natural end." Given this 130-year record of predictive failure, why does the end-of-oil myth persist? Part of it is that peak oil is more wish than prediction--a desire to see the end of fossil fuels to serve a larger political agenda. It is also a way of scaring governments into pouring money into alternative energy sources that can't compete with oil and natural gas without subsidies and mandates. Predicting disaster can also be a profitable business and a path to speech-making celebrity. The happy ending is that the notion that the world is running out of resources always fails because the ingenuity of entrepreneurs, spurred by necessity and incentive, always exceeds the imagination of doomsayers. So we are learning again, and let's hope memories will be longer this time.
Subject: Petroleum industry; Supply & demand; Prices; Hydraulic fracturing
Location: United States--US
People: Malthus, Thomas (1766-1834)
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630057183
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630057183?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Buyout Shops Caught in Crude Exposure; Energy-Focused Private-Equity Firms' Investments Decline as Oil Prices Sink
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
With oil prices down more than a third since June, private-equity investors have seen at least $12.3 billion of value erased from their holdings, based on share moves in nine exploration and production companies representing many of buyout firms' biggest publicly traded energy positions. Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by.
Full text: For years, private-equity firms gushed into oil investments. Now, some of their profits are slipping away. With oil prices down more than a third since June, private-equity investors have seen at least $12.3 billion of value erased from their holdings, based on share moves in nine exploration and production companies representing many of buyout firms' biggest publicly traded energy positions. Among the investors hard hit: Warburg Pincus LLC, whose Antero Resources Corp. and Laredo Petroleum Corp. investments are down roughly 33% and 70%, respectively, since June, and Apollo Global Management LLC, the largest shareholder in EP Energy Inc., which has declined about 60% in the same period. SandRidge Energy Inc. shares owned by Riverstone Holdings LLC and Carlyle Group LP are off about 67% since June. Private energy investments also are generating pain for buyout firms, as those assets' values are often judged based on similar publicly traded companies and assets. Falling oil prices crimp cash flow, KKR & Co.-owned Samson Resources Corp. has said. The Tulsa, Okla., energy producer has struggled with slumping natural-gas prices since KKR led a $7.2 billion leveraged buyout in 2011. KKR has since marked down its investment by more than half. The downdraft in oil could take a bite out of coming earnings of some publicly traded private-equity firms, such as KKR and Apollo, as it did in the last quarter amid oil's decline. Apollo owns about 23% of EP Energy's shares, making EP one of the firm's largest stock positions. A less-severe decline in EP's shares through the end of September was a major contributor to a 2% decline in the value of Apollo's private-equity funds during the third quarter. Apollo executives pointed to its stake, which has lost about $775 million of value since June, when talking about pressure on the firm's results. To be sure, many of these firms recently raised large, new energy funds, and their appetite for deals remains strong, said executives, who express confidence prices will eventually rebound to make investments worthwhile. Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by. "There are more sellers than buyers in energy to begin with. Now with the drop in oil prices, you're going to have companies that are highly levered that will become, in essence, forced sellers," Apollo co-founder Josh Harris said. "Our perspective is that there will be a long-run buying opportunity." Apollo has been among the more aggressive buyers this year, pumping billions of dollars into oil and gas ventures from Mississippi to Alaska. Last month, Apollo committed more cash to a company that buys stakes in oil and gas wells. And many debt-laden private-equity investments in energy included financial hedges to lock in prices and guarantee enough cash to handle the debt. The recent infusion of private cash into the oil patch follows a page from the firms' playbooks. The last time oil prices were this low, five years ago during the depths of the recession, financing for drilling had all but dried up. Private-equity firms were sitting on a mountain of money raised during the precrisis boom years and put cash behind wildcatters who were using new drilling technology to unlock troves of oil and gas across the U.S. Some of the investments made during the nascent shale-drilling boom turned out to be among firms' all-time best. KKR turned $312 million into $1.5 billion in about a year helping East Resources Inc. unearth natural gas in Pennsylvania. Warburg Pincus and two smaller firms invested about $1.5 billion in Antero, and have at times been up as much as $12 billion on the company they launched. Before oil prices began their plunge this summer, energy-focused private-equity funds had outperformed general private-equity funds over the past decade, returning about 16.5% annually, after fees, compared with 14% for the general funds, according to Cambridge Associates LLC. The big returns prompted private-equity investors to double down on drilling. Nearly $100 billion has been pumped into energy funds since 2011, according to data provider Preqin. For most of the year, private-equity firms ran into each other in auctions bidding up prices for drilling properties that big oil companies sold. Through mid-October, private-equity firms had been the buyers of roughly a third of the $54 billion of U.S. onshore oil and gas fields, according to RBC Richardson Barr, a Houston unit of Royal Bank of Canada. As oil's slide steepened, the deal market slowed, though. Private-equity firms sized up California oil fields that Freeport-McMoRan Inc. shopped recently, according to people familiar with the matter. Some of the suitors gave up pursuit of the properties valued at $5 billion because they were unable to borrow enough of the purchase price to earn the profits they were after, the people familiar with the matter said. As for done deals, private-equity firms often have some protection. Even as they were downgrading Laredo's stock to "neutral" from "overweight," Simmons & Co. International analysts last month said the Tulsa, Okla., company "has a number of things working for it," including the $88 dollars a barrel it will get for most of the oil it pumps next year. Laredo has hedged about 85% of its expected output in 2015, which is well above the 35% average for other energy producers it studies, the investment bank said. Warburg and its investors, which spent about $600 million launching Laredo, have already pocketed about $1 billion from the investment, so proceeds from any shares the firm still owns is gravy. EP Energy, which has also hedged much of its near-term output, is basically a break-even deal for Apollo at the current share price, down from about double the firm's money when it sold shares in its January initial public offering. "We feel good about the long-term prospects of that investment," said Mr. Harris, the Apollo co-founder. And despite Antero's recent slide, which has lopped about $4 billion since June off the shares still held by Warburg and partners Trilantic Capital Partners and Yorktown Energy Partners, the investment firms have already pocketed about $1 billion on their roughly $1.5 billion investment in the Denver company. Write to Ryan Dezember at Credit: By Ryan Dezember
Subject: Private equity; Acquisitions & mergers; Prices; Natural gas; Equity funds
Location: California
Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: SandRidge Energy Inc; NAICS: 211111; Name: Laredo Petroleum Inc; NAICS: 211111; Name: Antero Resources Corp; NAICS: 221112; Name: Apollo Global Management LLC; NAICS: 523920; Name: Warburg Pincus LLC; NAICS: 523910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630057259
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630057259?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Will Cheap Oil Lead to Big Mergers? Price Collapses Often Serve as the Trigger for Consolidation in Energy
Author: Scheck, Justin; Shayndi Raice
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
"Opportunism does play a part but it can't be the driver." Since many small oil companies still need cash, and large ones need resources to replenish their reserves, "you'd be more likely to see bits and pieces getting sold," another banker said.
Full text: When oil prices hit a trough, history points to a likely energy industry response: mergers and acquisitions. Price crashes in the early 1980s and late 1990s sparked a rash of deal-making that reshaped the industry. A decline in the mid-2000s led the giant firms to pick up smaller companies. Now, with oil's price down 40% since June, bankers and investors are hoping for a repeat. Traders are betting on it: BP PLC shares jumped by close to 5% Tuesday after an anonymous Twitter user claimed rival Royal Dutch Shell PLC was going to make a bid. Spokesmen for BP and Shell declined to comment The oil-field services industry, which suffers when low prices reduce oil-company spending, have produced the first big deals this year with their clients cutting spending on production. Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA also bid for a smaller services firm last month, offering $1.83 billion to buy Paris-based CGG SA. Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue. Low prices, he said, could put some small and medium-size companies into a "distressed situation" that forces them to either unload property to raise cash or sell out completely. Past consolidations took place after a prolonged slump in crude prices and often during a period of weak energy-stock market valuations. In contrast, this year's crude price decline has lasted about six months. Brent, the global oil benchmark, slipped to a four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S. The price fell 28 cent to $69.64 a barrel on ICE Futures Europe. Big deals among oil producers may be harder now than in the past because there are fewer large companies left, said Oppenheimer & Co. analyst Fadel Gheit. The deep price drop of the late 1990s led to the consolidation of the so-called supermajors, the handful of huge, integrated oil-producing and refining companies that operate around the world. BP acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco. That left the industry with about half-dozen big integrated players and a flock of much smaller companies that live and die on finding and producing new resources. Since then, much of the industry's merger activity has involved big companies buying smaller companies to gain access to new energy sources, or in some cases companies shedding exploration assets or businesses that drag on profits. Shell, for example, has sold oil fields in Nigeria, while U.S.-based Hess Corp. has gotten rid of assets related to refining. Overall, oil and gas deals have slowed over the past few years, according to data from researcher Dealogic, as big oil companies have come under pressure to reduce spending. The $242 billion in deals globally in 2013 was the lowest since 2009, Dealogic said. This year activity is up with nearly $300 billion in announced deals so far. Now, London investment bankers--who handle a large portion of global oil transactions--say such deals are likely to pick up again. Dropping oil prices have slashed the value of smaller exploration and production companies, giving some a market capitalization less than the value of their assets. London-based Ophir Energy PLC, for example, has a market value of about $1.25 billion, less than the $1.49 billion in its cash holdings at the end of June. Some of those companies see deals as a way to survive the downturn. Ophir agreed last month to buy rival Salamander Energy PLC for less than $500 million. An Ophir spokeswoman said the deal hasn't closed yet. When it comes to bigger mergers, bankers say, companies must first decide the market is predictable enough to start making long-term decisions. buyers want to see if prices keep falling before committing, while sellers are trying to avoid selling when the market is at a low. Viswas Raghavan, head of investment banking for Europe, the Middle East and Africa at J.P. Morgan Chase & Co., said there hasn't been a lot of deals in the energy sector yet because "a lot of these developments have happened very quickly." He added, "If you're in that sector, you're caught in the same valuation downdraft." Mr. Raghavan said he expects deals between companies that have real synergies. "Opportunism does play a part but it can't be the driver." Since many small oil companies still need cash, and large ones need resources to replenish their reserves, "you'd be more likely to see bits and pieces getting sold," another banker said. For example, India's ONGC Videsh Ltd. has been talking to Tullow Oil PLC about buying some assets. Energy bankers said it is still possible to see a return of the megamerger. Even after the last wave of giant deals a decade and a half ago, Shell talked internally and with bankers about merging with BP and BG Group PLC, said people involved in those talks. Such big deals are complicated, but also offer the most potential upside, said Oppenheimer's Mr. Gheit, because of potentially huge economies of scale. Several bankers say BG, which owns stakes in oil and gas fields from Brazil to the North Sea, could be a target for a large company looking to make get larger. BG, valued at around $50 billion, is about one-eighth the size of ExxonMobil but far larger than most exploration and production companies. Its shares are currently trading at their lowest level for five years. But the company recently hired a new chief executive and buying the company outright would still be a large deal for any would-be acquirer. BG said it doesn't comment on market speculation. Write to Justin Scheck at and Shayndi Raice at Credit: By Justin Scheck and Shayndi Raice
Subject: Acquisitions & mergers; Petroleum industry; Investments; Small business; Crude oil prices
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Hess Corp; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Technip SA; NAICS: 541330; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630088617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630088617?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permi ssion of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Global Finance: Buyout Shops Caught in Crude Exposure --- Energy-Focused Private-Equity Firms' Investments Decline as Oil Prices Sink; Bulls See 'Long-Run Buying Opportunity'
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: C.3.
Abstract:
Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by.
Full text: For years, private-equity firms gushed into oil investments. Now, some of their profits are slipping away. With oil prices down more than a third since June, private-equity investors have seen at least $12.3 billion of value erased from their holdings, based on share moves in nine exploration and production companies representing many of buyout firms' biggest publicly traded energy positions. Among the investors hard hit: Warburg Pincus LLC, whose Antero Resources Corp. and Laredo Petroleum Corp. investments are down roughly 33% and 70%, respectively, since June, and Apollo Global Management LLC, the largest shareholder in EP Energy Inc., which has declined about 60% in the same period. SandRidge Energy Inc. shares owned by Riverstone Holdings LLC and Carlyle Group LP are off about 67% since June. Private energy investments also are generating pain for buyout firms, as those assets' values are often judged based on similar publicly traded companies and assets. Falling oil prices crimp cash flow, KKR & Co.-owned Samson Resources Corp. has said. The Tulsa, Okla., energy producer has struggled with slumping natural-gas prices since KKR led a $7.2 billion leveraged buyout in 2011. KKR has since marked down its investment by more than half. The downdraft in oil could take a bite out of coming earnings of some publicly traded private-equity firms, such as KKR and Apollo, as it did in the last quarter amid oil's decline. Apollo owns about 23% of EP Energy's shares, making EP one of the firm's largest stock positions. A less-severe decline in EP's shares through the end of September was a major contributor to a 2% decline in the value of Apollo's private-equity funds during the third quarter. Apollo executives pointed to its stake, which has lost about $775 million of value since June, when talking about pressure on the firm's results. To be sure, many of these firms recently raised large, new energy funds, and their appetite for deals remains strong, said executives, who express confidence prices will eventually rebound to make investments worthwhile. Oil- and stock-price declines, they said, create buying opportunities, with energy producers looking to bridge cash shortfalls by selling assets and bank financing for drilling more difficult to come by. "There are more sellers than buyers in energy to begin with. Now with the drop in oil prices, you're going to have companies that are highly levered that will become, in essence, forced sellers," Apollo co-founder Josh Harris said. "Our perspective is that there will be a long-run buying opportunity." Apollo has been among the more aggressive buyers this year, pumping billions of dollars into oil and gas ventures from Mississippi to Alaska. And many debt-laden private-equity investments in energy included financial hedges to lock in prices and guarantee enough cash to handle the debt. The recent infusion of private cash into the oil patch follows a page from the firms' playbooks. The last time oil prices were this low, five years ago during the depths of the recession, financing for drilling had all but dried up. Private-equity firms were sitting on a mountain of money raised during the precrisis boom years and put cash behind wildcatters who were using new drilling technology to unlock troves of oil and gas across the U.S. Some of the investments made during the nascent shale-drilling boom turned out to be among firms' all-time best. KKR turned $312 million into $1.5 billion in about a year helping East Resources Inc. unearth natural gas in Pennsylvania. Warburg Pincus and two smaller firms invested about $1.5 billion in Antero, and have at times been up as much as $12 billion on the company they launched. Before oil prices began their plunge this summer, energy-focused private-equity funds had outperformed general private-equity funds over the past decade, returning about 16.5% annually, after fees, compared with 14% for the general funds, according to Cambridge Associates LLC. The big returns prompted private-equity investors to double down on drilling. Nearly $100 billion has been pumped into energy funds since 2011, according to data provider Preqin. For most of the year, private-equity firms ran into each other in auctions bidding up prices for drilling properties that big oil companies sold. Through mid-October, private-equity firms had been the buyers of roughly a third of the $54 billion of U.S. onshore oil and gas fields, according to RBC Richardson Barr, a Houston unit of Royal Bank of Canada. As oil's slide steepened, the deal market slowed, though. Credit: By Ryan Dezember
Subject: Acquisitions & mergers; Prices; Natural gas; Equity funds; Private equity
Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: SandRidge Energy Inc; NAICS: 211111; Name: Laredo Petroleum Inc; NAICS: 211111; Name: Antero Resources Corp; NAICS: 221112; Name: Apollo Global Management LLC; NAICS: 523920; Name: Warburg Pincus LLC; NAICS: 523910
Classification: 9180: International; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2014
Publication date: Dec 5, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630151693
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630151693?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Will Cheap Oil Lead to a New Merger Wave? --- Crude Price Drops That Linger Historically Trigger an Energy Industry Consolidation; Why This Time May Be Different
Author: Scheck, Justin; Shayndi Raice
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: B.1.
Abstract:
Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA bid for a smaller services firm last month, offering $1.83 billion to buy Paris-basedCGG SA. Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue.
Full text: Corrections & Amplifications Viswas Raghavan is head of banking for Europe, the Middle East and Africa at J.P. Morgan Chase & Co. A Marketplace article Friday about prospects for oil-industry mergers and acquisitions incorrectly gave his title as head of investment banking for that region. (WSJ Dec. 6, 2014) When oil prices hit a trough, history points to a likely energy industry response: mergers and acquisitions. Price crashes in the early 1980s and late 1990s sparked a rash of deal-making that reshaped the industry. A decline in the mid-2000s led the giant firms to pick up smaller companies. Now, with oil's price down 40% since June, bankers and investors are hoping for a repeat. Traders are betting on it: BP PLC shares jumped by close to 5% Tuesday after an anonymous Twitter user claimed rival Royal Dutch Shell PLC was going to make a bid. Spokesmen for BP and Shell declined to comment The oil-field services industry, which suffers when low prices reduce oil-company spending, have produced the first big deals this year. Last month, the second-largest oil-field servicer, Halliburton Co., bid about $35 billion to acquire No. 3 Baker Hughes Inc. France's Technip SA bid for a smaller services firm last month, offering $1.83 billion to buy Paris-basedCGG SA. Pascal Menges, a Lombard Odier manager whose funds hold shares of shale-focused U.S. energy companies, said he expects to see an uptick in acquisitions and asset sales if low oil prices continue. Low prices, he said, could put some small and medium-size companies into a "distressed situation" that forces them to unload property to raise cash or sell out completely. Past consolidations took place after a prolonged slump in crude prices and often during a period of weak energy-stock market valuations. In contrast, this year's crude price decline has lasted about six months. Brent, the global oil benchmark, slipped to a four-year low Thursday after Saudi Arabia cut the price of its oil in the U.S. The price fell 28 cent to $69.64 a barrel on ICE Futures Europe. Big deals among oil producers may be harder now than in the past because there are fewer largecompanies left, said Oppenheimer & Co. analyst Fadel Gheit. The deep price drop of the late 1990s led to the consolidation of the so-called supermajors, the handful of huge, integrated oil-producing and refining companies that operate around the world. BP acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco. That left the industry with about half-dozen big integrated players and a flock of much smaller companies that live and die on finding and producing new resources. Since then, much of the industry's merger activity has involved big companies buying smaller companies to gain access to new energy sources, or in some cases companies shedding exploration assets or businesses that drag on profits. Shell, for example, has sold oil fields in Nigeria, while U.S.-based Hess Corp. has gotten rid of assets related to refining. Overall, oil and gas deals have slowed over the past few years, according to data from researcher Dealogic, as big oil companies have come under pressure to reduce spending. The $242 billion in deals globally in 2013 was the lowest since 2009, Dealogic said. This year activity is up with nearly $300 billion in announced deals so far. Now, London investment bankers -- who handle a large portion of global oil transactions -- say such deals are likely to pick up again. Dropping oil prices have slashed the value of smaller exploration and production companies, giving some a market capitalization less than the value of their assets. London-based Ophir Energy PLC, for example, has a market value of about $1.25 billion, less than the $1.49 billion in its cash holdings at the end of June. Some of those companies see deals as a way to survive the downturn. Ophir agreed last month to buy rival Salamander Energy PLC for less than $500 million. An Ophir spokeswoman said the deal hasn't closed yet. When it comes to bigger mergers, bankers say, companies must first decide the market is predictable enough to start making long-term decisions. buyers want to see if prices keep falling before committing, while sellers are trying to avoid selling when the market is at a low. Viswas Raghavan, head of investment banking for Europe, the Middle East and Africa at J.P. Morgan Chase & Co., said there hasn't been a lot of deals in the energy sector yet because "a lot of these developments have happened very quickly." He added, "If you're in that sector, you're caught in the same valuation downdraft." Mr. Raghavan said he expects deals between companies that have real synergies. "Opportunism does play a part but it can't be the driver." Since many small oil companies still need cash, and large ones need resources to replenish their reserves, "you'd be more likely to see bits and pieces getting sold," another banker said. For example, India's ONGC Videsh Ltd. has been talking to Tullow Oil PLC about buying some assets. Energy bankers said it is still possible to see a return of the megamerger. Shell talked internally and with bankers about merging with BP and BG Group PLC, said people involved in those talks. Such deals are complicated, but also offer the most potential upside, said Oppenheimer's Mr. Gheit, because of potentially economies of scale. Several bankers say BG, which owns stakes in oil and gas fields from Brazil to the North Sea, could be a target for a large company. BG, valued at around $50 billion, is about one-eighth the size of ExxonMobil. Its shares are currently trading at their lowest level for five years. But the company recently hired a new chief executive. BG said it doesn't comment on market speculation. Credit: By Justin Scheck and Shayndi Raice
Subject: Acquisitions & mergers; Petroleum industry; Investments; Small business; Crude oil prices
Location: Europe United States--US Africa Middle East
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Technip SA; NAICS: 541330; Name: Halliburton Co; NAICS: 213112, 237990
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Dec 5, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630226610
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226610?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Energy Markets: Saudi Arabia Cuts Oil Prices for U.S., Asia --- Market Watchers See Kingdom's Discount as Bid to Keep Market Share; 'A Declaration of War to U.S. Shale-Oil Producers'
Author: Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: C.4.
Abstract:
People familiar with the matter said Riyadh argued that the group would lose market share to non-OPEC producers, including U.S. shale-oil producers, if it cut output.
Full text: Saudi Arabia, the world's largest oil exporter, deepened the discount at which it sells crude to Asia and the U.S., underscoring for some market watchers the kingdom's commitment to defending its market share amid the recent rout in oil prices. The move comes a week after Riyadh persuaded fellow members of the Organization of the Oil Exporting Countries to maintain the group's production target, instead of reining in output significantly to support prices. Brent crude, the global benchmark, slid 0.4% to $69.64 a barrel on the news, reversing earlier gains. That is the lowest level since May 2010 and brings Brent's year-to-date decline to 37%. U.S. crude-oil prices dropped 0.8% to $66.81 a barrel, but remained above the more than five-year low hit Nov. 28. State-owned Saudi Arabian Oil Co., known as Saudi Aramco, said Thursday that it had reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It dropped prices for all crude grades to the U.S. by between 10 cents and 90 cents a barrel. Thursday's discounts to Asia "would herald in a new round in the battle for market shares," said Carsten Fritsch, an analyst at Commerzbank. He said the U.S. discounts were "tantamount to a declaration of war to U.S. shale-oil producers," given the steep fall already in U.S. benchmark prices. Aramco, however, raised prices for all crude grades to northwest Europe and Mediterranean destinations by between 20 cents and 50 cents a barrel compared with the December prices. Saudi Aramco sets its prices relative to regional benchmark crude-oil prices. It sells at different prices in different regions mainly to reconcile buyer demand with market fluctuations in those benchmarks. The price-setting process is typically a technical move with little impact on the broader market. But in recent months, amid a steep drop in global crude prices, the settings have been closely followed by market watchers looking for signs about Saudi oil policy. Saudi Arabia, the biggest OPEC producer by far, and its Gulf allies pushed the group at its Nov. 27 meeting to keep its production target unchanged. People familiar with the matter said Riyadh argued that the group would lose market share to non-OPEC producers, including U.S. shale-oil producers, if it cut output. Aramco also lowered its U.S. pricing last month, a move executives familiar with the matter said at the time was aimed at holding on to market share. The Wall Street Journal reported Wednesday that the kingdom now believes oil prices could stabilize at around $60 a barrel, a level both it and other Gulf producers believe they could withstand. The shift in Saudi thinking suggests the country won't push for supply cuts in the near term, even if oil prices fall further. Kuwait's deputy finance minister, Khalifa Hamada, said Thursday the country was likely to base its 2014-2015 budget on a price of $55 to $60 a barrel. Credit: By Summer Said
Subject: Petroleum industry; Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 5, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630226691
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226691?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Top Europe Bank Holds Fire on New Action --- ECB's Draghi Opens Door to Bolder Stimulus but Defers Decision Until Early 2015; Falling Oil Prices Pose Fresh Wrinkle
Author: Blackstone, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Dec 2014: A.8.
Abstract:
When interest rates are near zero, as is the case with the ECB and other large central banks, the main lever to stimulate the economy is through purchases of assets with newly created money that increase the size of a central bank's balance sheet and reduce borrowing costs for governments and the private sector.
Full text: FRANKFURT -- The European Central Bank opened the door to a dramatic escalation in its campaign to stimulate the eurozone's stagnant economy, but deferred any moves until early 2015 amid signs of continuing divisions over the right course of action. ECB President Mario Draghi said Thursday that officials discussed purchases of government bonds, otherwise known as quantitative easing, a move that would mark a new chapter in the bank's fight against excessively weak inflation. But he added they needed more time to gauge the effects of policies that they had already implemented while assessing how falling oil prices might affect the region's already weak consumer prices. "We discussed the possibility of doing QE" with buying government bonds "as one option," Mr. Draghi said after the ECB left its key interest rates unchanged at record lows at the bank's monthly meeting. The ECB will reassess its policies early next year and decide whether it needs to do more, Mr. Draghi said, raising expectations that the ECB could act as soon as its next policy meeting on Jan. 22, although he didn't commit to a time frame. "Early means early. It doesn't mean at the next meeting," Mr. Draghi said. Financial markets reacted negatively, as investors had hoped for a more ironclad commitment to begin large-scale bond purchases, a policy that has been used extensively by central banks in the U.S., the U.K. and Japan. European and U.S. stocks fell, and the euro rose on Mr. Draghi's comments. "They're almost there but not quite over the line," said Ken Wattret, economist at BNP Paribas. "The pieces of the jigsaw are falling into place." The ECB opted against immediate action despite an annual inflation rate of 0.3% in the eurozone in November, far below the central bank's target of just under 2%. The ECB lowered its 2015 forecast for consumer-price growth to 0.7% from 1.1% and in 2016 from 1.4% to 1.3%. The inflation forecasts didn't fully incorporate the most recent drop in oil prices, which could push inflation even lower. "On the basis of their projections, any other central bank would have announced a policy change," Mr. Wattret said. Mr. Draghi's remarks contained a number of hints that more central-bank stimulus may be coming to Europe soon. He said the ECB would be "particularly vigilant" about the effect the sharp reduction in oil prices could have on consumer prices and expectations for future inflation, using a phrase that his predecessor, Jean-Claude Trichet, often deployed to signal imminent ECB action. Mr. Draghi said the bank intended to raise the size of its balance sheet to early 2012 levels, implying a rise of around 1 trillion euros ($1.24 trillion). That was a firmer objective than in November, when the bank said it expected its current policies -- which include cheap, four-year loans to banks and purchases of covered bank bonds and asset-backed securities -- to achieve this rise. But the small shift in language was met with resistance within the ECB's 24-member governing council. Mr. Draghi said a vast majority approved the change to the balance-sheet language, signaling some opposition. Jens Weidmann, the head of Germany's powerful central bank, was among the dissenters, a person familiar with the matter said, because he didn't want the ECB to commit prematurely to full-blown quantitative easing. The other German member of the governing council, executive board member Sabine Lautenschlager, has signaled resistance to buying government bonds. Quantitative easing is unpopular in Germany, Europe's largest economy, where the policy fuels deep-rooted fears of inflation and the use of central-bank money to finance wasteful government spending. Mr. Draghi suggested that the ECB would move even in the face of German opposition if the ECB's inflation target was at risk. "We don't need unanimity" to launch quantitative easing, he said, adding that he was confident a program could be designed to achieve a consensus within the ECB, if needed. The ECB could also purchase other private-sector assets, he said, saying officials have discussed all types of assets except gold. Despite the negative reaction in financial markets, which may have grown overly optimistic about imminent ECB moves, the prospects for large-scale government bond purchases increasingly appear to be a question of when rather than if. When interest rates are near zero, as is the case with the ECB and other large central banks, the main lever to stimulate the economy is through purchases of assets with newly created money that increase the size of a central bank's balance sheet and reduce borrowing costs for governments and the private sector. Quantitative easing also typically weakens the exchange rate, boosting exports and inflation. Mr. Draghi said the policy was shown to be effective in the U.S. and U.K., although it is a tougher call for Japan, given other challenges that economy faces. His comments underscore the divergent paths of major central banks as their economies recover at different speeds. The U.S. Federal Reserve and the Bank of England are expected to start raising interest rates next year as their economies see faster, jobs-rich recoveries than in the eurozone. In contrast, Japan and the ECB are ramping up their stimulus drives. Credit: By Brian Blackstone
Subject: Central banks; Monetary policy; Banking; Meetings; Consumer Price Index; Eurozone
Location: United States--US
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: European Central Bank; NAICS: 521110
Classification: 9175: Western Europe; 1120: Economic policy & planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.8
Publication year: 2014
Publication date: Dec 5, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630226908
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630226908?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Slide as High Supplies Weigh; Low Demand Elsewhere Damps Expectations of Boost From Positive U.S. Employment Data
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
NEW YORK--Oil prices pared losses Friday on better-than-expected U.S. employment data but held lower as worries about a global glut of oil continued to weigh on the market.
Full text: NEW YORK--Oil prices slid to the lowest point in more than five years Friday as worries about a global glut of oil continued to weigh on the market. Light, sweet crude oil for January delivery skidded 97 cents, or 1.5%, to $65.84 a barrel on the New York Mercantile Exchange, the lowest settlement since July 29, 2009. Prices fell 0.5% this week and have dropped nine of the past 10 weeks. Brent, the global benchmark, fell 57 cents, or 0.8%, to $69.07 a barrel on ICE Futures Europe, the lowest level since Oct. 7, 2009. Brent lost 1.5% on the week. Oil futures have plunged in recent months as strong supply growth has outpaced moderate demand. Saudi Arabia on Thursday lowered the price for its oil in the U.S., indicating that the country is focused on maintaining its market share in a low-price environment rather than cutting production to reduce the global surplus of crude. "The Saudi Arabia news really caught people a little off-guard here," said Tariq Zahir, managing member of Tyche Capital Advisors. Prices are likely to stay under pressure until traders see indications that supplies will drop as producers pull back on drilling or new investments, said Ed Kevelson, head of U.S. energy over-the-counter sales at brokerage Newedge USA, which is owned by Société Générale. "The market's been searching for a true bottom," he said, but so far, "I don't think the price action that we're seeing implies a bottom." Norway's Statoil ASA said Friday that it would idle three oil-drilling rigs for longer than previously planned. The U.S. added a , the strongest month of hiring since January 2012, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected a gain of 230,000. Higher employment can lead to stronger demand for petroleum products, particularly gasoline, as more commuters drive to work. "Confidence is going to build--more people are going to be out there using energy" in the U.S., said Carl Larry, director of oil and gas for Frost & Sullivan. However, he said, "oil prices keep going down because the rest of the world is not getting that kind of demand." January reformulated gasoline blendstock, or RBOB, dropped 2.14 cents, or 1.2%, to $1.7734 a gallon, the lowest level since Oct. 9, 2009. Prices are down 3% on the week. January diesel fell 0.99 cent, or 0.5%, to $2.1078 a gallon, the lowest settlement since Sept. 22, 2010. Prices fell 2.5% this week. Kjetil Malkenes Hovland contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Supply & demand; Petroleum industry; Prices
Location: United States--US
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Frost & Sullivan; NAICS: 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630382210
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
White House's Furman Says Oil-Price Decline Benefits Consumers, Growth; Council of Economic Advisers Chairman Says Price-Swings Impact Not as Great as in Past
Author: Paletta, Damian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
"A reasonable rule of thumb is that for every $8 to $10 the price of oil declines, it adds one-tenth of 1% to gross domestic product growth because we are still net importers of oil," said Jason Furman, chairman of the White House Council of Economic Advisers.
Full text: A top White House official said in an interview Friday that the fall in oil prices would carry broad benefits to U.S. consumers and boost economic growth, particularly when the labor market is gaining steam. Crude oil prices have plunged to multiyear lows since mid-June, to below $70 a barrel. "A reasonable rule of thumb is that for every $8 to $10 the price of oil declines, it adds one-tenth of 1% to gross domestic product growth because we are still net importers of oil," said Jason Furman, chairman of the White House Council of Economic Advisers. "So the benefits for consumers outweigh the impact on producers." Mr. Furman said that "at the current price, I expect the production of oil will continue to increase and the revolution in unconventional drilling in the short run" would continue as well, because "the marginal costs of those wells are very low." Oil-price swings can have a large impact on the economy, but Mr. Furman said this isn't as much the case as it was in the past. "It is the case that the impact that oil prices have in either direction on the U.S. economy is smaller today than in the past," he said. "We are less oil intensive in the GDP. We have more energy efficiency in our cars, more in our factories, and we are producing more oil. All of that means our economy is less vulnerable to the change in the price of oil than we were in the past." Asked if the change in oil prices would change the calculus for the White House on whether to approve the Keystone XL pipeline, Mr. Furman declined to comment, saying "That's an issue for the State Department." Write to Damian Paletta at Credit: By Damian Paletta
Subject: Crude oil prices; Economic growth; Gross Domestic Product--GDP; Petroleum industry
Location: United States--US
Company / organization: Name: Council of Economic Advisers; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1630604444
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1630604444?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Small Oil Drillers Feel Brunt of Crude's Decline; Some Stocks Have Lost Half Their Market Value or More in the Past Month
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract:
In the years before 2014's oil-price crash, these and other companies sold bonds and took out loans to fuel rapid growth in new and often costly fields across the U.S. That borrowing was easier to stomach when oil prices were $100 a barrel, but with U.S. crude down 39% in nearly six months, investors fear that some firms face slowing growth rates, reduced profits or a potential cash crunch. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading.
Full text: The selloff in crude prices has bruised energy companies big and small, but none have felt the pain worse than the nation's heavily indebted oil drillers. Shares of small, North America-based oil and gas producers that loaded up on debt during times of high oil prices have plunged in the past month, in some cases losing half their market value or more. Shares of Goodrich Petroleum Corp. have plunged 87% from their peak in June and 49% in the past month. Energy XXI Ltd.'s stock is down 51% in a month. Halcon Resources Corp. has fallen 36% in that time. In the years before 2014's oil-price crash, these and other companies sold bonds and took out loans to fuel rapid growth in new and often costly fields across the U.S. That borrowing was easier to stomach when oil prices were $100 a barrel, but with U.S. crude down 39% in nearly six months, investors fear that some firms face slowing growth rates, reduced profits or a potential cash crunch. On Friday, U.S. oil prices fell to a more than five-year low. The front-month oil contract lost 97 cents, or 1.5%, to settle at $65.84 a barrel on the New York Mercantile Exchange, exerting further downward pressure on many oil-company shares. Some investors are holding on to the shares of smaller and indebted drillers, reluctant to sell with prices so low. Others are paring back exposure, unwilling to ride out the volatility amid a global oil-supply glut that shows few signs of abating. "The earnings are going to go down, the revenues are going to go down and in some cases there will be concerns about liquidity," said Eric Green, a portfolio manager who helps manage $3 billion in equity investments at Penn Capital Management. Mr. Green owns a number of shares of smaller energy producers. He said he is hanging on, betting oil prices will rebound Investors said crude prices could return to more lofty levels if a geopolitical shock erupts or global growth picks up. Energy companies have issued a flurry of debt to finance the yearslong boom in domestic oil and gas production. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading. "If you look at the last couple of years, there's a number of insane junk deals that a lot of these energy companies have done," said Bill Bell, a portfolio manager on the Atlanta Capital SMID-Cap fund, which holds $5.9 billion of small and midsize companies. Junk bonds, those rated below investment grade, are issued by companies with relatively low credit ratings. Mr. Bell said his fund has reduced its holdings of energy stocks over the past year, from about 4% to less than 2%. Goodrich Petroleum, which drills for oil in higher-cost fields in Louisiana and Mississippi has a debt load of more than three times its stock-market value. Shares ran up as much as 74% this year to trade as high as $29.60 in June, when U.S. oil hit a high for the year at $107.26 a barrel. On Friday, the stock closed at $3.71, down 5.1% on the day. The company didn't respond to a request for comment. Energy XXI, which operates in the Gulf of Mexico area, has a debt load that is more than 11 times its market value. Shale producer Halcon Resources has a debt-to-equity ratio of more than 4 to 1. An Energy XXI spokesman said the company has hedged to protect against low oil prices through 2015, and "we're starting to work on our 2016 hedges as we speak." Halcon didn't respond to a request for comment. Rafaelina Lee, a portfolio manager who helps oversee about $800 million of small and midsize stocks for Deutsche Asset & Wealth Management, said she has curbed her holdings of companies producing in more costly locations. "Some smaller-cap names don't have as clean balance sheets," she said. "In these times of high uncertainty, a clean balance sheet is definitely required, as well as disciplined management." Investors said the outlook for energy producers depends largely on the direction of oil prices. U.S. crude output is expected to increase next year despite falling prices, which means a return to $100 oil is unlikely soon. Charles DyReyes, an analyst who focuses on energy stocks at Brandywine Global Investment Management, is combing through some battered shares of smaller energy firms. He said he expects oil prices to rebound in the coming year, possibly to $80 a barrel, an economical level for many producers. "I don't need oil at $100 to make money here," Mr. DyReyes said. Write to Dan Strumpf at Credit: By Dan Strumpf
Subject: Petroleum industry; Investment advisors; Debt restructuring; Junk bonds; Crude oil prices
Location: United States--US
Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Halcon Resources Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1631221227
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631221227?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico Mulls Curtailing Energy Bids Amid Falling Prices; Recent Plunge in Oil Prices Is Prompting Mexico's Government to Rethink Its Oil and Gas Industry Reopening
Author: Iliff, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--The recent plunge in oil prices is prompting Mexico's government to consider scaling back the initial bidding for its momentous plans to reopen its oil and gas industry to private companies, and to offer them better terms. The government is now likely to delay or scale down tenders for some of the oil fields and areas that it planned to offer in the coming months, especially in areas with shale oil where recovery costs are higher than in traditional oil fields, energy minister Pedro Joaquín Coldwell said late on Thursday. He said the auctions for deep-water fields were unlikely to change because they were longer-term investments, but that other fields with "nonconventional oil, shale gas and shale oil" were likely to be delayed or reduced in scope--including the Chincontepec field, a major onshore area with lots of oil stuck under nonporous rock. Even before Mr. Coldwell's comments, the euphoria that greeted Mexico's moves to open its energy industry for the first time in 76 years had slowly given way to concerns that the first-round bids could be less lucrative for the government than it had expected. Complicating matters, President Enrique Peña Nieto now faces a political crisis two years into his rule, amid public cries for government accountability in the disappearance of 43 students and allegations of favoritism in awarding government contracts. The president's approval rating of about 40% is the lowest for a Mexican leader in nearly two decades, raising the question of whether the president has the political capital to sustain his reform agenda, analysts said. "This really is a tsunami that is hitting right now, and clearly at the worst possible time," said John Padilla, managing director for oil consultancy IPD Latin America. To be sure, Mr. Padilla and others believe that the fundamentals of the energy overhaul are solid and that oil prices could bounce back in time for the initial bids for 109 exploratory blocks and 60 production fields during the course of the year. Shallow-water fields are scheduled to go first, with blocks in deep Gulf waters likely dragging out until the end of 2015. In addition to low oil prices, Mexico's regulators have been struggling with putting together a large bid round in a short period of time with vast new responsibilities and limited staff, analysts said. "They're saying that it's all about oil prices, but it's also about recognizing that the amount of work involved in launching a bid round is tremendous and that could have factored into this as well," Mr. Padilla said. Industry officials say lower oil prices won't turn off the major oil companies to one of the most exciting developments in the global oil and gas sector in recent memory, given Mexico's significant oil and gas reserves and huge unexplored offshore areas likely rich with resources. But the change in the price climate could make oil firms pickier about where they put their investments. "I don't think there's any question that in an oil-price environment like we see now...where cash flows are down and the stress is a little bit higher on that side, it would be naive to say that won't have some impact on how the industry responds," said Marvin Odum, upstream Americas director for Royal Dutch Shellin an interview this week. Nonetheless, Mr. Odum said, deep-water areas remain attractive because they are long-term projects. "You really have to take a long-term view of where you think oil prices will be." Gabriel Salinas, an energy lawyer at Mayer Brown in Houston, said the bid-round modification makes sense. "Leaving some areas out of one round and putting these areas into a future round is not a big concern. It's just economics." The Energy Ministry and the National Hydrocarbons Commission are working to prepare "model contracts" that will set critical terms for the bid round that includes potential oil and gas resources in exploratory blocks of around 15 billion barrels of oil equivalent, and probable reserves of about 4 billion barrels in the oil fields set to be awarded. The regulators missed the November deadline for those contracts and Mr. Coldwell said they could come out next week. Write to Laurence Iliff at Credit: By Laurence Iliff
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 5, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1631221235
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631221235?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
An Ailing Venezuela Trims Oil Diplomacy; Caracas Slashes Shipments of Discounted Crude to Its Partners in the Caribbean and Central America Who Depend Heavily on the Subsidies
Author: Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Dec 2014: n/a.
Abstract: None available.
Full text: KINGSTON, Jamaica--Some Caribbean and Central American countries are bracing for cutbacks in shipments of cut-rate oil from Venezuela, as Caracas struggles with sliding crude prices and a spiraling economic crisis. For a decade, the 13 beneficiaries of Venezuela's largess have depended deeply on the oil to finance social spending and infrastructure, and rewarded Caracas with diplomatic support on the international stage, regional diplomats said in interviews. Even as Venezuela pledges to continue the program, the country's oil exports to the countries fell about 20% through October compared with the same period last year, says ClipperData LLC, a New York data tracker. And last year, Venezuela's cut-rate oil exports declined 15% from 2012, the International Monetary Fund says. Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession. "If Petrocaribe pulls out of Jamaica I don't know how we are going to manage," said Verona Barrett-Brown, the principal of a Kingston-area primary school that displays the name of Venezuela's national oil company, Petróleos de Venezuela, or PdVSA, on the wall. "It will be a dark day." In tiny Grenada, the discounted Venezuelan oil funds 40% of social programs, from textbooks and free lunches for children to paying for roads and buses. Haiti named an airport after Venezuela's late President Hugo Chávez, who founded Petrocaribe in 2005, and uses the oil money for food distribution programs and for monthly allowances for the poor. The Dominican Republic has used the program to plug a fiscal hole. And here in Jamaica's capital, projects funded with Venezuelan oil have provided aid to small farmers and businesses, refurbished a zoo and replaced pit latrines in schools with flushing toilets. But now, the IMF is warning regional governments "that the likelihood of disruption is more likely than it was because Venezuela is under greater pressure," said Adrienne Cheasty, deputy director of the IMF's Western Hemisphere unit. Venezuelan oil prices have fallen about a third since this summer to $61 a barrel as of Wednesday, which Deutsche Bank says is half of what is needed to cover the central government's budget. With inflation soaring and Wall Street expressing concerns about a default, President Nicolás Maduro announced in a televised address on Dec. 3 that he would cut spending 20%. Venezuelan officials have made no public mention of cutbacks to Petrocaribe or other oil-aid programs, such as the arrangement to ship 99,000 barrels a day to Cuba in exchange for doctors who work in Venezuelan slums. Venezuelan Foreign Minister Rafael Ramírez recently reiterated his government's "strong commitment to continue the Petrocaribe initiative, under any circumstances." But a quiet shift is taking place. Honduras and Guatemala are now inactive in the program after Caracas toughened the terms, diplomats said. Other countries not within Petrocaribe, but which receive preferential oil deals from Venezuela, are also seeing oil shipments fall. Bolivia and Paraguay didn't receive any cut-rate oil shipments last year from Venezuela, while Argentina's share was halved, according to statistics from PdVSA. "Every barrel of oil PdVSA sends to a Petrocaribe country under preferential terms is one less barrel from which Venezuela can immediately derive a higher, market-based price to support the embattled economy," said Cory Gill, an associate with the energy researcher Goldwyn Global Strategies who co-wrote a report on Petrocaribe for the Atlantic Council think tank in Washington. The IMF calculates that Petrocaribe countries receive about 100,000 barrels a day from Venezuela. The lender says they will on average face a 1.6% hit to economic output if Venezuela turns off the oil tap, with highly dependent countries such as Haiti facing the most difficulty. Brian Wynter, governor of Jamaica's central bank, said his government is adjusting. "We are being very cautious by using projections of what we will use from Petrocaribe that are much lower than what the facility allows," he said. For years, Petrocaribe was mutually beneficial. Participating countries paid a fraction of market price upfront for oil, deferring the full cost through long-term loans with 25-year maturities and interest rates as low as 1%. Some governments sold the oil at full price or simply earmarked savings from not having to buy fuel at market prices for programs and infrastructure. Venezuela was repaid in rice, chicken, beans, jeans and other products that Jorge Piñon, director of the Latin America and Caribbean Energy Program at the University of Texas at Austin, said were sold at artificially high prices. The program has cost Venezuela $22.1 billion, with Petrocaribe countries accumulating more than $11 billion in debt through 2013, said Mr. Piñon, basing his calculations on PdVSA data. In return, Venezuela got loyal allies that voted with Venezuela at the United Nations, the Organization of American States and at other regional bodies, diplomats and officials from four countries said. In March, for instance, Venezuela's allies, including Petrocaribe countries, barred a prominent Venezuelan opposition leader's speech at the OAS from being broadcast publicly, the diplomats said. "You don't provide oil to all these countries on such sweet terms and not expect support in the U.N. and OAS," said a high-ranking official from one Caribbean nation. "That's just the way it works. That's just realpolitik." But Caribbean and Central American countries, long concerned over their high dependence on single crops, such as sugar, bananas and tobacco, or industries, such as tourism, are now worried about their addiction to inexpensive Venezuelan oil. "There is agreement among us that we don't want to be too dependent on one source," said the ambassador to Caracas of one Petrocaribe country. "We don't want to put all of our eggs into one basket and then be left with nothing when reality hits." Kejal Vyas contributed to this article. Write to Ezequiel Minaya at Credit: By Ezequiel Minaya
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 6, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1631610751
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1631610751?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Black-and-Blue Sector --- Shares in Small and Midsize Energy Drillers Take a Hit From Oil's Downturn
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Dec 2014: B.5.
Abstract:
In the years before 2014's oil-price crash, these and other companies sold bonds and took out loans to fuel rapid growth in new and often costly fields across the U.S. That borrowing was easier to stomach when oil prices were $100 a barrel, but with U.S. crude down 39% in nearly six months, investors fear that some firms face slowing growth rates, reduced profits or a potential cash crunch. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading.
Full text: The selloff in crude prices has bruised energy companies big and small, but none have felt the pain worse than the nation's heavily indebted oil drillers. Shares of small, North America-based oil and gas producers that loaded up on debt during times of high oil prices have plunged in the past month, in some cases losing half their market value or more. Shares of Goodrich Petroleum Corp. have plunged 87% from their peak in June and 49% in the past month. Energy XXI Ltd.'s stock is down 51% in a month. Halcon Resources Corp. has fallen 36% in that time. In the years before 2014's oil-price crash, these and other companies sold bonds and took out loans to fuel rapid growth in new and often costly fields across the U.S. That borrowing was easier to stomach when oil prices were $100 a barrel, but with U.S. crude down 39% in nearly six months, investors fear that some firms face slowing growth rates, reduced profits or a potential cash crunch. On Friday, U.S. oil prices fell to a more than five-year low. The front-month oil contract lost 97 cents, or 1.5%, to settle at $65.84 a barrel on the New York Mercantile Exchange, exerting further downward pressure on many oil-company shares. Some investors are holding on to the shares of smaller and indebted drillers, reluctant to sell with prices so low. Others are paring back exposure, unwilling to ride out the volatility amid a global oil-supply glut that shows few signs of abating. "The earnings are going to go down, the revenues are going to go down and in some cases there will be concerns about liquidity," said Eric Green, a portfolio manager who helps manage $3 billion in equity investments at Penn Capital Management. Mr. Green owns a number of shares of smaller energy producers. He said he is hanging on, betting oil prices will rebound. Investors said crude prices could return to more lofty levels if a geopolitical shock erupts or global growth picks up. Energy companies have issued a flurry of debt to finance the yearslong boom in domestic oil and gas production. The 10 worst-performing energy companies in the Russell 3000 index over the past month have an average debt load that is four times their market value, compared with an average debt-to-equity ratio of 1.2 for the energy sector, according to data compiled by Michael O'Rourke, chief market strategist at JonesTrading. "If you look at the last couple of years, there's a number of insane junk deals that a lot of these energy companies have done," said Bill Bell, a portfolio manager on the Atlanta Capital SMID-Cap fund, which holds $5.9 billion of small and midsize companies. Junk bonds, those rated below investment grade, are issued by companies with relatively low credit ratings. Mr. Bell said his fund has reduced its holdings of energy stocks over the past year, from about 4% to less than 2%. Goodrich Petroleum, which drills for oil in higher-cost fields in Louisiana and Mississippi has a debt load of more than three times its stock-market value. Shares ran up as much as 74% this year to trade as high as $29.60 in June, when U.S. oil hit a high for the year at $107.26 a barrel. On Friday, the stock closed at $3.71, down 5.1% on the day. The company didn't respond to a request for comment. Energy XXI, which operates in the Gulf of Mexico area, has a debt load that is more than 11 times its market value. Shale producer Halcon Resources has a debt-to-equity ratio of more than 4 to 1. An Energy XXI spokesman said the company has hedged to protect against low oil prices through 2015, and "we're starting to work on our 2016 hedges as we speak." Halcon didn't respond to a request for comment. Rafaelina Lee, a portfolio manager who helps oversee about $800 million of small and midsize stocks for Deutsche Asset & Wealth Management, said she has curbed her holdings of companies producing in more costly locations. "Some smaller-cap names don't have as clean balance sheets," she said. "In these times of high uncertainty, a clean balance sheet is definitely required, as well as disciplined management." Investors said the outlook for energy producers depends largely on the direction of oil prices. U.S. crude output is expected to increase next year despite falling prices, which means a return to $100 oil is unlikely soon. Charles DyReyes, an analyst who focuses on energy stocks at Brandywine Global Investment Management, is combing through some battered shares of smaller energy firms. He said he expects oil prices to rebound in the coming year, possibly to $80 a barrel, an economical level for many producers. "I don't need oil at $100 to make money here," Mr. DyReyes said. Credit: By Dan Strumpf
Subject: Petroleum industry; Investment advisors; Debt restructuring; Junk bonds; Crude oil prices; Stock prices; Corporate debt
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Halcon Resources Corp; NAICS: 211111; Name: Energy XXI USA Inc; NAICS: 211111
Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2014
Publication date: Dec 6, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1632441320
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1632441320?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: An Ailing Venezuela Trims Oil Diplomacy
Author: Minaya, Ezequiel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Dec 2014: A.7.
Abstract:
"If Petrocaribe pulls out of Jamaica I don't know how we are going to manage," said Verona Barrett-Brown, the principal of a Kingston-area primary school that displays the name of Venezuela's national oil company, Petroleos de Venezuela, or PdVSA, on the wall.
Full text: KINGSTON, Jamaica -- Some Caribbean and Central American countries are bracing for cutbacks in shipments of cut-rate oil from Venezuela, as Caracas struggles with sliding crude prices and a spiraling economic crisis. For a decade, the 13 beneficiaries of Venezuela's largess have depended deeply on the oil to finance social spending and infrastructure, and rewarded Caracas with diplomatic support on the international stage, regional diplomats said in interviews. Even as Venezuela pledges to continue the program, the country's oil exports to the countries fell about 20% through October compared with the same period last year, says ClipperData LLC, a New York data tracker. And last year, Venezuela's cut-rate oil exports declined 15% from 2012, the International Monetary Fund says. Several participants in the program, called Petrocaribe, are preparing for further declines, which diplomats said stand to upend spending plans and tip some economies into recession. "If Petrocaribe pulls out of Jamaica I don't know how we are going to manage," said Verona Barrett-Brown, the principal of a Kingston-area primary school that displays the name of Venezuela's national oil company, Petroleos de Venezuela, or PdVSA, on the wall. "It will be a dark day." In tiny Grenada, the discounted Venezuelan oil funds 40% of social programs, from textbooks and free lunches for children to paying for roads and buses. Haiti named an airport after Venezuela's late President Hugo Chavez, who founded Petrocaribe in 2005, and uses the oil money for food distribution programs and for monthly allowances for the poor. The Dominican Republic has used the program to plug a fiscal hole. And here in Jamaica's capital, projects funded with Venezuelan oil have provided aid to small farmers and businesses, refurbished a zoo and replaced pit latrines in schools with toilets. But now, the IMF is warning regional governments "that the likelihood of disruption is more likely than it was because Venezuela is under greater pressure," said Adrienne Cheasty, deputy director of the IMF's Western Hemisphere unit. Venezuelan oil prices have fallen about a third since this summer to $61 a barrel as of Wednesday, which Deutsche Bank says is half of what is needed to cover the central government's budget. With inflation soaring and Wall Street expressing concerns about a default, President Nicolas Maduro announced on Dec. 3 that he would cut spending 20%. Venezuelan officials have made no public mention of cutbacks to Petrocaribe or other oil-aid programs, such as the arrangement to ship 99,000 barrels a day to Cuba in exchange for doctors who work in Venezuelan slums. Venezuelan Foreign Minister Rafael Ramirez recently reiterated his government's "strong commitment to continue the Petrocaribe initiative, under any circumstances." But a quiet shift is taking place. Honduras and Guatemala are now inactive in the program after Caracas toughened the terms, diplomats said. "Every barrel of oil PdVSA sends to a Petrocaribe country under preferential terms is one less barrel from which Venezuela can immediately derive a higher, market-based price to support the embattled economy," said Cory Gill, an associate with the energy researcher Goldwyn Global Strategies who co-wrote a report on Petrocaribe. The IMF calculates that Petrocaribe countries receive about 100,000 barrels a day from Venezuela. The lender says they will on average face a 1.6% hit to economic output if Venezuela turns off the oil tap, with highly dependent countries such as Haiti facing the most difficulty. Brian Wynter, governor of Jamaica's central bank, said his government is adjusting. "We are being very cautious by using projections of what we will use from Petrocaribe that are much lower than what the facility allows," he said. For years, Petrocaribe was mutually beneficial. Participating countries paid a fraction of market price upfront for oil, deferring the full cost through long-term loans with 25-year maturities and interest rates as low as 1%. Some governments sold the oil at full price or simply earmarked savings from not having to buy fuel at market prices for programs and infrastructure. Venezuela was repaid in rice, chicken, beans, jeans and other products that Jorge Pinon, director of the Latin America and Caribbean Energy Program at the University of Texas at Austin, said were sold at artificially high prices. The program has cost Venezuela $22.1 billion, with Petrocaribe countries accumulating more than $11 billion in debt through 2013, said Mr. Pinon, basing his calculations on PdVSA data. In return, Venezuela got loyal allies that voted with Venezuela at the United Nations, the Organization of American States and at other regional bodies, diplomats and officials from four countries said. In March, for instance, Venezuela's allies, including Petrocaribe countries, barred a prominent Venezuelan opposition leader's speech at the OAS from being broadcast publicly, the diplomats said. "You don't provide oil to all these countries on such sweet terms and not expect support in the U.N. and OAS," said a high-ranking official from one Caribbean nation. "That's just the way it works. That's just realpolitik." Credit: By Ezequiel Minaya
Subject: Diplomatic & consular services; Cost control; Recessions; Crude oil prices; Economic crisis; Government spending; Petroleum industry; Exports
Location: Venezuela Jamaica
People: Maduro, Nicolas Chavez, Hugo
Company / organization: Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Petroleos de Venezuela SA; NAICS: 211111
Classification: 1300: International trade & foreign investment; 8510: Petroleum industry; 9173: Latin America
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.7
Publication year: 2014
Publication date: Dec 6, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1632445251
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1632445251?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia's Oil Shakeout Shouldn't Stir Banking Fears; European Lenders' Exposure Looks Manageable
Author: Davies, Paul J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.
Abstract: None available.
Full text: Vladimir Putin is talking tough--but the falling oil price is making Russia weak. The Russian president has promised to bolster his country's banks with public money. He has taken potshots at the speculators he blames for the ruble's collapse. For investors, one worry is the risks to European banks through their lending to Russian clients and the oil industry in general. Thankfully, the exposures mostly look manageable. Fighting that with fiscal measures is tough because the government gets half its revenues from oil and gas taxes. In November, an oil price of $98 a barrel was needed to balance the budget, according to Fitch. Brent crude has since plunged to less than $70. Last month's decision toeases some strain. Its drop implies the budget-balancing oil price has dropped to about $82.50. But a slowing economy also means more reliance on oil receipts. The true break-even price might be nearer to $85. Mr. Putin hopes to stimulate the economy by giving Russia's banks more capital for lending. But credit risk is still rising. Take Société Générale, which has most direct Russian exposure among Europe's large banks: Its loan-loss provisions in the first nine months of 2014 rose 63% to [euro]243 million ($300.8 million) in the country. But its total loans in Russia, mostly mortgages and car loans, are [euro]13 billion, just 3.7% of all lending, and equivalent to about one-third of its core equity. If the French bank had to write off all equity and internal funding commitments to its Russian arm, that would cost only [euro]6.50 a share, reckons Nomura. With tangible net assets of [euro]51 a share and a stock price of [euro]39.28, investors have more than discounted this risk. Raiffeisen Bank's position looks more perilous: Its Russian exposure is more than double tangible net asset value and 1.6 times its core equity. ING Bank, meanwhile, lends directly into Russia. But it has been cutting back such loans, now just 1.4% of total loans and equivalent to less than one-quarter of core equity. Another risk is banks' exposure to the energy industry in general. Yet Europe's lenders have lost ground in this market, notes Citigroup. BNP Paribas is still the biggest European lender to the global oil industry. But its market share has dropped to 2.6% from 6% in 2009-10. HSBC, Royal Bank of Scotland, Barclays and SocGen are outside the top 10. There are still risks, especially in syndicated and high-yield bonds. In skittish markets, arrangers can be left holding more than planned. Since 2011, BNP, Credit Suisse and Barclays have been the top European arrangers of such deals, underwriting $43 billion, $33 billion and $31 billion of loans and bonds, respectively, notes Nomura. As Russia and the oil sector sputters, there will be blood. But European banks shouldn't spill too much. Credit: By Paul J. Davies
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 7, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633895382
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633895382?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon and M&A: The Crude AbidesExxon and M&A: The Crude Abides; Climate Improves for Exploration-and-Production Acquisitions
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.
Abstract:
Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.
Full text: Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices. Cheaper oil means pain for exploration-and-production companies--and the rising possibility that they seek sanctuary in each other's arms. Rumors of potential deals involving big companies such as Exxon Mobil and the U.K.'s BG Group are swirling. Yet while some deals may make sense, recent history means they will be cautious on placing that call to their banker. Mergers and acquisitions likely will become a bigger theme later in 2015. That isn't to deny that the conditions for M&A are falling into place. Witness oil-field-services giants Halliburton and Baker Hughes attempting a deal. In the past three months, oil has fallen by about 30% and E&P stocks have dropped 36%. Yet Exxon's shares have lost less than 5% of their value. In terms of its average multiple of enterprise value to forward earnings before interest, taxes, depreciation and amortization, the E&P sector now trades at roughly a 30% discount to Exxon, according to FactSet. That compares with an average premium of 8% and a maximum of almost 50% since 2007. Take BG, touted perennially as a takeover candidate: It now trades at a slight discount to Exxon versus an average premium of 34%. On paper, BG looks a likely candidate. It has world-class assets, notably in Brazil and its liquefied natural-gas business. But these are housed in a company suffering from executive turmoil, high sensitivity to oil prices and doubts about key projects being delivered on time. At current prices, Exxon could offer a 30% premium, funded 75% with its own stock, and, based on consensus estimates, this would be accretive to 2016 earnings by more than 20%, before synergies. Beware earnings forecasts when oil is sliding, though. And earnings accretion doesn't drive Exxon's M&A strategy anyway. When it bought XTO Energy in 2010, it said upfront it could be dilutive. That earlier deal is illustrative in another way, too. As Doug Terreson of Evercore ISI points out, what counts for Exxon is return on capital employed. XTO's was much lower, helping to cut Exxon's annual return to 18% last year from 34% in 2008. Exxon's valuation premium, and some of its reputation as a savvy deal maker, followed. Last year, BG's return on capital was about 10%. Any potential deal must also compete with Exxon's favorite acquisition target: its own stock. Over the past decade, Exxon has repurchased $220 billion of its shares, roughly equivalent to rival Chevron's current market value. With Exxon's borrowing costs below 5%, cost of equity at about 10%, and its net debt low, buybacks remain a formidable competitor to any deal. To overcome that, Exxon would need to see deeper, strategic value. With its long-term growth plans in Russia at risk in today's environment, Exxon could use some new, exciting opportunities. BG's Brazilian assets or an E&P company's U.S. shale prospects would fit that bill. With XTO's legacy still apparent, though, selling a strategic deal to investors requires Exxon securing an unambiguously bargain price. Given the dismal outlook for oil prices, that will get easier to do as next year unfolds. Credit: By Liam Denning
Subject: Acquisitions & mergers; Prices; Petroleum industry
Location: United Kingdom--UK
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 7, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633928431
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Consumer Stocks Draw Fans as Oil Sinks; Big-Box Stores, Auto-Parts Retailers Have Jumped; Some Investors Warn About Pricey Valuations
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.
Abstract:
Money managers are homing in on consumer-focused stocks after a sharp decline in oil prices that stands to improve U.S. household finances, though some warn that the biggest gains in those shares may already be history. Many investors reason that these firms stand to gain the most from tumbling energy costs because low-wage earners spend more of each paycheck than wealthier Americans on filling up, so lower gas prices give them funds they are likely to quickly deploy on household goods and other necessities.
Full text: Money managers are homing in on consumer-focused stocks after a sharp decline in oil prices that stands to improve U.S. household finances, though some warn that the biggest gains in those shares may already be history. Among the top beneficiaries from this fall's energy-price plunge have been big-box stores, low-price restaurants and auto-parts companies. Many investors reason that these firms stand to gain the most from tumbling energy costs because low-wage earners spend more of each paycheck than wealthier Americans on filling up, so lower gas prices give them funds they are likely to quickly deploy on household goods and other necessities. Shares of big-box giant Target Corp. have gained 18% this quarter, compared with the 5.2% advance by the S&P 500. Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30. Each cited falling gasoline prices in their latest profit reports as a positive for earnings. "It's clear the consumer is catching a break," said Margaret Vitrano, who manages $7.9 billion for ClearBridge Investments. "It isn't enough to go on a cruise, but it's enough to upgrade from chicken to steak." Ms. Vitrano owns Target shares, and thinks the Minneapolis retailer's sales should get a boost from the decline in gas prices. U.S. crude-oil prices have fallen 39% since June, amid flagging global demand and a strengthening dollar. On Friday, crude futures settled at $65.84 a barrel. Retail gasoline prices in the U.S. were down 17% on Friday from a year earlier, at an average $2.711 a gallon, according to auto club AAA. The recent declines should put at least an extra $40 billion in U.S. consumers' pockets in the fourth quarter of this year, according to an Oct. 27 report from Morgan Stanley. That would translate into about $42 per person each month, based on population estimates from the U.S. Census Bureau. That cash packs a bigger punch with lower-income consumers. Families with annual income below $50,000 spent, on average, about a fifth of their earnings on energy in 2012, according to Bank of America Merrill Lynch. In addition to retailers, beneficiaries have included other heavy users of energy, such as the airline sector, which is up 27% this quarter, road and rail stocks, up 6.8%, and gas and electric utilities, up 3.9% and 9.4%, respectively. By contrast, energy-equipment and services stocks in the S&P 500 are down 21% in the fourth quarter. But some investors already are warning that the rally has brought shares of retailers favored by low-income consumers to pricey levels. Stocks of many retailers are trading at higher valuations than broad market indexes, raising concerns that further gains could be limited. The shares could be vulnerable to disappointments during the holiday season, such as the recent weak Black Friday sales, which fell 11% from the year before, according to an industry trade group. "There are probably more gains to come,...[but] you probably need to be a little more selective," said Paul Karos, a portfolio manager with Denver-based Whitebox Mutual Funds, which manages more than $1 billion. "The big, quick bounce has already happened." O'Reilly, for example, is trading at 23 times next year's expected earnings, according to FactSet, above its 10-year average of 17.6 and well above the S&P 500, which is trading at 16.2 times next year's forecast earnings. The stocks in the SPDR S&P Retail exchange-traded fund are trading at 22 times Wall Street analysts' expected earnings for the next year, according to FactSet, above their 10-year average of 16. But many bullish retail investors say the gathering U.S. recovery will trump valuation concerns. On Friday, the government reported U.S. employers added 321,000 jobs in November, putting the economy on track for its best year of job growth since 1999. "If [the economy] keeps adding jobs, there are more people to spend," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages $9 billion. To be sure, falling gas prices are no panacea. Consumers are still pinched by soft wage gains and many still have yet to find full-time work. And within retail, not everyone has managed to capitalize. Shares of some teen-apparel retailers have fallen. Aeropostale Inc., for example, is down 25% this quarter, and tumbled 22% on Thursday, when it cut its forecasts for 2015. Abercrombie & Fitch Co. also recently cut its estimates for 2015's profit, and said its U.S. sales fell 7% in the quarter ended Nov. 2. Its stock is also down 25% in the fourth quarter. "The consumer is still very discerning about where they're spending their money," said Peter Dixon, who helps manage $2.5 billion of consumer stocks for Fidelity Investments, including the $810 million Fidelity Select Retailing Portfolio. Mr. Dixon owns shares of auto-parts retailers AutoZone Inc. and O'Reilly Automotive. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Retail stores; Stocks; Gasoline prices; Petroleum industry; Statistical data
Location: United States--US
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Bank of America Merrill Lynch; NAICS: 522110, 55 1111; Name: Bureau of the Census; NAICS: 926110; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Co stco Wholesale Corp; NAICS: 452910; Name: O Reilly Automotive Inc; NAICS: 441310; Name: Target Corp; NAICS: 452112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 7, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633928481
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633928481?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Refinery Symbolizes Woes of Brazilian Oil Firm Petrobras; Project, at Hub of Corruption Scandal, Is 3 Years Behind, $20 Billion Over Budget
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazil's newest refinery was supposed to reduce the nation's dependence on imported gasoline and signal a new era in Latin American energy independence. Instead, the refinery, the first built in Brazil in nearly 40 years, has come to symbolize big troubles at state-run oil company Petroleo Brasileiro SA. Three years behind schedule and nearly $20 billion over budget, the Abreu e Lima refinery, which opened Saturday, is at the center of a deepening corruption scandal plaguing Petrobras and newly re-elected President Dilma Rousseff. Earlier this year, federal police uncovered what they say was a scheme hatched by contractors and Petrobras executives to pay bribes to get contracts at the refinery and other projects, using some of the extra money to pay off local politicians and pocketing the rest. Last month, federal police in Brazil arrested 23 people, including a second former Petrobras executive and executives from more than 16 contractors, for their alleged roles in the kickback scheme. President Rousseff has acknowledged there was wrongdoing, and says the arrest show an era of "impunity" is over in Brazil. But the scandal tarnished what should have been a triumph for Petrobras. There was no ribbon-cutting ceremony or visit by state leaders when the refinery opened. "What we want as a state is for it to work, to create jobs and to generate tax revenue, whether there's a party or not," said Márcio Stefanni, secretary of economic development for Pernambuco state, where the refinery is located. He declined to comment on the troubles facing the project, which is largely supported by local politicians. Brazil's leaders were jubilant about the project in 2005. That year, Brazil's then-president Luiz Inácio Lula da Silva stood beaming alongside the late Venezuelan president, Hugo Chávez, at a cornerstone-laying ceremony for the refinery. Ms. Rousseff, then chairwoman of Petrobras, also was there. The refinery was named after a Brazilian freedom fighter that Mr. Chávez admired and would symbolize both a new partnership between Brazil and Venezuela and the start of a push toward Latin America energy independence. Venezuela, whose state-run oil company PDVSA had agreed to kick in 40% of the project funds in exchange for refining its oil at the facility, would be able to stop refining all of its oil in the U.S. Brazil would get a guaranteed customer for its flagship refinery. At the event, Mr. Chávez said the refinery would help South America overcome the "imperialism of the North." Many in the crowd, according to media reports at the time, wore T-shirts that read: "The refinery is ours." From the start, the project was beset by problems. The site of the refinery, in northeastern Brazil, is hundreds of miles away from most of the country's oil-industry infrastructure, and was criticized as a political choice. The refinery was dogged by delays, caused by everything from workers striking for better pay to heavy rains. Venezuela never contributed money to the project. Costs started to pile up, and were soon well past the original $2.5 billion estimate. Petrobras's most recent estimate of the total cost is $18.5 billion. Petrobras declined to comment for this article. In previous statements about Abreu e Lima, the company has attributed the cost overruns to premature cost assessments and "exchange rate adjustments." Earlier this year, federal police uncovered what they say was a cartel of construction company officials involved in overbilling for work at the refinery and other projects. Two former Petrobras executives in the company's refining and engineering units were arrested on money-laundering and fraud charges. Last month, more than 20 people allegedly involved in the case were arrested, including some of Brazil's wealthiest construction executives. "I believe that the criminal scheme had to do with the change in value [for contracts], which was far above what was reasonable," said Carlos Fernando dos Santos Lima, one of the eight federal prosecutors working on the case. In a separate investigation, Brazil's auditing body, known as the TCU, says there were "serious irregularities" at the refinery. The TCU estimates that the alleged overpayment for work at the refinery totals more than $145 million--including $27 million in overpayment for earth-moving services alone. Shares of Petrobras have taken a hit as the corruption investigation has gained steam, and losses have continued as the price of oil has plummeted. Petrobras shares hit a 10-year low Friday, closing at $8.82, and are down 54% over the past three months. Despite the project's problems, Petrobras had little choice but to push forward. Brazil's dependence on imports has more than doubled since 2007. The company's refining unit has lost $24 billion in the past four years, mostly because the company is forced to pay for a government-imposed fuel subsidy. "Abreu e Lima coming online, despite all the problems, is good news for the company," said Joao Augusto de Castro Neves, an analyst with the Eurasia Group. "But I think the government doesn't want to draw attention to Petrobras, even if it's good news." Today Petrobras has 12 refineries, which have a capacity of 2.1 million barrels per day. The company wants to boost that figure to 3.3 million barrels per day by 2020. The Abreu e Lima refinery will first start with a capacity of 115,000 barrels a day and eventually ramp up to 230,00 barrels a day next year, 70% of which will be diesel. Petrobras officials say the startup of the refinery will cut total fuel imports to Brazil by one third. Even when Abreu e Lima is up and running, Petrobras' refining division troubles won't be over. A separate refinery under construction in Rio de Janeiro, the Comperj facility, is expected to cost roughly $21 billion before completion in 2016, more than $7 billion above Petrobras' own estimate, according to the TCU. Paul Kiernan contributed to this article. Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 7, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633936836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633936836?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Qantas Forecasts Return to Profit on Falling Oil Prices, Cost Cuts; Airline Says All Operating Segments Expected to Be Profitable
Author: Ross, Kelly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Dec 2014: n/a.
Abstract:
SYDNEY--Qantas Airways Ltd. forecast a big swing back into the black as the tumbling oil price slashes its fuel bill and long-running cost-cutting measures bear fruit.
Full text: SYDNEY--Qantas Airways Ltd. forecast a big swing back into the black as the tumbling oil price slashes its fuel bill and long-running cost-cutting measures bear fruit. The Australian flag carrier said it expected profit in the six months through December, on a pretax underlying basis, of between 300 million Australian dollars ($249 million) and A$350 million. Qantas reported a loss of A$252 million in the same six months of last year. Previously, it had forecast a return to profit without giving specific numbers. The company didn't give any guidance on a bottom-line net-profit basis. All operating segments of the group, including its ailing international division, are expected to be profitable on an underlying pretax basis in what is the first half of its fiscal year, the company said. "Today we confirm that Qantas is set to report its best first-half result since 2010," Alan Joyce, the airline's chief executive said in a statement. "This demonstrates that the strategy we have outlined to transform our business is working." Qantas's recent difficulties have partly stemmed from an expensive three-year cost-cutting strategy that has included shedding thousands of workers, canceling aircraft orders and terminating poorly performing routes, such as to and from Germany. Redundancy costs, in particular, have dragged on earnings. But with the turnaround plan now almost complete, investors had been looking forward to a dramatic flow-through of cost savings. Falling jet-fuel prices are helping airlines everywhere, as oil plunges in response to the Organization of the Petroleum Exporting Countries's decision last month . Write to Ross Kelly at Credit: By Ross Kelly
Subject: Airlines; Corporate profits; Cost control; Airline industry
Company / organization: Name: Qantas Airways Ltd; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 7, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633936839
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633936839?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Trains at Junction in North Dakota; Fracking Companies Await Regulator's Decision on Stabilizing Crude Before Shipment
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
[...]of those concerns, both have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.
Full text: Oil producers in North Dakota are expected to face new regulations soon on treating their crude oil if the state's chief energy regulator follows through this week on promised standards aimed at ensuring that can be more safely shipped by rail. The North Dakota Industrial Commission will meet on Tuesday to complete steps it proposed last month that would require oil companies as of Feb. 1 next year to start removing volatile gaseous compounds before shipping their crude on railroads crisscrossing the country. The commission's decision will be closely watched because critics say the proposals don't go far enough while the oil industry has complained they go too far. North Dakota has felt pressure to act amid growing concern nationwide that Bakken crude poses a higher threat in a derailment or other accident. Production of light shale oil through hydraulic fracturing, or fracking, makes up the majority of the additional three million barrels a day of oil that the U.S. produces today compared with 2009. Much of that is shipped by rail, especially crude produced from Bakken Shale because of North Dakota's lack of pipelines. Some activists in North Dakota and a growing chorus of leaders in local municipalities and other states have raised questions about the safety of Bakken crude-by-rail shipments in the wake of a , including one in July 2013 that killed 47 people in a Quebec town. North Dakota's move toward mandating the stabilization or treatment of oil before shipment has been met with resistance from many producers in the state, who say it poses an unnecessary burden on the industry at a time when profits are being squeezed from a drop in global crude prices. "We're anxiously awaiting to see what the language looks like," said Kari Cutting, vice president of the North Dakota Petroleum Council, an industry lobby. "With the reduction in crude oil prices, we should be mindful of the regulatory impact of what [the state's] trying to accomplish," she said. The proposals would require heating oil in the field to remove dissolved gases such as butane and propane from the liquid. That would lower the vapor pressure and decrease the risk and size of a fireball if a railcar is punctured, a possibility North Dakota officials had previously played down. Many lighter crudes produced by fracking contain elevated levels of highly volatile gases, including those recovered from the Eagle Ford shale formation in Texas. But unlike the Bakken's light oil, Eagle Ford light crude is routinely stabilized before being shipped out by pipeline or rail to refineries. The Wall Street Journal reported in February that based on an at a pipeline in Louisiana, Bakken Shale had a far higher vapor pressure--making it much more likely to emit combustible gases--than dozens of other crude oils. Since then two industry-funded studies have attempted to debunk the notion that Bakken crude is more volatile than other types of oil. But some industry experts have questioned those studies' findings, saying they used outdated and unreliable crude testing methods to measure vapor pressure levels. As a result of those concerns, both have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing. Bakken oil producers have sought to modify the planned rules by petitioning the North Dakota Industrial Commission, some submitted minutes ahead of a comment period deadline six days after the proposals were announced on Nov. 13. Among other things, the industry wants to delay the implementation date, adopt a target instead of a maximum limit for vapor pressure and allow the use of older crude testing methods. But supporters of tougher regulations on oil shipments have urged the state not to scale back its initial draft order. "I certainly hope they don't backtrack," said Sen. Connie Triplett, a Democratic state legislator in North Dakota who registered her concerns about crude volatility in testimony before the North Dakota Industrial Commission in September. "We have to start somewhere and this is a reasonably positive first step," she said. The Week Ahead looks at coming corporate events. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Crude oil; Petroleum industry; Shipping industry; Crude oil prices; Hydraulic fracturing
Location: North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633945175
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633945175?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Decline Is Far From Confined; Impact of Falling Prices Likely to Be Felt Far Beyond Energy Sector
Author: Casey, Michael J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Some investors say that after six years of unprecedented monetary stimulus from the Federal Reserve and other big central banks, with more to come from the Bank of Japan and the European Central Bank, there are plenty of policy-induced distortions for speculators to go after, such as ultralow sovereign-bond yields in weaker European economies.
Full text: So far, few outside the energy sector have been hurt by this year's oil rout. But the ripples likely have only begun to be felt. Falling oil prices are on balance positive for energy consumers such as the U.S., and with the Dow Jones Industrial Average hitting a new record Friday, investor confidence appears intact. Yet some analysts and investors say a 39% plunge in crude futures since June could lay the groundwork for unpredictable market shifts and increasing price swings, or volatility. In a worst-case scenario, oil's selloff could ultimately result in a shock akin to the Asian currency crisis of 1997-98. That episode--which started with a devaluation by Thailand--rattled markets and economies around the globe after many traders initially misjudged it as minor and inconsequential. Most investors expect the U.S. economy and global markets to avoid such a fate this time. But the great lesson of the Asian crisis is that in a complex, global economy with many moving parts, a major change in one market's price will shift the relative value of multiple investment propositions, often with unpredictable consequences. "Economies and markets are like battleships: they can handle large changes as long as the large changes are gradual," said Jack Ablin, chief investment officer at BMO Private Bank. "When you have a 40% change within a six-month period for such an economically dominant commodity as oil, there are unforeseen side-effects." While beneficial to importers and consumers, this year's disorderly decline in oil will put the finances of drillers, commodity investors and even entire governments at risk. Importantly, it may also send a signal that prior assumptions about global economic demand were exaggerated, potentially prompting investors and businesses to scale back planned expenditures and forcing a revaluation of all assets. Some investors say that after six years of unprecedented monetary stimulus from the Federal Reserve and other big central banks, with more to come from the Bank of Japan and the European Central Bank, there are plenty of policy-induced distortions for speculators to go after, such as ultralow sovereign-bond yields in weaker European economies. As they did in 1997-98, "the artifices will have to break at some point," says Tad Rivelle, chief investment officer for fixed income at TCW Group. Thailand devalued its currency, the baht, in July 1997, altering Asia's competitive landscape, revealing weaknesses in other exchange-rate regimes and encouraging short-selling speculators to attack them. Twenty months later, a violent global rebalancing had led to devaluations in the South Korean won, the Indonesian rupiah, the Russian ruble and the Brazilian real. It also brought the giant Long-Term Capital Management hedge fund to the verge of collapse, prompting a rescue sponsored by the Federal Reserve. By that time, investors had grown so risk averse that even certain Treasury bonds looked risky. A trigger for a new round of financial or economic turmoil could easily come from numerous sources--if the Fed increases rates faster than expected, for example, or if China devalues the yuan. There are big imbalances in the global economy that leave it vulnerable to such shocks, and they contain some eerie parallels with 1997-98. Back then, oil prices also were plunging, as was the Russian ruble, which has dropped 38% this year. And like now, the dollar was rising, an Asian currency war was looming, there was talk of bubbles in tech stocks and other asset prices, and the U.S. was a bastion of growth in a sputtering global economy. To be sure, there are reasons to believe emerging markets are now more resilient. Emerging-market central banks have abandoned the pegged exchange rates that "made them sitting ducks" in the 1990s, Roubini Global Economics chairman Nouriel Roubini said, and built up large dollar reserves. The rise of local-currency bond markets reduces exposure to exchange-rate volatility, and last year's "taper tantrum" removed much of emerging markets' frothiness. But there are also some glaring, unsustainable distortions in global markets. Last week saw record lows on Spanish and Italian debt, the very same bonds that threatened to destroy the eurozone two years ago, and a mere 6.6% yield for Ethiopia's maiden 10-year bond sale. The Fed holds a key to how this plays out, just as it did with the Asian crisis. In March 1997, a mere quarter-point increase in the federal funds rate helped set off the crisis as it drew money out of emerging markets into U.S. assets and pushed up dollar-pegged emerging-market currencies to untenable heights. Now the risk is that a U.S. rate hike next year will hit overpriced emerging-market bonds hard, cutting off access to finance across the developing world. China also matters in a way akin to Japan's role 16 years ago. Back then, Japan's mid-1990s descent from industrial powerhouse to deflation-wracked basket case cut off a vital source of demand for Asia's dollar-pegged exporters. Now, it is China's slowdown that's spilling over into South Korea, Indonesia and other economies. "There was definitely a regional cycle back then with parallels to what's going on today," warns Harvard economics professor Kenneth Rogoff. "And now Asia's bigger than it was by a lot, with a global footprint." A vital question is how the People's Bank of China responds to the competitive challenge of a weaker Japanese yen and Korean won. If Beijing caves in and adopts the beggar-thy-neighbor policies in vogue at the moment, those ripples could become tidal waves. Write to Michael J. Casey at Credit: By Michael J. Casey
Subject: Central banks; Monetary policy; Banking; Prices; Financial executives; Emerging markets
Location: Thailand United States--US
Company / organization: Name: European Central Bank; NAICS: 521110; Name: Bank of Japan; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633948512
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices Spur New Bets on Global Economic Growth; Policy Makers Shrug Off Concerns That Tumbling Oil Costs Are Harbinger of Slowdown
Author: Talley, Ian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth.
Full text: Many of the world's top policy makers are rewriting their economic forecasts for the U.S., Europe, Japan and elsewhere, betting plummeting oil prices will lead to an overall boost in the global economy by delivering a windfall to consumers and manufacturers. Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. Instead, they project cheaper oil will be a shot in the arm for the world economy overall, especially countries with high energy tabs. Stanley Fischer, vice chairman of the U.S. Federal Reserve, called it a "supply shock" that will help the U.S. "It's more likely to increase GDP than reduce it," he said. "The effect is unambiguously positive," European Central Bank President Mario Draghi declared after the bank's . Some economists warn that the nearly 40% plunge in crude-oil prices in recent months is more a harbinger of gloom as Europe flirts with recession, from its own slump and risks morphing into a steeper pullback. Indeed, historically, sharp drops in oil prices tend to be associated with recessions as energy demand collapses. This time, though, a range of supply-boosting factors is shifting the calculus for many officials and economists--from advanced drilling techniques to a revival in Libyan oil supply and a bid by some Middle Eastern producers to price competitors out of the market. "This time is different," said Guy Caruso, a former head of the U.S. Energy Information Administration and a senior adviser at the Center for Strategic and International Studies, a nonpartisan think tank. Whether the recent price tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year. The cost of West Texas Intermediate crude has fallen into the mid-$60 a barrel range, down by about $40 a barrel since mid-June. Falling energy prices are clearly hurting major oil exporters such as Iraq, Algeria and Nigeria that rely heavily on petroleum revenues. It is particularly bad news for countries such as Russia, Venezuela and Iran already facing deep economic problems. But for major oil importers such as Japan, Italy and Germany, the IMF calculates the price plunge since June could add nearly a percentage point of gross domestic product to their economies. So far, Japan's economy appears to remain in the doldrums. It contracted for the second straight quarter in the July-to-September period, in Japan showed. GDP shrank an annualized 1.9% from the previous three-month period as private consumption showed little sign of life. The IMF is raising its forecast for U.S. growth next year to 3.5% from its last estimate of 3.1%, in part because of expected lower energy costs. "There will be winners and losers, but on a net-net basis, it's good news for the global economy," said IMF Managing Director Christine Lagarde at The Wall Street Journal last week. The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth. J.P. Morgan Chase economists put the ratio lower: 55% because of supply and 40% from weaker emerging-market growth. The bank still estimates, however, that the price decline could add 0.7 percentage point to global growth over the next two quarters. Part of the boost comes from lower transportation and manufacturing costs, particularly for energy-intensive industries such as airlines and steelmaking. The primary benefit is more cash in consumers' wallets as they spend less of their paychecks fueling their vehicles, spurring more consumer spending. Research group IHS Global Insight says the average U.S. household should have an extra $750 in its pockets over the next year compared with the last 12 months, if prices hold. One risk for policy makers: Viewing the drop in oil prices as a net positive could cloud an underlying sluggishness in the global economy. "It is impossible to ignore the role of weakening global demand," said Stephen King, HSBC's global chief economist. "Lower oil prices are partly a reflection of broader deflationary trends." Key emerging markets from Brazil to South Africa to India have been struggling for more than a year, partly driven by China's slowdown. "China is the big issue," said Kevin Book, managing director at consulting firm Clearview Energy Partners. Mr. Book is skeptical that growth in oil demand next year will come close to the International Energy Agency's estimate of 1.1 million barrels a day. The reason: slower growth than currently expected from the world's No. 2 economy. "And weakness in one place generally portends weakness elsewhere," especially in Europe, he said. "It seems unreasonable to think that the industrial engine of the emerging markets is somehow disconnected from the consuming engine of the developed world," Mr. Book said. Most previous major oil-price drops accompanied recessions, or at least signaled downturns. A series of contractions in the U.S. economy and other major powerhouses of the global economy in the early 1980s are blamed for sending inflation-adjusted prices from a high of $116 a barrel in April 1980 to a 13-year low of $25 by 1986. Prices also skidded in the wake of the Asian financial crisis in the late 1990s and the 2008 global financial crisis. Economists generally agree the current drop is partly due to anemic growth in Europe and a slowdown in China. But the IEA and other experts say outsize oil production is largely behind the decline. "It's mainly supply, with strong numbers from all over North America coming at a time when some of disrupted supply came back online," said Mr. Caruso of the Center for Strategic and International Studies. Advanced drilling techniques have allowed the U.S., Canada and other producers to ramp up production. Meanwhile, Saudi Arabia, Qatar and other have kept their wells running in a bid to price competitors out of the market. Since May, nearly 700,000 barrels of crude oil a day of unplanned OPEC production have come back online, largely in Libya. New technology and tightening regulations, particularly in the U.S., have also boosted fuel efficiency. Trevor Houser, a partner at the Rhodium Group consultancy and a fellow at the Peterson Institute for International Economics, estimates major oil-importing countries could see their import bills cut by more than $500 billion if prices remain low for another six to eight months. That includes roughly $90 billion for the U.S. alone. Global bank UBS AG estimates that every $10 decline in oil prices will add around 0.2 percentage point to global GDP. China, Japan, Germany, India, South Korea, Italy, France and a number of other countries spend a much higher percentage of GDP on crude purchases than the U.S. does. Japan, which spent around 3.6% of its GDP to pay for its oil imports in June, is one of the biggest beneficiaries. The drop in oil prices cuts the country's crude bill by nearly 1.2% of GDP. "I would be optimistic, indeed expectant, that the decline in oil prices is going to be something that is positive to the Japanese economy," Nathan Sheets, the U.S. Treasury's undersecretary for international affairs, said. Write to Ian Talley at Credit: By Ian Talley
Subject: Central banks; Petroleum industry; Prices; Economic development; Recessions; Economic growth; Gross Domestic Product--GDP; Economic forecasts; Economists
Location: United States--US Japan Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633948570
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633948570?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon and M&A: The Crude Abides; Climate Improves for Exploration-and-Production Acquisitions
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices.
Full text: Even as their colleagues on the trading floor wail, investment bankers can smile at falling oil prices. Cheaper oil means pain for exploration-and-production companies--and the rising possibility that they seek sanctuary in each other's arms. Rumors of potential deals involving big companies such as Exxon Mobil and the U.K.'s BG Group are swirling. Yet while some deals may make sense, recent history means they will be cautious on placing that call to their banker. Mergers and acquisitions likely will become a bigger theme later in 2015. That isn't to deny that the conditions for M&A are falling into place. Witness oil-field-services giants Halliburton and Baker Hughes attempting a deal. In the past three months, oil has fallen by about 30% and E&P stocks have dropped 36%. Yet Exxon's shares have lost less than 5% of their value. In terms of its average multiple of enterprise value to forward earnings before interest, taxes, depreciation and amortization, the E&P sector now trades at roughly a 30% discount to Exxon, according to FactSet. That compares with an average premium of 8% and a maximum of almost 50% since 2007. Take BG, touted perennially as a takeover candidate: It now trades at a slight discount to Exxon versus an average premium of 34%. On paper, BG looks a likely candidate. It has world-class assets, notably in Brazil and its liquefied natural-gas business. But these are housed in a company suffering from executive turmoil, high sensitivity to oil prices and doubts about key projects being delivered on time. At current prices, Exxon could offer a 30% premium, funded 75% with its own stock, and, based on consensus estimates, this would be accretive to 2016 earnings by more than 20%, before synergies. Beware earnings forecasts when oil is sliding, though. And earnings accretion doesn't drive Exxon's M&A strategy anyway. When it bought XTO Energy in 2010, it said upfront it could be dilutive. That earlier deal is illustrative in another way, too. As Doug Terreson of Evercore ISI points out, what counts for Exxon is return on capital employed. XTO's was much lower, helping to cut Exxon's annual return to 18% last year from 34% in 2008. Exxon's valuation premium, and some of its reputation as a savvy deal maker, followed. Last year, BG's return on capital was about 10%. Any potential deal must also compete with Exxon's favorite acquisition target: its own stock. Over the past decade, Exxon has repurchased $220 billion of its shares, roughly equivalent to rival Chevron's current market value. With Exxon's borrowing costs below 5%, cost of equity at about 10%, and its net debt low, buybacks remain a formidable competitor to any deal. To overcome that, Exxon would need to see deeper, strategic value. With its long-term growth plans in Russia at risk in today's environment, Exxon could use some new, exciting opportunities. BG's Brazilian assets or an E&P company's U.S. shale prospects would fit that bill. With XTO's legacy still apparent, though, selling a strategic deal to investors requires Exxon securing an unambiguously bargain price. Given the dismal outlook for oil prices, that will get easier to do as next year unfolds. Write to Liam Denning at Credit: By Liam Denning
Subject: Acquisitions & mergers; Prices; Petroleum industry
Location: United Kingdom--UK
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633952897
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633952897?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia's Oil Shakeout Shouldn't Stir Banking Fears; European Lenders' Exposure Looks Manageable
Author: Davies, Paul J
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract: None available.
Full text: Vladimir Putin is talking tough--but the falling oil price is making Russia weak. The Russian president has promised to bolster his country's banks with public money. He has taken potshots at the speculators he blames for the ruble's collapse. For investors, one worry is the risks to European banks through their lending to Russian clients and the oil industry in general. Thankfully, the exposures mostly look manageable. Fighting that with fiscal measures is tough because the government gets half its revenues from oil and gas taxes. In November, an oil price of $98 a barrel was needed to balance the budget, according to Fitch. Brent crude has since plunged to less than $70. Last month's decision to eases some strain. Its drop implies the budget-balancing oil price has dropped to about $82.50. But a slowing economy also means more reliance on oil receipts. The true break-even price might be nearer to $85. Mr. Putin hopes to stimulate the economy by giving Russia's banks more capital for lending. But credit risk is still rising. Take Société Générale, which has most direct Russian exposure among Europe's large banks: Its loan-loss provisions in the first nine months of 2014 rose 63% to [euro]243 million ($300.8 million) in the country. But its total loans in Russia, mostly mortgages and car loans, are [euro]13 billion, just 3.7% of all lending, and equivalent to about one-third of its core equity. If the French bank had to write off all equity and internal funding commitments to its Russian arm, that would cost only [euro]6.50 a share, reckons Nomura. With tangible net assets of [euro]51 a share and a stock price of [euro]39.28, investors have more than discounted this risk. Raiffeisen Bank's position looks more perilous: Its Russian exposure is more than double tangible net asset value and 1.6 times its core equity. ING Bank, meanwhile, lends directly into Russia. But it has been cutting back such loans, now just 1.4% of total loans and equivalent to less than one-quarter of core equity. Another risk is banks' exposure to the energy industry in general. Yet Europe's lenders have lost ground in this market, notes Citigroup. BNP Paribas is still the biggest European lender to the global oil industry. But its market share has dropped to 2.6% from 6% in 2009-10. HSBC, Royal Bank of Scotland, Barclays and SocGen are outside the top 10. There are still risks, especially in syndicated and high-yield bonds. In skittish markets, arrangers can be left holding more than planned. Since 2011, BNP, Credit Suisse and Barclays have been the top European arrangers of such deals, underwriting $43 billion, $33 billion and $31 billion of loans and bonds, respectively, notes Nomura. As Russia and the oil sector sputters, there will be blood. But European banks shouldn't spill too much. Write to Paul J. Davies at Credit: By Paul J. Davies
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633958630
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Fund Fiend; Changed World for Energy-Stock Pros; Oil Prices Used to Call the Tune, but Now the Companies Matter
Author: Lauricella, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Among other stocks in the fund that he says are benefiting from this strategy of focusing on costs are EOG Resources Inc., Anadarko Petroleum Corp. and Cimarex Energy Co. As for oil prices, Mr. Dowd says he simply isn't sure where they will settle.
Full text: As manager of the $1.9 billion Fidelity Select Energy Portfolio, John Dowd can't ignore the 38% drop in oil prices over the past few months. But Mr. Dowd, an energy analyst since 1990 and manager of the Fidelity fund since 2006, says that for many of the stocks he invests in, swings in oil prices matter much less than they used to. "There was a time in the '90s and 2000s where being an energy [stock] analyst meant basically getting [the] call on the commodity right," he says. "With the advent of the U.S. shale-oil story, it's become something different." Energy stocks still get knocked around in the short term by ups and downs in oil prices. But he says that these days, getting the longer-term calls right is more about analyzing energy companies' cost structures and development plans--in other words, just like most other kinds of stocks. A sharp drop in the price of oil has been one of the big surprises of 2014. Leading prices lower has been a pair of powerful forces: a slowing global economy at a time when production in the U.S. has been soaring, thanks to the U.S. shale-oil boom and advances in drilling technologies. Against this backdrop, Mr. Dowd's fund is down 11.95% this year through November, while the average energy-stock fund is off 13.55% and Energy Select Sector SPDR, which tracks an index of energy stocks, has dropped 8.49%, according to Morningstar. Over the past five years, the Fidelity fund has returned 6.32%, trailing the SPDR ETF but ahead of the average 2.9% gain of funds in the group. As evidence of the new dynamic among energy stocks, Mr. Dowd points to the multiyear period starting in 2010, during which natural-gas prices plunged by roughly two-thirds at their lows. Ordinarily that would have been devastating for drilling stocks as the price of the gas they produced collapsed. Instead, shares of some of the gas drillers held by the fund soared. One was Noble Energy Inc., which went from a low around $30 in June 2010 to around $48 in April 2012. "The idea that you could invest in a low-cost natural-gas company growing production at 40% and actually making money in a declining price environment would have been heresy," says Mr. Dowd. "But it worked." The trick, he says, is to "get the cost structure right, and own either the companies lowest on the cost curve or else the companies that are driving the costs lower." He says this means investors have to be selective when it comes to U.S. exploration-and-production firms, where costs at many producers are still trending higher despite technology advances. At the same time, most of the new production is coming from just a handful of regions, most notably North Dakota and West Texas. "It's not as if every company owns these resources and also manages costs lower," he says. Among other stocks in the fund that he says are benefiting from this strategy of focusing on costs are EOG Resources Inc., Anadarko Petroleum Corp. and Cimarex Energy Co. As for oil prices, Mr. Dowd says he simply isn't sure where they will settle. At $110, where oil was late last year, production jumps, he says. Below $80, production may slow but he expects demand to accelerate. That, he says, would suggest oil holding largely in that range. But, he says, "I'm not spending all my time focused on the wiggles of crude." Send questions and comments to Mr. Lauricella at Credit: By Tom Lauricella
Subject: Energy industry; Petroleum industry; Costs; Prices; Stocks; Natural gas
Location: United States--US
Company / organization: Name: Noble Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633962156
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633962156?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Stree t Journal
Corporate News -- The Week Ahead: Oil Trains at Junction in North Dakota
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: B.2.
Abstract:
[...]of those concerns, both U.S. and Canadian federal authorities have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing.
Full text: Energy producers in North Dakota are expected to face new regulations soon on treating their crude oil if the state's chief energy regulator follows through this week on promised standards aimed at ensuring that Bakken Shale crude oil can be more safely shipped by rail. The North Dakota Industrial Commission will meet on Tuesday to complete steps it proposed last month that would require oil companies as of Feb. 1 next year to start removing volatile gaseous compounds before shipping their crude on railroads crisscrossing the country. The commission's decision will be closely watched because critics say the proposals don't go far enough while the oil industry has complained they go too far. North Dakota has felt pressure to act amid growing concern nationwide that Bakken crude poses a higher threat in a derailment or other accident. Production of light shale oil through hydraulic fracturing, or fracking, makes up the majority of the additional three million barrels a day of oil that the U.S. produces today compared with 2009. Much of that is shipped by rail, especially crude produced from Bakken Shale because of North Dakota's lack of pipelines. Some activists in North Dakota and a growing chorus of leaders in local municipalities and other states have raised questions about the safety of Bakken crude-by-rail shipments in the wake of a series of fiery train explosions, including one in July 2013 that killed 47 people in a Quebec town. North Dakota's move toward mandating the stabilization or treatment of oil before shipment has been met with resistance from many producers in the state, who say it poses an unnecessary burden on the industry at a time when profits are being squeezed from a drop in global crude prices. "We're anxiously awaiting to see what the language looks like," said Kari Cutting, vice president of the North Dakota Petroleum Council, an industry lobby. "With the reduction in crude oil prices, we should be mindful of the regulatory impact of what [the state's] trying to accomplish," she said. The proposals would require heating oil in the field to remove dissolved gases such as butane and propane from the liquid. That would lower the vapor pressure and decrease the risk and size of a fireball if a railcar is punctured, a possibility North Dakota officials had previously played down. Many lighter crudes produced by fracking contain elevated levels of highly volatile gases, including those recovered from the Eagle Ford shale formation in Texas. But unlike the Bakken's light oil, Eagle Ford light crude is routinely stabilized before being shipped out by pipeline or rail to refineries. The Wall Street Journal reported in February that based on an analysis of data collected at a pipeline in Louisiana, Bakken Shale had a far higher vapor pressure -- making it much more likely to emit combustible gases -- than dozens of other crude oils. Since then two industry-funded studies have attempted to debunk the notion that Bakken crude is more volatile than other types of oil. But some industry experts have questioned those studies' findings, saying they used outdated and unreliable crude testing methods to measure vapor pressure levels. As a result of those concerns, both U.S. and Canadian federal authorities have ordered new crude oil tests using methods designed to prevent dissolved gases, known as light ends, from escaping before and during testing. Bakken oil producers have sought to modify the planned rules by petitioning the North Dakota Industrial Commission, some submitted minutes ahead of a comment period deadline six days after the proposals were announced on Nov. 13. Among other things, the industry wants to delay the implementation date, adopt a target instead of a maximum limit for vapor pressure and allow the use of older crude testing methods. But supporters of tougher regulations on oil shipments have urged the state not to scale back its initial draft order. "I certainly hope they don't backtrack," said Sen. Connie Triplett, a Democratic state legislator in North Dakota who registered her concerns about crude volatility in testimony before the North Dakota Industrial Commission in September. "We have to start somewhere and this is a reasonably positive first step," she said. --- The Week Ahead looks at coming corporate events. Credit: By Chester Dawson
Subject: Crude oil; Petroleum industry; Shipping industry; Crude oil prices; Hydraulic fracturing
Location: United States--US North Dakota
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Dec 8, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633981471
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633981471?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Weak Oil Prices Will Hurt Bahrain, Oman Credit: Moody's; Oil's Fall Puts Increasing Pressure on Persian Gulf Producers' Strained Finances, Says Moody's
Author: Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
DUBAI--Weaker oil prices will adversely affect the sovereign credit profiles of Bahrain and Oman, because of the Persian Gulf countries' strained government finances and limited financial reserves, Moody's Investors Service said in a report on Monday.
Full text: DUBAI--Weaker oil prices will adversely affect the sovereign credit profiles of Bahrain and Oman, because of the Persian Gulf countries' strained government finances and limited financial reserves, Moody's Investors Service said in a report on Monday. Crude oil futures for delivery in Januaryin New York late last week, reaching a five-year low and extending a slide that began this summer, when the commodity traded above $100 a barrel. The fall has fueled concerns that Persian Gulf producers' oil-funded government finances could come under increasing pressure, forcing them to cut spending or run large deficits. Most Gulf countries need oil to trade at above $75 a barrel this year to sustain current spending levels, according to the International Monetary Fund. Bahrain and Oman are especially vulnerable because they need oil prices to stay high and don't have large financial backstops to pay for budget deficits, meaning they would likely have to borrow money if prices continue to slide, Moody's said. The IMF estimates Bahrain needs a $125-a-barrel oil price this year to balance its budget without spending adjustments, while Oman needs the price to average $99 a barrel. Moody's estimates oil prices to average between $80 and $85 a barrel next year. Among the four other Gulf countries--Saudi Arabia, Kuwait, Qatar and the United Arab Emirates--Kuwait and Qatar would be most resilient to a period of lower oil prices, Moody's said, due to their large reserves and muted spending relative to energy revenues. Saudi and the U.A.E. are somewhat more strained, Moody's said, in part because of a massive ramp-up in spending in recent years. Following Arab Spring unrest elsewhere in the Middle East, Persian Gulf countries went onon hospitals, schools, infrastructure and housing for citizens to forestall domestic unrest. The ratings agency now expects Saudi, the world's second-largest oil producer after the U.S., to run a fiscal deficit in 2015. Persian Gulf governments would respond to lower oil prices by curtailing spending, slowing down large projects and looking at subsidy reform, Moody's said. Raising existing taxes could also be in play as a revenue-generating measure. Write to Asa Fitch at Credit: By Asa Fitch
Subject: Petroleum industry; Prices; Budget deficits; Crude oil
Location: Oman Bahrain Qatar Kuwait Persian Gulf
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633983376
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633983376?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
South African Rand Hurt by Current-Account Deficit; Weak Oil Prices Haven't Had the Current-Account Impact Economists Expected
Author: McGroarty, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
PRETORIA, South Africa--South Africa's rand dropped to a six-year low on Monday after government data showed that weak oil prices haven't helped the energy-importing nation narrow its wide current-account deficit as much as economists had hoped.
Full text: PRETORIA, South Africa--South Africa's rand dropped to a six-year low on Monday after government data showed that weak oil prices haven't helped the energy-importing nation narrow its wide current-account deficit as much as economists had hoped. The rand traded near 11.50 to the dollar on Monday morning, down more than 1% from Friday and extending the currency's 10% plunge this year. The currency tanked after the South African Reserve Bank said the country's current-account deficit was equal to 6% of gross domestic product in the third quarter. That was better than the 6.3% gap recorded in the second quarter but worse than the 5.8% deficit economists expected. South Africa imports the oil it uses to power vehicles and run diesel electricity generators, so a 40% drop in Brent Crude prices since June is a boon to the government, businesses and individuals alike. But broadly softer demand for commodities also weighed on the value of South Africa's gold and iron-ore exports, the central bank said, tempering the positive effect. Africa's most sophisticated economy is expected to grow just 1.4% this year, extending a three-year deceleration. The official unemployment rate is hovering above 25%. Long and sometimes violent strikes weighed on output this year and the country's dilapidated power plants have prompted rolling blackouts that officials say could continue for a year or more. "The continued sluggish economic growth bodes ill for the trajectory of government tax revenue, the fiscal deficit and government debt," the bank wrote in its quarterly report on the economy. Moody's Investors Service in November cut South Africa's foreign debt rating by one notch to Baa2, saying the power shortages and labor turmoil had eroded its creditworthiness. Fitch Ratings is due to release its latest assessment of the country's creditworthiness on Friday. "The outlook for future growth is weak," Razia Khan, an economist at Standard Chartered, wrote in a note to clients. "Coming ahead of the Fitch Ratings review of South Africa on Friday, this will only add to the list of negatives currently facing South Africa." Write to Patrick McGroarty at Credit: By Patrick McGroarty
Subject: Economic growth; Gross Domestic Product--GDP
Location: South Africa
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: South African Reserve Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633984820
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633984820?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tumble in Oil Prices Spurs New Bets on Global Growth
Author: Talley, Ian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: A.1.
Abstract:
The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth.
Full text: Many of the world's top policy makers are rewriting their economic forecasts for the U.S., Europe, Japan and elsewhere, betting plummeting oil prices will lead to an overall boost in the global economy by delivering a windfall to consumers and manufacturers. Officials at the International Monetary Fund, U.S. Federal Reserve and European Central Bank have in recent days shrugged off concerns that the tumbling cost of crude signals a global slowdown. Instead, they project cheaper oil will be a shot in the arm for the world economy overall, especially countries with high energy tabs. Stanley Fischer, vice chairman of the U.S. Federal Reserve, called it a "supply shock" that will help the U.S. "It's more likely to increase GDP than reduce it," he said. "The effect is unambiguously positive," European Central Bank President Mario Draghi declared after the bank's monthly meeting last week. Some economists warn that the nearly 40% plunge in crude-oil prices in recent months is more a harbinger of gloom as Europe flirts with recession, Japan tries to recover from its own slump and China's slowing growth risks morphing into a steeper pullback. Indeed, historically, sharp drops in oil prices tend to be associated with recessions as energy demand collapses. This time, though, a range of supply-boosting factors is shifting the calculus for many officials and economists -- from advanced drilling techniques to a revival in Libyan oil supply and a bid by some Middle Eastern producers to price competitors out of the market. "This time is different," said Guy Caruso, a former head of the U.S. Energy Information Administration and a senior adviser at the Center for Strategic and International Studies, a nonpartisan think tank. Whether the recent price tumble is driven more by a supply glut or a drop in demand could determine the direction of the global economy in the coming year.Falling energy prices are clearly hurting major oil exporters such as Iraq, Algeria and Nigeria that rely heavily on petroleum revenues. It is particularly bad news for countries such as Russia, Venezuela and Iran already facing deep economic problems. But for major oil importers such as Japan, Italy and Germany, the IMF calculates the price plunge since June could add nearly a percentage point of gross domestic product to their economies. So far, Japan's economy remains in the doldrums. It contracted for the second straight quarter in the July-to-September period, revised data released Monday showed. GDP shrank an annualized 1.9% from the previous three-month period as private consumption showed little sign of life. The IMF is raising its forecast for U.S. growth next year to 3.5% from its last estimate of 3.1%, in part because of expected lower energy costs. "There will be winners and losers, but on a net-net basis, it's good news for the global economy," said IMF Managing Director Christine Lagarde at The Wall Street Journal CEO Council meeting last week. The fund attributes roughly 80% of the fall in oil prices to supply-side causes, such as fuel-efficiency standards and decisions by the Organization of the Petroleum Exporting Countries, and only 20% to declining demand from slowing growth. J.P. Morgan Chase economists put the ratio lower: 55% because of supply and 40% from weaker emerging-market growth. The bank still estimates, however, that the price decline could add 0.7 percentage point to global growth over the next two quarters. Part of the boost comes from lower transportation and manufacturing costs, particularly for energy-intensive industries such as airlines and steelmaking. The primary benefit is more cash in consumers' wallets as they spend less of their paychecks fueling their vehicles, spurring more consumer spending. Research group IHS Global Insight says the average U.S. household should have an extra $750 in its pockets over the next year compared with the last 12 months, if prices hold. One risk for policy makers: Viewing the drop in oil prices as a net positive could cloud an underlying sluggishness in the global economy.Key emerging markets from Brazil to South Africa to India have been struggling for more than a year. "China is the big issue," said Kevin Book, managing director at consulting firm Clearview Energy Partners. Mr. Book is skeptical that growth in oil demand next year will come close to the International Energy Agency's estimate of 1.1 million barrels a day. The reason: slower growth than currently expected from the world's No. 2 economy. "And weakness in one place generally portends weakness elsewhere," especially in Europe, he said. "It seems unreasonable to think that the industrial engine of the emerging markets is somehow disconnected from the consuming engine of the developed world," Mr. Book said. Most previous major oil-price drops accompanied recessions, or at least signaled downturns. A series of contractions in the U.S. economy and other major powerhouses of the global economy in the early 1980s are blamed for sending inflation-adjusted prices from a high of $116 a barrel in April 1980 to a 13-year low of $25 by 1986. Prices also skidded in the wake of the Asian financial crisis in the late 1990s and the 2008 global financial crisis. Economists generally agree the current drop is partly due to anemic growth in Europe and a slowdown in China. But the IEA and other experts say outsize oil production is largely behind the decline. "It's mainly supply, with strong numbers from all over North America coming at a time when some of disrupted supply came back online," said Mr. Caruso of the Center for Strategic and International Studies. Advanced drilling techniques have allowed the U.S., Canada and other producers to ramp up production. Meanwhile, Saudi Arabia, Qatar and other OPEC member countries have kept their wells running. Since May, nearly 700,000 barrels of crude oil a day of unplanned OPEC production have come back online, largely in Libya. Trevor Houser, a partner at the Rhodium Group consultancy and a fellow at the Peterson Institute for International Economics, estimates major oil-importing countries could see their import bills cut by more than $500 billion if prices remain low for another six to eight months. Japan, which spent around 3.6% of its GDP to pay for its oil imports in June, stands to be a big beneficiary. The drop in oil prices cuts the country's crude bill by nearly 1.2% of GDP. "I would be optimistic, indeed expectant, that the decline in oil prices is going to be something that is positive to the Japanese economy," Nathan Sheets, the U.S. Treasury's undersecretary for international affairs, said. Credit: By Ian Talley
Subject: Central banks; Petroleum industry; Prices; Economic development; Recessions; Economic growth; Gross Domestic Product--GDP; Economists; Economic forecasts
Location: United States--US China Japan Europe
Classification: 9180: International; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 8, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, Ne w York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633988805
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633988805?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Retail Stocks Rally on Cheaper Oil --- Investors Wager Low-Income Shoppers Have More to Spend at Big-Box Stores; Valuations Get Pricier
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Dec 2014: C.1.
Abstract:
Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30.
Full text: Money managers are homing in on consumer-focused stocks following a sharp decline in oil prices that stands to improve U.S. household finances, though some warn that the biggest gains in those shares may already be history. Among the top beneficiaries from this fall's energy-price plunge have been big-box stores, low-price restaurants and auto-parts companies. Many investors reason that these firms stand to gain the most from tumbling energy costs because low-wage earners spend more of each paycheck than wealthier Americans on filling up, so lower gas prices give them funds they are likely to quickly deploy on household goods and other necessities. Shares of retail giant Target Corp. have gained 18% this quarter, compared with a 5.2% advance by the S&P 500. Auto-parts retailer O'Reilly Automotive Inc. is up 25%, Costco Wholesale Corp. has added 14% and Wal-Mart Stores Inc. has risen 10% since Sept. 30. In their latest profit reports, each cited falling gasoline prices as a positive for earnings. "It's clear the consumer is catching a break," said Margaret Vitrano, who manages $7.9 billion for ClearBridge Investments. "It isn't enough to go on a cruise, but it's enough to upgrade from chicken to steak." Ms. Vitrano owns Target shares, and thinks the Minneapolis-based retailer's sales should get a boost from the decline in gas prices. U.S. crude-oil prices have fallen 39% since June amid flagging global demand and a strengthening dollar. On Friday, crude futures settled at $65.84 a barrel. Retail gasoline prices in the U.S. were down 17% on Friday from a year earlier, at an average $2.711 a gallon, according to auto club AAA. The recent declines should put at least an extra $40 billion in U.S. consumers' pockets in the fourth quarter of this year, according to an Oct. 27 report from Morgan Stanley. That would translate into about $42 a person each month, based on population estimates from the U.S. Census Bureau. That cash packs a bigger punch with lower-income consumers. Families with annual income below $50,000 spent, on average, about one-fifth of their earnings on energy in 2012, according to Bank of America Merrill Lynch. In addition to retailers, beneficiaries have included other heavy users of energy, such as the airline sector, which is up 27% this quarter, road and rail stocks, up 6.8%, and gas and electric utilities, up 3.9% and 9.4%, respectively. By contrast, energy-equipment and -services stocks in the S&P 500 are down 21% in the fourth quarter. But some investors already are warning that the rally has brought shares of retailers favored by low-income consumers to pricey levels. Stocks of many retailers are trading at higher valuations than broad market indexes, raising concerns that further gains could be limited. The shares could be vulnerable to disappointments during the holiday season, such as the recent weak Black Friday sales, which fell 11% from the year before, according to an industry trade group. "There are probably more gains to come, . . . [but] you probably need to be a little more selective," said Paul Karos, a portfolio manager with Denver-based Whitebox Mutual Funds, which manages more than $1 billion. "The big, quick bounce has already happened." O'Reilly, for example, is trading at 23 times next year's expected earnings, according to FactSet, above its 10-year average of 17.6 and well above the S&P 500, which is trading at 16.2 times next year's forecast earnings. The stocks in the SPDR S&P Retail exchange-traded fund are trading at 22 times analysts' expected earnings for the next year, according to FactSet, above their 10-year average of 16. But many bullish retail investors say the gathering U.S. recovery will trump valuation concerns. On Friday, the government reported U.S. employers added 321,000 jobs in November, putting the economy on track for its best year of job growth since 1999. "If [the economy] keeps adding jobs, there are more people to spend," said Ralph Segall, chief investment officer of Chicago-based Segall Bryant & Hamill, which manages $9 billion. To be sure, falling gas prices are no panacea. Consumers are still pinched by soft wage gains and many still have yet to find full-time work. And within retail, not everyone has managed to capitalize. Shares of some teen-apparel retailers have fallen. Aeropostale Inc., for example, is down 25% this quarter, and tumbled 22% on Thursday, when it cut its forecasts for 2015. Abercrombie & Fitch Co. also recently lowered its estimates for 2015 profit. Its stock is down 25% this quarter. "The consumer is still very discerning about where they're spending their money," said Peter Dixon, who helps manage $2.5 billion of consumer stocks for Fidelity Investments, including the $810 million Fidelity Select Retailing Portfolio. Mr. Dixon owns shares of auto-parts retailers AutoZone Inc. and O'Reilly. Credit: By Alexandra Scaggs
Subject: Abreast of the market (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 8, 2014
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633988810
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633988810?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Falls to New Lows; Prices Skid on Weaker-than-Expected Economic Data in China and Japan
Author: Friedman, Nicole; Copeland, Rob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
A decision by the Organization of the Petroleum Exporting Countries last month to maintain its production ceiling further cemented a belief among investors, analysts, oil-company executives and industry officials that the world will remain awash in crude well into 2015. Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows.
Full text: Oil prices skidded to fresh five-year lows Monday, as lackluster readings on Asian economies and a price cut by Iraq heightened concerns about a global supply glut. A decision by the Organization of the Petroleum Exporting Countries last month to maintain its production ceiling further cemented a belief among investors, analysts, oil-company executives and industry officials that the world will remain awash in crude well into 2015. While oil's fall has hurt the finances of oil-exporting nations, it has been a boon for consumers and is likely to provide a tailwind for global growth. The drop in prices also has rattled currency markets, prompted some energy companies to reduce spending and hammered energy stocks. U.S. oil prices ended $2.79, or 4.2%, lower at $63.05 a barrel on the New York Mercantile Exchange, the lowest level since July 16, 2009. Nymex oil futures are down 36% this year. Brent crude, the global benchmark, fell $2.88, or 4.2%, to $66.19 a barrel, the lowest level since Sept. 29, 2009. Brent is down 40% in 2014. The decline extends a six-month selloff in crude driven by rising production in the U.S. and elsewhere. The tumble in oil began overnight but accelerated during the New York trading day. The average per-gallon price of regular gasoline in the U.S. is $2.67, the lowest since February 2010, according to AAA. The motor club predicted Monday that the national average could fall to $2.50 a gallon or lower by the end of the year. The sharp move in crude oil weighed on shares of energy companies, helping send major U.S. stock indexes lower. The Dow Jones Industrial Average lost 106.31 points to 17852.48. A benchmark U.S. oil price below $65 a barrel poses challenges for oil companies drilling in shale-rock formations, the source of the U.S. oil boom, some analysts say. Certain operations will be money-losing with oil below that mark, they say. "It's getting close to the marginal cost for shale production in North America," said Michael Hiley, an energy trader at brokerage LPS Partners Inc. "I think guys are very nervous." Iraq on Monday for Asian and American buyers, but it raised it for European customers, in line with similar moves earlier this month by Saudi Arabia, the world's largest oil exporter. Market watchers say these price cuts indicate producers' desire to protect their market share during the downdraft, a stance that is likely to result in a steady flow of barrels. Saudi Arabia's King Abdullah announced a shake-up of the kingdom's government Monday but kept veteran oil minister Ali al-Naimi in place. Mr. Naimi was instrumental in OPEC's decision to maintain its production target. Producers and traders are scrambling to find buyers at a time of a slowdown in Asia, which previously had been hailed as the growth engine for the oil market and a justification for triple-digit prices. Data released Monday showed Japan's economy contracted 1.9% in the third quarter, more than previously estimated, while Chinese export growth fell below expectations and imports fell. China and Japan are the world's No. 2 and 3 oil-consuming nations after the U.S. China and Japan represent "two big chunks of global energy consumption," said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. Despite a brighter outlook in the U.S., underscored by Friday's stronger-than-expected jobs report, "we're still seeing weakness out there in other key consuming regions of the globe." The jostling markets have put some specialized traders in a pinch. Former Goldman Sachs Group Inc. partner Don Textor saw his Dorset Energy Fund Ltd. crater nearly 16% in November, its third consecutive month of escalating losses, according to an investor update and person familiar with the firm. Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows. The fund is now down more than 20% for the year. The firm didn't respond to requests for comment. Some hedge funds have profited from oil's fall. Winners include the pair of George "Beau" Taylor and Trevor Woods. The duo's $1 billion Taylor Woods Capital Management LLC rose 6% last month, putting it up roughly 11% for the year, pressing bets that prices in the futures market would fall, a person familiar with the fund said. The Greenwich, Conn., firm's recent success helps erase paper losses from the first half of the year and will be a boon to Blackstone Group LP. The New York buyout shop staked the fund with startup cash in 2011 in return for a cut of fees earned going forward, people familiar with the arrangement said. Morgan Stanley analysts on Friday lowered their projections for Brent crude prices through 2018. The analysts now see benchmark Brent prices averaging $70 a barrel in 2015, down from their previous estimate of $98 a barrel. Big oil-producing countries both inside and outside OPEC are feeling the hit from falling prices in the form of faltering growth and tumbling currencies. Central banks in some countries, such as Russia, have intervened to stem the weakness. Mexico on Monday was the latest to unveil a policy of intervention, saying its central bank would sell dollars to support the peso on days the currency weakens 1.5% or more against the dollar. Some corners of the oil market are anticipating a rebound in prices. As a group, money managers increased their bullish position on Brent crude by 47% in the week that ended Dec. 2, according to exchange operator Intercontinental Exchange Inc. In the Nymex futures market, investors also upped their aggregate bullish bets, although on a smaller scale, according to the U.S. Commodity Futures Trading Commission. Some analysts said the increased bullishness suggests prices could hit a bottom soon. However, most of the week-on-week change came from money managers closing out bets on lower prices, rather than adding new bets that prices would rise. "It's not that they're guessing that prices have bottomed--it's that they're adjusting their exposure" to lock in profits as prices fall, said Tim Evans, an analyst at Citi Futures Perspective. Market participants are trying to determine whether non-OPEC producers will reduce production to shrink the global glut of oil. ConocoPhillips said Monday it planned to cut capital spending by 20% next year, citing deferred spending on unconventional drilling in North America. Other producers have reduced their capital-spending plans as well. However, the Houston company said it expects its oil output to increase in 2015. Despite disclosures by ConocoPhillips and other oil companies about scaled-back investment plans, the total number of rigs drilling for oil in the U.S. rose by three in the week ended Dec. 5, according to a weekly count from oil-services firm Baker Hughes Inc. The rig count "showed an uptick in U.S. drilling activity at a time when the market really wants to see some cutback in drilling," Mr. Evans said. "You're looking at a substantial first-half 2015 surplus that nobody's done a thing to trim." U.S. oil supplies are expected to fall later this month as refiners draw down inventories for year-end tax purposes, which could give a temporary boost to prices, said Tariq Zahir, managing member at Tyche Capital Advisors. That could be keeping some traders on the sidelines, he said. "With this level of volatility in the market, you don't really want to risk too much on your gains for the year," Mr. Zahir said. January reformulated gasoline blendstock, or RBOB, settled down 6.68 cents, or 3.8%, at $1.7066 a gallon, the lowest level since Sept. 29, 2009. January diesel slid 5.29 cents, or 2.5%, to $2.0549 a gallon, the lowest settlement since Sept. 1, 2010. Anthony Harrup, Sarah Kent and Summer Said contributed to this article Write to Nicole Friedman at and Rob Copeland at Credit: By Nicole Friedman And Rob Copeland
Subject: Petroleum industry; Price cuts; Statistical data; Energy industry
Location: Iraq
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1633993924
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1633993924?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ConocoPhillips Cuts Drilling Budget by 20%; Move Comes as Oil Companies Scale Back Plans Amid Lower Crude Prices
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
In the near term, however, less spending by oil producers spells gloom for oil-field service companies and contractors including Schlumberger Ltd. and Transocean Ltd., whose revenues depend on drilling activity.
Full text: ConocoPhillips said it would cut capital spending by 20% next year to $13.5 billion, a sign that major oil companies are treating the as more than a temporary dip. U.S. oil prices on Monday, falling below $64 a barrel in midday trading, and they are down nearly 40% since this year's peak in June. The steep drop in prices has come as energy companies prepare their annual budgets, and analysts expect much of the industry to scale back spending as cash flow shrinks. Houston-based ConocoPhillips is the first of the big, U.S.-based international oil producers to disclose its 2015 spending plans. The company said it would cut back on exploring for new sources of oil and gas, as well as on drilling in some shale formations in North America, including the Niobrara in Colorado. Ryan Lance, chief executive of ConocoPhillips, said the lower spending "is prudent given the current environment." The company also will spend less on some of its largest projects that are nearing completion, and estimates it will pump 3% more oil and gas in 2015 than in 2014. Even if its oil and gas output grows more slowly than in the past, Conoco "is committed to live within its means," said Roger Read, a Wells Fargo Securities analyst. Shares of ConocoPhillips, the third-largest U.S. oil producer by revenue, fell more than 3% on Monday as falling crude prices continued to drive shares of oil producers lower. The collapse in oil prices to the lowest levels in five years leaves oil and gas producers with less money to spend on drilling, dividends and in some cases programs to repurchase their shares. Analysts at Sanford C. Bernstein on Monday estimated that a 35% drop in oil prices would result in a 25% decrease in industry cash flow. But they forecast that crude prices would eventually rise as companies cut back on drilling. In the near term, however, less spending by oil producers spells gloom for oil-field service companies and contractors including Schlumberger Ltd. and Transocean Ltd., whose revenues depend on drilling activity. Halliburton Co. and Baker Hughes Inc. last month , forming the second-largest oil-field services firm after Schlumberger. Schlumberger, which operates onshore and offshore in 85 countries around the world, said last week that it would be reducing its workforce and retiring some of its seafaring vessels. "We do expect lower exploration activity levels to carry forward into 2015," Patrick Schorn, Schlumberger's president of operations and integration, said at a Cowen and Co. energy conference. He cited "a very strong focus from our customers on short-term cost cutting." It isn't just capital spending that is likely to get trimmed. Analysts who met with Chevron Corp. management last week predicted that the company would spend less on repurchasing its shares. Chevron executives also have expressed a willingness to delay investments in major projects as the company seeks to lower costs. "Chevron is still in the process of reviewing and evaluating its capital and exploratory expenditure plans and will release its 2015 budget as soon as these plans are final, most likely in early 2015," Chevron spokesman Kurt Glaubitz said. Dan Molinski contributed to this article. Write to Daniel Gilbert at Credit: By Daniel Gilbert
Subject: Petroleum industry; Cash flow; Executives; Capital expenditures; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990; Name: Transocean Ltd; NAICS: 213111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634172321
Document URL: htt ps://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634172321?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Trafigura Expects Rise in U.S. Oil Trading in 2015; Commodities Trader Says Traded Volumes Could Double Next Year
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Trafigura believes its business model, combining investment in infrastructure with trading expertise, has allowed it to weather difficult conditions for trading houses which have faced stagnant markets, increased competition and calls for greater transparency around its business models.
Full text: LONDON--Trafigura Beheer B.V. expects to significantly increase its oil trading in the U.S. next year, despite the recent that has put the profitability of many oil projects in the country in doubt. The privately-owned commodities trader said Monday that its volume of trades from two substantial shale oil formations in Texas could double next year, building on similar growth in 2014. Trafigura, which typically turns a profit by buying commodities like oil from producers and selling it on to consumers wherever it can get the highest price, generated 12% of its revenue from oil and oil products trading in North America last year, up from 10% a year earlier. Trafigura disclosed its U.S. expansion expectations as it reported net profit of $1.1 billion for the year ended Sept. 30, 2014, down 50% compared with a year earlier. The profit plunge was mainly due to the divestment of oil storage firm Puma Energy, which Trafigura spun off after selling a large stake in the company last year. Trafigura has grown rapidly in the U.S. where oil production, has boomed in recent years. In 2012, it bought an 85-acre oil terminal at Corpus Christi, Texas, but sold down 80% of its stake earlier this year; retaining the commercial rights to use the infrastructure for trading. It has also completed the conversion of a 100,000 barrel a day natural gas pipeline in Texas that will allow it to transport crude oil and condensate. Despite the dip in headline figures, Trafigura said its gross profit margin had improved to 1.6% from 1.4%, while its traded volumes rose to 169.5 million metric tons from 150.7 million metric tons in 2013. Stripping out divestments of previously consolidated subsidiaries, including Puma Energy, the company's earnings before interest, tax, depreciation and amortization rose 13% in 2014 to $1.3 billion. "This was a creditable performance in challenging trading conditions," Chief Executive Jeremy Weir said in a statement. Trafigura believes its business model, combining investment in infrastructure with trading expertise, has allowed it to weather difficult conditions for trading houses which have faced stagnant markets, increased competition and calls for greater transparency around its business models. The company said it had also carried out a substantial share buyback program, handing back almost $900 million to management and senior employees in the past year. The trading house, which is owned by 600 employees and its management, regularly engages in significant share repurchase programs as a way of redistributing profits. It plans to purchase stock worth $1.3 billion from its staff between 2015 and 2018, subject to compliance with financial covenants on its debt. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Petroleum industry; Corporate profits; Corporate planning; Petroleum production
Location: United States--US Texas North America
Company / organization: Name: Puma Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634191342
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634191342?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Investors Bet on Recovery in Oil Prices; Positions Taken on Expectations of Rising Brent Crude Prices Increase by 47% in Past Week
Author: Rai, Neena
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% over the past week, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall.
Full text: LONDON--As oil prices continue to plunge, investors are already busy laying bets over a broader recovery in prices. Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% over the past week, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall. It is the highest net long position in four months, according to the data. Investors increased the number of long positions--or bets that prices will rise--held by 11,391 positions to 212,075 as of Dec. 2, according to the latest Commitment of Traders report from the ICE. They cut the number of short positions--bets that the crude oil price would fall--by 19,912 to 114,799, it said. Jack Malone, futures and options adviser at Chicago-based RCM Asset Management, said that oil prices may yet fall in the near-term, as investors fret about the huge volumes of oil sloshing around in global markets. "Near term, I do believe that oil prices have lower to go because of the oversupply situation, yet the rising bets in Brent could reflect good opportunities in longer-term positions," said Mr. Malone, who declined to discuss RCM's investments in oil. RCM Asset Management has $80 million under management. Oil prices slumped after the Organization of the Petroleum Exporting Countries opted on Nov. 27 to despite the near 30% decline in prices since June and the ample supplies available in global markets. That sent the oil market into a frenzied bout of selling, and prices declined an additional 10 percentage points. Brent crude oil for January fell further on Monday. In early-afternoon trading in London the price was down 2.4% at $67.43 a barrel--a . Data published last Friday confirmed the increase in long positions. Investors in the Nymex market boosted their wagers that prices for WTI crude oil, the U.S. benchmark, could go up. Money managers added 9,807 wagers on rising prices while slashing 12,557 bets that prices would fall, according to data from the Commodity Futures Trading Commission published on Friday. Tariq Zahir, managing member of New York-based Tyche Capital Advisors, cautioned against reading too much good news into the data. The market may already have swung back sharply given the collapse of prices since the Nov. 27 decision, said Mr. Zahir. Tyche's positions are skewed toward prices falling further, he said, adding that he believes the net long positions could have reversed just as quickly in the week since Dec. 2. "Let's not forget this data is backward looking," said Mr. Zahir. "In a normal market, this could signal a potential recovery in Brent, but by now I wouldn't be surprised if these positions have already been taken off by investors." ICE's Commitment of Traders report is published every Monday with data from the previous Tuesday. Morgan Stanley on Monday lowered its forecasts for crude oil prices for the next five years, reiterating some concerns that the supplies are likely to keep prices down for some time. For its base-case scenario, the U.S. bank sees oil averaging $70 a barrel during 2015, down nearly $28 from its previous forecast. In a worst-case scenario, prices next year could be down 38% on average. The bank sees prices gradually recovering to an average of $100 a barrel in 2017, but this is only $4 below the previous forecast. Still, Morgan Stanley's Adam Longson said he doesn't see stress levels matching those of prior oil crises. "Estimates of the oversupply are vastly overstated versus true crude balances," said Mr. Longson in a research note. Write to Neena Rai at Credit: By Neena Rai
Subject: Crude oil; Crude oil prices; Petroleum industry; Asset management
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634192636
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634192636?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
In a Year of Setbacks for Obama, Low Oil Prices Bring Hope; White House to Reap Economic Benefit at Home, Strategic Advantage in Many Geopolitical Hotspots
Author: Seib, Gerald F
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
The macroeconomic benefits will be offset somewhat by lower activity in the oil-drilling sector, which has been booming, but many analysts score the price drop as a net plus for the U.S. The international effects are even more tantalizing for the Obama White House. Bonus for the White House: Maybe the additional economic squeeze will convince Congress it doesn't need to impose new economic sanctions on Iran, which the Obama administration fears would blow up those nuclear negotiations with Iran.
Full text: Even President Barack Obama likely would agree that 2014 has been a tough year for him--and he doubtless would welcome a sign that he will catch a break or two in 2015. Well, here's one: Low oil prices now appear likely to be with us deep into next year, at least, and they are shaping up as a win-win for the president. It's hard to imagine a single development that carries so many upsides and so few downsides. The domestic economic benefits are obvious; more intriguing but less obvious are the ways low oil prices benefit American strategy around the world. It just happens that the countries hurt most by the oil-price decline are on the current U.S. naughty list, from Iran and Syria to Russia and Venezuela. Meanwhile, many obvious economic and strategic beneficiaries--Jordan, Egypt, Israel and Japan among them--are on the nice list. It is a geopolitical game-changer. The effects are truly meaningful only if the current oil-price dip is sustained for a while, but most observers think it will be. Global supply outstrips demand by perhaps a million barrels a day right now, and the world's most powerful oil producer, Saudi Arabia, has indicated it doesn't intend to cut production to soak up the excess. That has pushed oil prices to $65 a barrel or so, down from more than $100 just five months ago. "We see the current oil glut as long term, with $100-plus prices not being reattained until the end of the decade," wrote Doug Handler, chief U.S. economist for IHS, in an analysis late last week. That implies gas prices "well below" $2.50 a gallon by early next year, a move that will save the average American household $750 over the next year, he added. That should translate into a boost to consumer confidence and spending, in an economy already showing new signs of progress. The macroeconomic benefits will be offset somewhat by lower activity in the oil-drilling sector, which has been booming, but many analysts score the price drop as a net plus for the U.S. The international effects are even more tantalizing for the Obama White House. For starters, low oil prices can help stimulate growth in Europe just as its sluggishness has emerged as a deep worry. The drop also wounds Russia and Iran, deeply and inescapably dependent on oil income. Both already are under economic pressure from American-orchestrated international sanctions, Russia because of its incursion into Ukraine and Iran because of its nuclear program. Lower oil prices have the effect of putting those sanctions' effects on steroids. The combined effect on Russia will be "very profound," says one senior U.S. official, "and we've already seen them downgrade projections for growth, and they may be heading into a recession." Russian President Vladimir Putin is in a box; he faces significant costs to consolidate his takeaway of the Crimean Peninsula from Ukraine, is paying most of the costs incurred by Ukrainian separatist forces and is promising a defense buildup to boot. "There are going to have to be trade-offs," the U.S. official predicts. Iran's predicament is similar and, from the American point of view, particularly well timed. The Obama administration has perhaps three months to pressure Iran into a long-term deal restricting its nuclear program. Only economic pressure has brought such a deal into view, and the pinch on Iranian oil revenues now will escalate the pressure at precisely the right time. Bonus for the White House: Maybe the additional economic squeeze will convince Congress it doesn't need to impose new economic sanctions on Iran, which the Obama administration fears would blow up those nuclear negotiations with Iran. Iran's allies in the Middle East are hurt as well. Syria is dependent on both its own modest oil income and Iranian largess. Iranian petrodollars also finance Hezbollah. Both have some new worrying to do. Similarly, the radical Islamic State's army has been financing itself in part by stealing oil from Syrian refineries and selling it on the black market. The value of such oil, already deeply discounted, is sinking further. Meantime, the nations the U.S. would like to see stabilized in the Middle East--Egypt, Jordan and Lebanon--all get some relief. The only downside, which is worrisome, is the effect on Iraq's oil income. In this hemisphere, nobody is hurt more than oil-producing Venezuela, the regional epicenter of anti-American agitation. Also pinched are Venezuelan beneficiaries, principally Cuba. "The Venezuelans," says the senior U.S. official, "are in deep trouble." As it happens, much of this is attributable to the Saudis' decision not to cut their output. The Saudis are acting for their own reasons, but it's nice that President Obama and Saudi leaders, who have had their tensions lately, agree on the global benefits on this one. Write to Gerald F. Seib at Credit: By Gerald F. Seib
Subject: Petroleum industry; Sanctions; Prices; Recessions; Presidents
Location: Jordan United States--US Egypt Russia Iran Syria Venezuela
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: Un ited States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634213885
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP's Cuts Show Big Oil Needs to Lose Heft; Other Major Companies Are Likely to Slim Down Operations
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
With nearly 40% since June, oil and gas companies face a tougher time covering their investment spending and payments to shareholders with operating cash flow.
Full text: A little excess weight can help through lean times. But slimming down is what is needed for the biggest oil and gas companies trying to weather the storm of lower oil prices. With nearly 40% since June, oil and gas companies face a tougher time covering their investment spending and payments to shareholders with operating cash flow. Some is likely. But Big Oil also will need to next year. BP is set to cut jobs as part of its latest restructuring efforts. Others are likely to follow suit. Companies such as BP, Royal Dutch Shell and Total have in the past year embraced a mantra of spending discipline and return on investment rather than chasing growth at any price. But they can arguably do more in trimming their operating costs: These add up to $180 billion a year for the European majors, nearly 20% higher than their investment spending, according to Barclays. The ranks employed in the upstream operations of oil and gas companies have continued to rise in recent years, even as production has flatlined or started to fall. At BP, which had to overhaul its operations following the Macondo oil spill in 2010, the number of upstream employees rose 17% from 2010 to 2013. Production, excluding associates, has dropped by a fifth. So BP's production per upstream employee, one measure of efficiency, was nearly a third lower in 2013 than three years previously. It is a similar story elsewhere. Upstream head count at France's Total crept up 6% over the same period, but falling output, when excluding its stake in Russia's Novatek, meant production per head dropped 17%. At Shell, which last year reported higher staff numbers after an accounting change, production per member of upstream staff has also fallen, down close to a fifth. On the face of it, there may be more chopping to be done in Europe than in the U.S. The U.S. companies don't break out their upstream employee numbers. But Exxon Mobil's total head count, excluding service station staff, has fallen from 83,600 in 2011 to 75,000 last year. France's Total employed close to 100,000 people last year, though it produced roughly half the oil and gas that Exxon did. U.S. companies may have done a better job of cutting costs as they have streamlined operations. But Europe's major oil companies certainly face greater political pushback when trying to restructure operations and shed staff. They also tend to have large, labor-intensive downstream refining and marketing businesses, which have made losses in recent years. Exxon and Chevron enjoy a premium valuation compared with the European sector, in part thanks to their better profitability and efficiency. Europe's oil and gas sector will need to get leaner to stay fit in 2015. Write to Helen Thomas at Credit: By Helen Thomas
Subject: Petroleum industry; Natural gas utilities; Statistical data
Location: France United States--US Europe
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634214435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634214435?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Saudi King Announces Cabinet Reshuffle; Veteran Oil Minister Ali al-Naimi Keeps Post in Place
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract: None available.
Full text: Saudi Arabia's King Abdullah Monday announced a shake-up of the kingdom's government ministers, but kept veteran Oil Minister Ali al-Naimi in his role. Mr. al-Naimi, who has been the kingdom's oil minister since August 1995, was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries to keep its oil-production target steady, a move that has since sent global oil prices into a tailspin. The king named new heads for the ministries of higher education, Islamic affairs, health, culture and information, telecommunications, transportation, agriculture and social affairs, according to a royal decree posted by the official Saudi Press Agency. Write to Summer Said at Credit: By Summer Said
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634265193
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634265193?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq Cuts Oil Price for Asian, American Buyers; Market Watches Pricing Moves by Major Producers in Recent Months for Any Signs of OPEC Price War
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
The oil market has closely by major crude producers in recent months after several successive price cuts led to speculation that members of the Organization of the Petroleum Exporting Countries were engaging in a price war.
Full text: LONDON--Iraq cut the January price of its flagship Basrah Light oil for Asian and American buyers on Monday, but raised it for European customers, in line with similar earlier in December. Iraq's State Oil Marketing Company slashed prices for Asian buyers by $1.50 to a discount of $4.00 a barrel to the Oman/Dubai benchmark. It also slightly reduced the price buyers in North and South America will pay by 30 cents to a discount of 40 cents to the ASCI benchmark. However, for European buyers it increased the cost of its flagship crude by 10 cents to a discount of $4.35 to the Brent benchmark. The oil market has closely by major crude producers in recent months after several successive price cuts led to speculation that members of the Organization of the Petroleum Exporting Countries were engaging in a price war. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Price increases; Price cuts
Location: Dubai United Arab Emirates Iraq
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634265238
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634265238?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Drop Pressures Crude-Producing Countries, Energy Firms; Oil Prices Extend Losses, Hitting Five-Year Lows
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Dec 2014: n/a.
Abstract:
Declines in spending by oil firms will likely further pressure companies that provide oil-field services--such as Schlumberger, Halliburton Co. and Baker Hughes Inc. --which tend to suffer when oil companies reduce spending. Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% as of Dec. 2, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall.
Full text: Oil prices dropped sharply Monday , putting additional pressure on countries that rely on oil revenue and on energy companies that are trying to calibrate their investment plans. In recent trading, U.S. oil prices were 3.8% lower at $63.29 a barrel, the lowest level in intraday trading since July 2009. Monday's skid brought year-to-date declines to roughly 35%. Brent crude, the global benchmark, fell 4.2% to $61.11 a barrel. Oil prices have plunged for months as global supply growth has outpaced expectations while demand has been tepid. On Monday, oil prices declined steadily during the Asian and European sessions, but the selloff accelerated as the U.S. trading day got under way. U.S. oil futures, which trade on the New York Mercantile Exchange, fell 2.6% in the first hours of trading, reaching an intraday low of $63.06 a barrel. Already, companies have been forced to make changes. ConocoPhillips on Monday from a year ago to $13.5 billion next year. The Houston-based oil giant said it plans to spend less on major projects that are nearly complete as well as defer spending on emerging shale plays in North America. Norway's Statoil ASA said on Friday that it would suspend the operations of three oil-drilling rigs for longer than previously planned because of overcapacity. Meanwhile, Schlumberger expects to post a pretax write-down of $800 million for the fourth quarter, related to the oil-services giant's plan to reduce the size of its WesternGeco marine seismic fleet. Continental Resources Inc., a major oil producer in North Dakota's Bakken Shale, said last month it would spend $4.6 billion in 2015, $600 million less than planned, due to lower oil prices. Iain Pyle, an analyst with Bernstein Research, said oil companies will have to re-examine some of their big investments. If oil prices don't rebound soon, "what we're going to see is projects getting canceled," he said. While companies in the oil industry warn of major changes to their production and expenditure plans, those leading many of the world's top economies have said the drop could be a shot in the arm for their economic forecasts. The positive spin from top policy makers in the U.S., Europe, Japan and elsewhere comes even as history has shown that sharp drops in oil prices tend to be associated with recessions as energy demand collapses. Oil producing-countries are already hurting, especially those that rely heavily on petroleum revenue, like Iraq, Algeria and Nigeria. It is also a difficult development for countries such as Russia, Venezuela and Iran, which are already facing deep economic problems. Driving Monday's move, data showed that , more than previously estimated, while Chinese export growth fell below expectations and imports fell. China and Japan are the No. 2 and 3 oil-consuming nations after the U.S. China's crude-oil imports rose 5.5% in November from October and were up 7.9% year-over-year, according to Wall Street Journal calculations based on preliminary data released from the General Administration of Customs on Monday. Declines in spending by oil firms will likely further pressure companies that provide oil-field services--such as Schlumberger, Halliburton Co. and Baker Hughes Inc. --which tend to suffer when oil companies reduce spending. All three companies traded down more than 1% in recent trading, while Exxon Mobil Corp. and Chevron Corp. traded down 1.9% and 3.3%, respectively. In its Monday statement, Conoco said it now expects production will increase about 3% at its continuing operations, excluding those in Libya. Last month, the oil exploration and production company had said that next year's budget would fall below the $16 billion spent this year, dropping plans for some new wells in places such as Colorado's Niobrara Shale. Further hurting oil companies, the ICE Dollar Index, which measures the dollar against a basket of currencies, rose to a multiyear high early Monday. Oil is traded in dollars, so a stronger dollar makes oil more expensive for buyers using foreign currencies. Even so, some investors are betting on a bounce back. Net long positions taken by large investors that the price of Brent crude oil would rise increased by 47% as of Dec. 2, according to the Intercontinental Exchange Inc. Net long positions are calculated by the total number of bets that the price of oil would rise minus the number of bets that it would fall. That bounce back would come despite little help on the way from the 12-member Organization of the Petroleum Exporting Countries, which collectively pump more than one-third of the world's oil. On Nov. 27, the group opted to maintain production levels despite the recent selloff. The decision sent the oil market into its latest bout of selling, with prices off more than 10% since the move. Morgan Stanley expects prices to remain down for some time. On Monday, the firm lowered its forecasts for crude oil prices for the next five years. For its base-case scenario, the U.S. bank sees oil averaging $70 a barrel during 2015, down nearly $28 from its previous forecast. In a worst-case scenario, prices next year could be down 38% on average. Ian Talley, Justin Scheck and Neena Rai contributed to this article. Credit: By Nicole Friedman
Subject: Petroleum industry; Prices; American dollar; Recessions; Economic forecasts
Location: United States--US
Company / organization: Name: Statoil ASA; NAICS: 324110, 211111; Name: Continental Resources Inc; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 8, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634294407
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634294407?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Crude Oil's Fall Pressures Energy Megaprojects; Oil Industry's Multibillion-Dollar Investments Come Under New Scrutiny
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Included in next year's total is $4.8 billion, or 36% of its capital budget, to start up marquee oil and gas projects in the North Sea, in Australia and Canada's oil sands. For a generation, companies including ConocoPhillips, Exxon Mobil Corp., Royal Dutch Shell PLC and Chevron Corp. focused investment and manpower on projects that took them to places including the deep waters of the U.S. Gulf of Mexico, Canada's Alberta oil sands and the Caspian Sea.
Full text: Energy development projects that looked great earlier this year are looking less so now. Tumbling oil prices hit a fresh five-year low on Monday, pressuring some of the world's biggest energy companies to reconsider multibillion-dollar expenditures. The biggest worries: megaprojects requiring billions of dollars in investment and sophisticated engineering to tap resources capable of decadeslong oil or natural gas production. ConocoPhillips said its capital spending would fall to $13.5 billion next year, down 20% from this year's level. Included in next year's total is $4.8 billion, or 36% of its capital budget, to start up marquee oil and gas projects in the North Sea, in Australia and Canada's oil sands. Ryan Lance, ConocoPhillips's chief executive, said the spending reduction "is prudent given the current environment." The Houston-based company will spend less on some large projects that are nearing completion, and cut back on exploring for new sources of oil and gas. It estimates it will pump 3% more oil and gas in 2015 than this year. For a generation, companies including ConocoPhillips, Exxon Mobil Corp., Royal Dutch Shell PLC and Chevron Corp. focused investment and manpower on projects that took them to places including the deep waters of the U.S. Gulf of Mexico, Canada's Alberta oil sands and the Caspian Sea. Such huge projects typically play to the advantages of big companies. They have the engineering expertise to develop fields beyond the grasp of smaller firms and government-owned oil companies. What's more, they need to keep adding reserves to offset production declines in mature areas. Big, long-lived fields in an era of $100-a-barrel Brent, the price that benchmark oil has fetched for much of the past few years, were a good formula for earnings gains. Monday's price of $66.19 a barrel for deliveries next month isn't part of that equation. For Shell to consider pursuing a new project, it "must be able to break even at $70" a barrel, a spokesman said. A BP PLC spokesman said it uses "a long-term planning price of around $80" a barrel when considering new investments. Exxon Mobil Chief Executive Rex Tillerson recently said in a television interview that the company tests projects "across a range that's all the way down to $40" when considering projects. A Chevron spokesman said the company has based its "2017 production forecast on a Brent price of $110" and that it conducts a "stress test" of projects at lower price levels. Shares of Conoco, the third-largest U.S. oil producer by revenue, fell 4.2% to $65.03 at 4 p.m. in New York trading. Exxon was off 2.3% at $91.70, Shell was off 2.3% at $65.60, and Chevron fell 3.7% to $106.80. Oil's price drop is made more painful because of the locked-in costs of many of these projects. In the past few years, contractors such as drill-rig owners upped their rates as big companies competed for services. Some companies, including Shell, borrowed money in some recent quarters to cover combined payments for development, acquisitions and shareholder dividends, since the companies' cash flow didn't cover all of the spending. A Shell spokeswoman pointed out that the company's cash flow in its most recent quarter was up from a year earlier. Shell CEO Ben van Beurden said early this year that its big expensive projects made it too "convoluted" for the company to give public forecasts of production or cash flow. He and other executives said their companies needed to curb spending. Even before oil prices began falling earlier this year, companies have been delaying or canceling projects for cost worries. Chevron and BP are reviewing plans for offshore projects in the U.K. and U.S. that could cost billions of dollars. Shell decided not to pursue a U.S. plant to turn natural gas to liquid fuel, and in July said it wouldn't continue with a gas project in Saudi Arabia. A U.S. shale boom fueled by small companies drilling huge numbers of small wells is responsible for much of the price pressure on big companies. But that doesn't mean an end to mega projects. Big companies still need them to maintain production levels. John England, a vice chairman at consultants Deloitte LLP who advises oil companies on development strategy, said that he expects the biggest companies to follow through with many of their projects. "They'll certainly cut back at the margins," he said. But, he added, "energy demand continues to go up and at the same time we do have decline curves on existing production." Spokesmen for Shell and BP said the companies take long-term views when deciding whether to invest in a project and take into account oil-price volatility. Chevron's finance chief has said the No. 2 U.S. oil producer believes "global demand for oil and natural gas will grow while existing sources of supply will inevitably decline." Still, analysts such as Bernstein Research's Iain Pyle said oil companies will have to re-examine some of their big investments. If oil prices don't rebound soon, "what we're going to see is projects getting canceled," he said. Bernstein on Monday estimated that a 35% drop in oil prices would result in a 25% decrease in industry cash flow. But it forecast that crude prices would eventually rise as companies cut back on drilling. A barrel of Brent traded for more than $115 on June 19. Daniel Gilbert contributed to this article. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry; Cash flow; Investments; Capital expenditures; Natural gas; Oil sands
Location: United States--US Canada
People: Tillerson, Rex W
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634344329
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634344329?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Oil Falls, a Look at the Risks; Less Incentive to Develop Energy Sources; Fewer Alternatives When Demand Revives
Author: Browning, E S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
If spending doesn't pick up much, the main benefit of lower oil prices to economic growth won't be felt, and fears of global deflation will spread. Low-end retailers such as Costco Wholesale Corp. and Wal-Mart Stores Inc. have reported some sales improvement in recent weeks, as have some restaurants, said Henry Herrmann, chief executive at Waddell & Reed Financial Inc., which oversees $130 billion in Overland Park, Kan.
Full text: The oil-price decline of the past six months has been stunning. On Monday, oil prices fell 4.2%, to settle at $63.05 a barrel in New York. Crude has fallen 41% from its 2014 high hit in June and is at its lowest level since July 2009, just after the end of the financial crisis. Falling oil prices are thought to be good for stocks because they stimulate consumer spending and hold down inflation. The lower costs support economic growth, boost corporate earnings and lessen pressure on the Federal Reserve to raise interest rates. The stock market loves that mix. But falling prices aren't an unalloyed benefit. They also reduce the incentive to develop new oil and gas fields and make it less urgent to create alternative energy sources. That hurts companies in those areas and, because it makes energy less plentiful, means higher costs and fewer energy alternatives once global demand revives. "On balance, I think it is an overwhelming positive. It is a tremendous transfer of wealth from producers to consumers," said David Joy, chief market strategist at Ameriprise Financial Inc., which oversees $810 billion. But "there is clearly a debate about this." So far, he points out, reports on year-end consumer spending haven't been strong. If spending doesn't pick up much, the main benefit of lower oil prices to economic growth won't be felt, and fears of global deflation will spread. Low-end retailers such as Costco Wholesale Corp. and Wal-Mart Stores Inc. have reported some sales improvement in recent weeks, as have some restaurants, said Henry Herrmann, chief executive at Waddell & Reed Financial Inc., which oversees $130 billion in Overland Park, Kan. New-car sales also have been strong, he said. Friday's November jobs report showed a small pickup in wages, which also should help consumers. Surveys show, however, that many consumers still feel as if the U.S. is in a recession, Mr. Joy said. Many have had little or no inflation-adjusted wage gains for years and still face significant debt, which has kept them from going back to their old spending ways. "The general mind-set of the consumer is still very cautious. You don't see a robust start to the holiday shopping season, and the housing sector is only modestly improving," he said. Consumers may be trying to pay down debt, which would be good for their longer-term finances but wouldn't help economic growth right away. Fears also spread last week of a debt default by Venezuela, an oil exporter, and of further financial strains for Russia. Russia's 1998 debt default threw the financial system into turmoil, although few analysts predict a repeat. Aside from oil-related companies, worries have focused on railroads, railcar manufacturers, leveraged bank loans and firms that supply big oil companies, Mr. Herrmann said. His firm has cut way back on holdings of junk bonds issued by energy-related companies, he said. One bit of good news is that cuts in oil exploration and energy development occur gradually, while the benefits of lower oil prices are felt immediately, said Russ Koesterich, chief investment strategist at BlackRock Inc., which manages $4.32 trillion. That means, however, that the pickup in exploration and development also will be gradual when it happens. That means the effects of the oil-price decline will be felt even after oil prices begin to rise again. Part of the problem is that the price drop has been sudden and heavy, so that energy-related companies have taken a big hit for which it was hard to prepare. This has been a particular blow to smaller oil-services and equipment companies. A Standard & Poor's index of large oil producers has dropped 21% from its June high, while one of equipment and services companies has fallen 31% since its high in early July. Some small companies have fallen more. Still, while consumer spending by some measures accounts for roughly two-thirds of economic growth, energy represents something closer to 10% or less, analysts said. Although tumbling oil stocks helped knock indexes down on Monday, the trouble in the oil patch has been largely a sideshow for the broad stock market. The Dow Jones Industrial Average and S&P 500 were both at records Friday, so even after the Monday decline, the Dow, at 17852.48, was less than 1% from a record. Even the beleaguered Russell 2000 small-stock index ended just 3.4% from its March record. Amid the general optimism, investors have begun to ask when they should start buying beaten-down energy companies. Some analysts think oil itself could be poised for a bounce, although with the global economy still soft, few think it will be lasting. Mr. Koesterich of BlackRock has begun talking about selectively buying the strongest of the large, integrated global oil companies, which have high dividend yields to reward investors even if the stock prices don't turn up immediately. But it is still too soon to think about the smaller, riskier equipment and services providers, he said. Write to E.S. Browning at Credit: By E.S. Browning
Subject: Petroleum industry; Stock exchanges; Prices; Alternative energy; Recessions; Junk bonds
Location: New York
Company / organization: Name: Waddell & Reed Financial Inc; NAICS: 523120, 523930; Name: Ameriprise Financial Inc; NAICS: 523930; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Costco Wholesale Corp; NAICS: 452910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634346244
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634346244?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
How the IMF's Christine Lagarde Sees the World's Economic Hot Spots; Falling Oil Prices Are a Net Positive, She Says, but Some Tough Choices Still Lie Ahead
Author: Baker, Gerard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Christine Lagarde, managing director of the International Monetary Fund, is optimistic about the global economy, thanks in part to plunging oil prices. [...]at the other end, you have cheaper energy, a euro that has clearly been depreciating, and, if you look at the banking sector, which has been sanitized, stress-tested by the European Central Bank and where remedies have been taken, you have three components that should be moving the euro area into positive territory.
Full text: Christine Lagarde, managing director of the International Monetary Fund, is optimistic about the global economy, thanks in part to plunging oil prices. But she concedes that tough decisions still lie ahead for many, particularly in Europe. She spoke to Gerard Baker, editor in chief of The Wall Street Journal, about both encouraging signs and trouble spots. Edited excerpts follow. Oil and Trouble MR. BAKER: We've seen roughly a 40% decline in oil prices since the summer, and declines in other prices as well. What stresses and strains is this producing, and what are the benefits for the global economy? MS. LAGARDE: What we do first is try to analyze whether it's a supply or demand effect. And in the present circumstances, it's predominantly supply. It's 80% supply, 20% demand. So that's pretty good news. If I was to address an audience in Saudi Arabia, Qatar or Kuwait, I would probably not look at it exactly the same way. But on a net basis, it is good news for the global economy. MR. BAKER: How fragile is Russia? What threat does its fragility pose to the global economy? MS. LAGARDE: I think it poses significant threats, but not just from an economic point of view. If you were to ask me what I'm concerned about at the moment, certainly the geopolitical threat created by the current [Russian] endeavors. The price of oil going down is adding to their fragility and their vulnerability, and they know it. It remains to be seen what the reaction will be. But it is certainly something that is an add-on to the ruble depreciation, to the sanctions actually affecting the Russian economy as well. MR. BAKER: Will IMF intervention be needed, looking at some of these energy net-exporting countries? MS. LAGARDE: I was in Kuwait about three weeks ago addressing the Gulf Country Councils, and I said to them, "If it continues the way it does, most of your economies will show fiscal deficit. You should be prepared for that and build the buffers that you will need." If you look at who is going to be most affected, we just mentioned Russia; you have to think about Iran, clearly; closer to home, Venezuela; and a few African countries will be affected. If the IMF was called upon to help not only Ukraine, as we do and have to at the moment, but many of those other countries, I would seriously need some help from [the U.S.]. MR. BAKER: It looks like Europe is in or very close to its third recession in five years. What's the outlook for Europe? What needs to be done? MS. LAGARDE: This is what I've called the risk of the new mediocre: a combination of low growth and low inflation, which is bad news for countries where debt-to-GDP ratios are close to 100%. MR. BAKER: Risk of deflation? MS. LAGARDE: Some countries are already into deflation. But for the moment, it's more sustained low inflation, which is equally bad. MR. BAKER: But it could get worse? And if it did? MS. LAGARDE: It might very well get worse because of the price of oil. And high unemployment, which is the other very bad phenomenon of this new mediocre. Now, you look at that, and that's bad news. But at the other end, you have cheaper energy, a euro that has clearly been depreciating, and, if you look at the banking sector, which has been sanitized, stress-tested by the European Central Bank and where remedies have been taken, you have three components that should be moving the euro area into positive territory. I'm not suggesting that this is a walk in the park. It is not. MR. BAKER: There's a strong view from some in Europe that there should be aggressive monetary stimulus. But that is strongly resisted by the Germans, who want structural reform. Where do you stand? MS. LAGARDE: Where they are at the moment, they need to use all available tools. That means growth- and job-friendly fiscal policies for those who can afford it; monetary policy that is innovative and quite aggressive; and it means, absolutely, structural reforms that they have been talking about and must get on with. MR. BAKER: But they never do, do they? MS. LAGARDE: Some of them do. A lot has been done in Spain. A lot has been done in Ireland. Now there are some big players... MR. BAKER: France. MS. LAGARDE: Yes. Significant structural reforms, particularly concerning the labor market and the job market, have to be implemented, not just talked about. MR. BAKER: The pope went to the European Parliament last week and said, "Europe is haggard and elderly." And it feels like that. MS. LAGARDE: He said, "It's a grandmother." MR. BAKER: Yes. Like a rather poor and sick grandmother. It is like that, isn't it? MS. LAGARDE: I will have a private meeting with him next week, so I'll ask him exactly what he meant. MR. BAKER: The euro is making it worse, isn't it? The creation of the euro was a terrible mistake. MS. LAGARDE: I think the mistake was to have assumed that by moving into a single currency everything else would follow, and the fiscal union would be a given, which has not happened. If you have a currency union without a fiscal union and banking union, it's like not having all cylinders to fire with. And that's, I hope, what they're going to be working on. Situations in Asia MR. BAKER: Will China pull off this balancing act of making pro-market reforms while maintaining enough growth to keep people fed and happy and in jobs and from rioting in the streets? MS. LAGARDE: Many of us have for many years in a way suspected China of not being able to deliver, and many have shorted China. The truth is it actually delivers. We look very carefully at the monetary policy and the structural reforms, and this is just happening. MR. BAKER: Is Japan going to get back on track? MS. LAGARDE: You have to give them the credit of trying something that was really hard, and is still very hard. Where clearly it's a bit short on the delivery is both on the structural reforms and fiscal commitment. Our sense is that once the election is over, and hopefully [Abe's] hand will be stronger, he comes back to the fiscal plan. For the moment, there is no slack in the Japanese economy. So when they do stimulus, when they put money into the construction business, for instance, there's nobody to build because the labor market is so tight. So they have to open up not only to women--and I hope they do because Japanese women are very talented--but also to immigration. MR. BAKER: Is the U.S. economy strong enough to stand on its own feet without that amazing amount of support from the central bank? MS. LAGARDE: If we include the effect of the oil-price reduction, our [growth] forecast for next year is 3.5%. That should be strong enough for the monetary policy to follow its course. MR. BAKER: Are we not just dependent continually on these repeated injections of monetary stimulus? MS. LAGARDE: It has been most helpful in the last two years, and without it, we would not be talking about growth in the U.S., or in England. Now it's a question of gradually phasing out. Credit: By Gerard Baker
Subject: Prices; Recessions; Deflation; Professional football; Global economy
Location: Russia Kuwait Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634365331
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634365331?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Selloff of Energy Stocks Follows Oil-Price Drop
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Dec 2014: C.4.
Abstract:
The J.P. Morgan Alerian MLP Index ETN, which tracks a basket of so-called master limited partnerships that mainly transport and store oil and gas, sank 5.2%.
Full text: Stocks retreated, pressured by steepening declines in oil prices and fresh signs of economic weakness in Europe and Japan. The Dow Jones Industrial Average posted its biggest one-day loss in six weeks, falling 106.31 points, or 0.6%, to 17852.48. The S&P 500 index dropped 15.06, or 0.7%, to 2060.31, while the Nasdaq Composite Index declined 40.06, or 0.8%, to 4740.69. The selling was heaviest in energy stocks, as oil prices fell to new five-year lows. Benchmark U.S. oil futures fell 4.2% to $63.05 a barrel. The S&P 500 energy stocks index declined 3.9%. "Oil broke down again today, and now most of the oil stocks are getting smashed," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. The pain has been especially pronounced for small-company energy stocks, many of which have taken on heavy debt loads to fuel their expansion. An exchange-traded fund that tracks small energy shares, the $24 million PowerShares S&P SmallCap Energy ETF, tumbled 7.6%. Energy infrastructure stocks also slid. The J.P. Morgan Alerian MLP Index ETN, which tracks a basket of so-called master limited partnerships that mainly transport and store oil and gas, sank 5.2%. Sellers of energy stocks included those who bought into earlier declines in anticipation of a floor and were now reversing course amid another tumble in oil prices, Mr. Chandrasoma said. "A lot of people were bottom-picking, thinking there's a good entry point in oil and oil-related names, and now they're throwing in the towel," he said. Chevron was the second-biggest decliner in the Dow, shedding $4.07, or 3.7%, to $106.80. Exxon Mobil dropped 2.12, or 2.3%, to 91.70. Other hard-hit energy shares included domestic producer Continental Resources, which fell 4.49, or 12%, to 33.74. Goodrich Petroleum slid 75 cents, or 20%, to 2.96. Chris Bertelsen, chief investment officer at Global Financial Private Capital, which manages about $4.5 billion, said he sold some shares of energy companies around October, when the recent selloff was picking up steam. He said he continues to hold shares of some energy infrastructure companies. "The selloff in oil stocks is clearly a reaction to the fact that there's going to be no letup . . . as far as supply is concerned," he said. Stocks began the session lower on the heels of declines in Europe, after data showed German industrial output rose less than expected in October and Japan's economy contracted 1.9% in the third quarter. The Stoxx Europe 600 Index closed 0.7% lower. Gold futures rose 0.4% to $1,194.70 an ounce. The yield on the 10-year Treasury note fell to 2.257%, from 2.306% on Friday. Overseas early Tuesday, Japan's Nikkei stock average was down 0.3%, Hong Kong's Hang Seng Index was down 0.9%, the Shanghai Composite Index was up 0.1%, Australia's S&P/ASX 200 was down 1.5% and South Korea's Kospi was down 0.3%. Credit: By Dan Strumpf
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 9, 2014
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634392995
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634392995?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asia, Iraq Are Latest Factors in Oil's Fall
Author: Friedman, Nicole; Copeland, Rob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Dec 2014: C.1.
Abstract:
A decision by the Organization of the Petroleum Exporting Countries last month to maintain its production ceiling further cemented a belief among investors, analysts, oil-company executives and industry officials that the world will remain awash in crude well into 2015. Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows.
Full text: Oil prices skidded to fresh five-year lows Monday, as lackluster readings on Asian economies and a price cut by Iraq heightened concerns about a global supply glut. A decision by the Organization of the Petroleum Exporting Countries last month to maintain its production ceiling further cemented a belief among investors, analysts, oil-company executives and industry officials that the world will remain awash in crude well into 2015. While oil's fall has hurt the finances of oil-exporting nations, it has been a boon for consumers and is likely to provide a tailwind for global growth. The drop in prices also has rattled currency markets, prompted some energy companies to reduce spending and hammered energy stocks. U.S. oil prices ended $2.79, or 4.2%, lower at $63.05 a barrel on the New York Mercantile Exchange, the lowest level since July 16, 2009. Nymex oil futures are down 36% this year. Brent crude, the global benchmark, fell $2.88, or 4.2%, to $66.19 a barrel, the lowest level since Sept. 29, 2009. Brent is down 40% in 2014. The decline extends a six-month selloff in crude driven by rising production in the U.S. and elsewhere. The tumble in oil began overnight but accelerated during the New York trading day. The average per-gallon price of regular gasoline in the U.S. is $2.67, the lowest since February 2010, according to AAA. The motor club predicted Monday that the national average could fall to $2.50 a gallon or lower by the end of the year. The sharp move in crude oil weighed on shares of energy companies, helping send major U.S. stock indexes lower. The Dow Jones Industrial Average lost 106.31 points to 17852.48. A benchmark U.S. oil price below $65 a barrel poses challenges for oil companies drilling in shale-rock formations, the source of the U.S. oil boom, some analysts say. Certain operations will be money-losing with oil below that mark, they say. "It's getting close to the marginal cost for shale production in North America," said Michael Hiley, an energy trader at brokerage LPS Partners Inc. "I think guys are very nervous." Iraq on Monday cut the January price of its flagship crude-oil blend for Asian and American buyers, but it raised it for European customers, in line with similar moves earlier this month by Saudi Arabia, the world's largest oil exporter. Market watchers say these price cuts indicate producers' desire to protect their market share during the downdraft, a stance that is likely to result in a steady flow of barrels. Saudi Arabia's King Abdullah announced a shake-up of the kingdom's government Monday but kept veteran oil minister Ali al-Naimi in place. Mr. Naimi was instrumental in OPEC's decision to maintain its production target. Producers and traders are scrambling to find buyers at a time of a slowdown in Asia, which previously had been hailed as the growth engine for the oil market and a justification for triple-digit prices. Data released Monday showed Japan's economy contracted 1.9% in the third quarter, more than previously estimated, while Chinese export growth fell below expectations and imports fell. China and Japan are the world's No. 2 and 3 oil-consuming nations after the U.S. China and Japan represent "two big chunks of global energy consumption," said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. Despite a brighter outlook in the U.S., underscored by Friday's stronger-than-expected jobs report, "we're still seeing weakness out there in other key consuming regions of the globe." The jostling markets have put some specialized traders in a pinch. Former Goldman Sachs Group Inc. partner Don Textor saw his Dorset Energy Fund Ltd. crater nearly 16% in November, its third consecutive month of escalating losses, according to an investor update and person familiar with the firm. Mr. Textor, whose Syosett, N.Y., firm manages roughly $700 million overall, had heavy bets on exploration-and-production companies such as Anadarko Petroleum Corp. and Pioneer Natural Resources Co., and he held bullish related positions amounting to more than four times the value of his bearish ones heading into the month, the document shows. The fund is now down more than 20% for the year. The firm didn't respond to requests for comment. Some hedge funds have profited from oil's fall. Winners include the pair of George "Beau" Taylor and Trevor Woods. The duo's $1 billion Taylor Woods Capital Management LLC rose 6% last month, putting it up roughly 11% for the year, pressing bets that prices in the futures market would fall, a person familiar with the fund said. The Greenwich, Conn., firm's recent success helps erase paper losses from the first half of the year. Morgan Stanley analysts on Friday lowered their projections for Brent crude prices through 2018. The analysts now see benchmark Brent prices averaging $70 a barrel in 2015, down from their previous estimate of $98 a barrel. Some corners of the oil market are anticipating a rebound in prices. As a group, money managers increased their bullish position on Brent crude by 47% in the week that ended Dec. 2, according to exchange operator Intercontinental Exchange Inc. --- Anthony Harrup, Sarah Kent and Summer Said contributed to this article
Credit: By Nicole Friedman and Rob Copeland
Subject: Commodity prices; Crude oil
Classification: 9180: International; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 9, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634393522
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634393522?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Plunge; Growth Fears in Asia, Uncertainty in Greece and Five-Year Oil Price Low Weigh on Shares
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract: None available.
Full text: European stock markets plunged deep into the red Tuesday, roiled by economic growth fears in Asia, political uncertainty in Greece and the tumbling price of oil still battering shares in energy companies. The Stoxx Europe 600 index ended the session 2.3% lower, having already closed the previous session down 0.7%, mirroring similar falls on country indexes in Germany, France and the U.K. , however, eclipsed all others, amid a flare-up in political uncertainty. Stocks in Athens dropped almost 13%, led by banks, while yields on the country's 10-year government bonds rose 0.74 percentage point to 7.89%, reflecting a fall in the price of the debt. On Monday, a government spokeswoman said that the parliament on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March. If the voting rounds fail to select a new president, parliament will be dissolved and national elections called, possibly on Feb. 1. The latest opinion polls suggest Greece's radical left opposition Syriza party would win national elections by a three to six percentage-point margin. Syriza threatens to tear up the reform and austerity program that has accompanied the bailout, likely precipitating a new crisis with Greece's creditors. The announcement came just hours after eurozone finance ministers decided to talks into early next year. Deutsche Bank analyst George Saravelos said that both events set markets up for "a very elevated period of event risk into year-end." But Greece wasn't the only reason for Tuesday's sharp selloff. In China, after Beijing took fresh steps to rein in growing risks in the country's debt-laden financial system. Compounding concerns, policy makers gathering in Beijing this week for a key summit are widely expected to lower China's economic growth target for next year after years of piling up debt to fuel fast expansion. Japan's Nikkei index snapped a seven-day winning streak on Tuesday, after figures on Monday 1.9% in the third quarter. In the U.S., the S&P 500 on Monday recorded its biggest one-day percentage drop since last October. On Tuesday the index was down 0.8% in late European trade. In commodity markets on Tuesday, the price of oil hit a fresh five-year low and even though to trade higher on the day above $66.70 a barrel, energy stocks and the currencies of commodity-dependent economies remained under pressure. The Stoxx Europe 600 subindex of oil and gas companies was down by around 1.8% at the close, taking its year-to-date decline to over 12%. ING credit strategist Nadège Tillier said that for the majority of OPEC members, a price of $65 a barrel already means they are selling oil below the cost of production. "In the long run, a price below $85 per barrel means financing difficulties for most oil and gas companies," she said. On Monday, U.S. oil giant ConocoPhillips had already said it by 20% next year to $13.5 billion, a sign that it is treating the plunge as more than a temporary dip. Jefferies economists meanwhile, published a note on Tuesday in which they lowered their average price forecast for Brent in 2015, 2016 and 2017 by 16% to $72, $83 and $90, respectively. They had already cut forecasts in October but said the latest fall is "more material" than expected. Brent crude has now fallen more than 40% since the start of the year, to a level last seen in August 2009. BNP Paribas economists said that Norway's central bank would "certainly" cut economic growth forecasts at its policy meeting on Thursday to reflect the slump in oil. In its last inflation report in September, Norges Bank said it expected growth of 2.25% in 2015 and 3.0% in 2016 but oil price futures at the time crude oil close to $100 per barrel over the bank's forecast period to 2017. In currency markets, Russia's ruble stumbled. The currency has against the U.S. dollar so far this year and was down an additional 0.9% on Tuesday. Nigeria's naira was around 2.1% lower against the buck, according to Thomson Reuters data, after the country's central bank on Monday sold an additional $200 million of reserves, in an effort to strengthen its ailing currency, according to a memo written by the central bank. One dollar currently buys more than 184 naira, almost 13% more than at the start of the year. Gold, which investors tend to buy during times of volatility was 2.8% higher Tuesday at $1,228.70 per troy ounce. Write to Josie Cox at Credit: By Josie Cox
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634409003
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
German Exports Fall but Still Robust; Unadjusted Figures Show Exports Hit a New Record, Buoyed by Weaker Oil Price and Euro
Author: Buell, Todd
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
FRANKFURT--German exports declined at the start of the fourth quarter in adjusted terms, but the sector remains robust, helped by a weaker euro and lower oil price.
Full text: FRANKFURT--German exports declined at the start of the fourth quarter in adjusted terms, but the sector remains robust, helped by a weaker euro and lower oil price. In seasonally adjusted terms, exports decreased by 0.5% on the month in October, data from the country's statistics office showed Tuesday. Imports, however, fell at a sharper pace, dropping 3.1%. This brought the seasonally adjusted trade surplus to [euro]20.6 billion ($25.3 billion), above economists' expectations of [euro]19.0 billion in a Dow Jones Newswires poll. Despite the monthly decline, analysts viewed the figures as a sign of a in Germany, given that in September exports rose 5.5% on the month. In unadjusted terms, German exports in October reached a new record of [euro]103.9 billion, surpassing the previous month's all-time high of [euro]102.5 billion. The data showed that in annual terms, exports to other eurozone countries increased by 1.9%, while exports to countries not in the eurozone, but in the European Union rose by 7.6%. Exports to countries outside the EU grew by 6.3%. Data from January to October showed that Germany's most significant export strength comes from Europe. On an annual basis, exports to the eurozone were up 2.5%, while EU exports outside the eurozone were up 9.8%. Non-EU exports were up only 1.7%. "Europe is by now the stability anchor of German exports again," said Berenberg economist Christian Schulz. Mr. Schulz also said that lower oil prices played a significant role in cutting Germany's import bill in October. Last week, Germany's Bundesbank, they could add an extra 0.1 to 0.2 percentage point to German economic growth in the next two years. The country's export strength may to some extent be attributable to the weaker euro. Thefrom September through October. A weaker currency generally helps exporters by making their products cheaper when priced in foreign currency. "German exporters are normally among the main European beneficiaries from a weaker currency," said ING economist Carsten Brzeski in a research note. He said that German exports have tended to be "relatively immune" to a strengthening currency, yet benefit from the currency weakening. "A Chinese buyer of a Mercedes will always buy a Mercedes, even if it gets more expensive. On the other side, if the Mercedes gets cheaper, more Chinese can afford it," he added. Josie Cox in London contributed to this article. -Write to Todd Buell at todd.buell@wsj.com Credit: By Todd Buell
Subject: Euro; Exports; Eurozone
Location: Germany Europe
Company / organization: Name: Dow Jones Newswires; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634409043
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World Bank Cuts Russia's Growth Forecasts Due to Declining Oil Prices; Russian Economy Seen Contracting 0.7% in 2015
Author: Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
"Investment is projected to contract for a third year in a row in 2015, because of continued uncertainty, restricted access to international financial markets by Russian companies and banks, and lower consumer demand," said Birgit Hansl, World Bank's lead economist for Russia.
Full text: MOSCOW--The World Bank on Tuesday cut Russia's economic outlook for the next two years to reflect, Moscow's main export. It is the second time the bank has cut Russia's economic outlook for 2015 in a week, and is its third cut since end September. Under its new baseline scenario, the World Bank forecasts the Russian economy will contract by 0.7% in 2015. The international financial institution said on Dec. 2 it expects Russia's gross domestic product to remain flat in 2015, which was lower than itsof 0.3% growth published Sept. 24. The bank also reduced its growth forecast for 2016 by a notch to 0.3% from 0.4% it expected in September. The bank's new baseline, or most likely scenario, assumes an average oil price of $78 per barrel for 2015 and of $80 per barrel for 2016. The foresees a slightly deeper contraction based on slightly higher prices next year. It said Dec. 2 it expects GDP to fall 0.8% next year amid average oil prices of $80 per barrel. "Investment is projected to contract for a third year in a row in 2015, because of continued uncertainty, restricted access to international financial markets by Russian companies and banks, and lower consumer demand," said Birgit Hansl, World Bank's lead economist for Russia. Lower oil and commodity prices are expected to negatively affect investment decisions for the companies in the resource sector, she said. The bank foresees consumption, the main driver of Russia's economy in the past several years, to decline for the first time since 2009, following negligible expansion in 2014. Things are expected to improve only marginally in 2016, as investment activity is projected to remain below its 2014 level, " constrained by lingering structural problems and persistent negative business sentiments resulting from geopolitical tension and economic policy uncertainty," the bank said. Under the bank's pessimistic scenario, oil prices will average $70 per barrel in 2015 and $72 per barrel in 2016 resulting in a 1.5% contraction next year and 0.3% growth in 2016. The optimistic scenario envisages a $85 average oil price per barrel in 2015 and $90 per barrel in the following year, resulting in flat economic growth in 2015 and a 0.5% expansion in 2016. Write to Alexander Kolyandr at Credit: By Alexander Kolyandr
Subject: Energy economics; Crude oil prices; Economic growth; Gross Domestic Product--GDP
Location: Russia
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634425863
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Futures Arrest Slide, Notching Gain for Day; Prices Remain Down About 40% From Highs Earlier This Year
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
In its own survey of domestic oil inventories released late Tuesday, the industry trade group American Petroleum Institute said stockpiles rose 4.4 million barrels in the week ended Dec. 5, gasoline stocks rose 6.7 million barrels, distillate stocks rose 4.3 million barrels and refinery operations increased 1.6 percentage points to 94.6% of capacity, according to a research note from Citigroup.
Full text: Oil prices arrested their free fall Tuesday, notching a small gain in a move analysts attributed to profit-taking by traders with bearish bets against the market. Brent crude for January delivery, the global benchmark, snapped a five-session losing streak to end up 65 cents, or 1%, at $66.84 a barrel on the ICE Futures Europe exchange. The front-month U.S. contract ended higher for the first time in four days, rising 77 cents, or 1.2%, to $63.82 a barrel on the New York Mercantile Exchange. Both futures contracts remain down about 40% from their highs earlier this year as surging production around the world has created a glut of oil. Analysts said there was little news in the market that would drive a rebound and attributed Tuesday's gains to technical support and traders closing bets that prices would fall, buying back futures to profit from their bearish wagers. "There's a little short-covering going on," said Phil Flynn, account executive at wholesale brokerage Price Futures Group in Chicago. "I do think there is a little bit of hesitation to drive it lower" at these levels, he said. There were some modestly bullish developments. In its short-term energy outlook, the U.S. Energy Information Administration reduced its projection for domestic oil production next year by 100,000 barrels a day, to 9.32 million from 9.42 million. Still, that represents growth of 2.6% from current levels. In addition, analysts surveyed by The Wall Street Journal said they expected domestic crude inventories fell by 2.7 million barrels last week. The EIA is set to release its weekly storage data Wednesday morning. Meanwhile, the U.S. dollar posted a rare decline on Tuesday, providing a brief respite from a monthslong strengthening trend that has weighed on commodity markets, particularly oil. Oil tends to rise when the dollar falls because it becomes less expensive for buyers using foreign currencies. Many analysts expect bearish conditions to resume and prevail in the coming months, barring unexpected geopolitical disruptions or a surprise move by the Organization of the Petroleum Exporting Countries to rein in production. Oil futures have tumbled since June as supplies--growing from production in the U.S., Iraq, Libya and elsewhere--have flooded the market and demand has remained tepid. OPEC member nations, led by Saudi Arabia, have decided to keep production steady rather than pulling back to support prices, in a bid to defend their market share. The U.S. is now producing more than nine million barrels of oil a day, and exporting nearly 3.8 million barrels a day of mainly refined products. On Monday, selling was driven in part by Iraq's decision to lower prices for its oil sold to Asia and the U.S., following a similar move by Saudi Arabia last week. In its own survey of domestic oil inventories released late Tuesday, the industry trade group American Petroleum Institute said stockpiles rose 4.4 million barrels in the week ended Dec. 5, gasoline stocks rose 6.7 million barrels, distillate stocks rose 4.3 million barrels and refinery operations increased 1.6 percentage points to 94.6% of capacity, according to a research note from Citigroup. "The API data for the week ended December 5 looks bearish across the board," the bank said. In refined product markets, gasoline for January delivery rose 1.7 cents, or 1%, to settle at $1.7236 a gallon on the Nymex. January diesel rose 2.91 cents, or 1.4%, to $2.0840 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Petroleum industry; Oil reserves; Profits; Inventory; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634443221
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Stre et Journal
Brazil's Tombini Sees Struggle Against Inflation Lasting Another Year; Central Bank Chief Says Global Economy, Oil Prices to Help Tame Inflation
Author: Trevisani, Paulo
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract: None available.
Full text: BRASÍLIA--Brazil's central bank President Alexandre Tombini said Tuesday that the struggle against sticky inflation is likely to last for about a year before consumer-price increases begin to fall. Mr. Tombini said the bank will keep on battling price increases, but the 4.5% inflation target isn't likely to be met before late 2016, and inflation could get even higher than the current level of 6.6%. Brazil's inflation target is 4.5%, with a tolerance range of two percentage points up or down. The central bank has raised its basic rate to 11.75% from 7.25% since April 2013 to cool down price increases. Although the impact of higher borrowing costs are still to be felt on prices, once they kick in the results could be lasting, Mr. Tombini said. "While the central bank's efforts aim at weakening inflation in a two-year span, the benefits of bringing inflation down to target by late 2016 could be lasting, or even permanent," Mr. Tombini told lawmakers during a scheduled testimony in the Chamber of Deputies. Mr. Tombini said that a stronger fiscal policy should help tame inflation. Besides monetary and fiscal policies, a weakening in oil prices globally should also help fighting inflation, he said. "The global picture remains complex, but it is likely to help Brazil to resume growth and tame inflation," Mr. Tombini said. Brazil's economy will grow just 0.18% this year, according to the median forecast in a weekly central bank survey with economists. Mr. Tombini said he expects global growth to be stronger next year, and it will help Brazil's trade balance, which is currently running a deficit. He added that as businesses recover confidence, the pickup in investment levels should also help. Write to Paulo Trevisani at Credit: By Paulo Trevisani
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634465630
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
IMF Sees Favorable Outlook for Kuwait's Economy; Non-Oil Growth to Reach 4-5% in the Medium Term
Author: Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
DUBAI--The outlook for Kuwait's economy is favorable, despite a recent slide in oil prices that has eaten away at government-budget surpluses across the energy-rich Persian Gulf, the International Monetary Fund said in an annual review of the country's economy Tuesday.
Full text: DUBAI--The outlook for Kuwait's economy is favorable, despite a recent slide in oil prices that has eaten away at government-budget surpluses across the energy-rich Persian Gulf, the International Monetary Fund said in an annual review of the country's economy Tuesday. The Kuwaiti economy is expected to grow by only 1.3% this year due to flat oil production, the IMF said in a statement, but the outlook is brighter because of better non-oil growth and moderate levels of inflation. The IMF expects non-oil GDP growth rates to reach 4% to 5% in the medium-term, driven by consumption and government-led infrastructure development. Declines in global oil prices from above $108 a barrel in June to around $65/bbl this week have shaken up the fiscal picture for countries across the Gulf, from Kuwait to Saudi Arabia and the United Arab Emirates, all of which rely heavily on energy revenues to fund budgets. Saudi Arabia, the world's second-largest oil producer behind the U.S., has decided not to play its usual role as a swing producer to support prices, further dampening the government-revenue outlook for oil exporters. But Kuwait's fiscal position is strong relative to its peers, the IMF said. The country needs oil to trade at an average of about $54 a barrel to balance its budget without cutting spending, according to IMF estimates earlier this year, the lowest such figure in the Gulf. Despite the positive economic outlook and stable fiscal balance, however, the IMF has urged for reforms to rein in government spending and withdraw subsidies while diversifying the economy away from oil. As in many Gulf countries, Kuwait's government subsidizes fuel and acts as the go-to employer for citizens, limiting the growth of the private-sector non-oil economy. "The fiscal position is currently strong but restraint in current spending is needed to preserve buffers and increase saving for future generations," the IMF said, adding that subsidy reform should be undertaken in such a way that protects poorer segments of the population. A new government capital expenditure plan for 2015 through 2019 should set "realistic targets," the IMF said, while hinting that the government needed to review some of the larger development projects it is planning. "A cost-benefit analysis of megaprojects is warranted," the IMF said. Write to Asa Fitch at Credit: By Asa Fitch
Subject: Petroleum industry; Economic development; Petroleum production
Location: Kuwait United Arab Emirates Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: New spapers
Language of publication: English
Document type: News
ProQuest document ID: 1634475078
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Will Wildcatter's 'Naked' Gamble on Oil Prices Pay Off? Continental Resources CEO Hamm Sells Hedges, Betting on Quick Rebound in Crude
Author: Ailworth, Erin; Zuckerman, Gregory; Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom.
Full text: Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom. But his latest gamble--a quick rebound in crude prices--is rubbing some investors and analysts the wrong way. Mr. Hamm, who founded Continental and owns 68% of its shares, announced in early November that the company had cashed in almost all of its financial hedges that guaranteed it could sell millions of barrels of oil for about $100 apiece. The company said it had realized $433 million in cash from selling the hedges, some of which ran through 2016. "We feel like we're at the bottom rung here on prices and we'll see them recover pretty drastically, pretty quick," Mr. Hamm said on a Nov. 5 call with analysts. He said the Organization of the Petroleum Exporting Countries was pushing down to slow America's expanding energy output. Now, removing the hedges, known in the industry as "going naked," looks misguided even to some of the company's fans, after the recent tumble for oil prices. The benchmark price for U.S. , falling from $81 in late October to $63.82 on Tuesday. If Continental had kept the contracts that insured it against lower crude prices, it could have reaped $52 million more for its oil in November, according to a Wall Street Journal review of company disclosures. And it might have received $75 million more this month, assuming current conditions continue. The Journal's calculation of about $127 million in forgone revenue is similar to projections by several Wall Street analysts, and those projections would continue to rise in the coming months if oil prices remain below $96 a barrel. The company said it disagreed with the Journal's figures but wouldn't provide its own, except to say that after figuring in revenue it received for selling its hedges, it expects the "net negative effect" to be $25 million to $30 million in November and December. It sold nearly $1.2 billion of oil and gas in the third quarter and reported net income of $533 million. "It was a bad move with terrible timing," said Gregg Jacobson, a portfolio manager at Caymus Capital Partners LP, a $200 million Houston hedge fund manager that had about 4.5% of its portfolio in Continental shares as of the end of the third quarter. Though he thinks the hedging sale will prompt some investors to view the company as unusually risky, Mr. Jacobson said he remains a supporter because of its executives' skill in finding and drilling for oil. "In the long run, the stock will respond to how they perform in the field," he said. While shares of many U.S. energy producers have had double-digit percentage declines since oil prices began falling in late June, Continental's stock has been hammered. Its shares, which closed up 7.2% at $36.18 on Tuesday, have fallen by more than half since the end of August, and more than 25% since Mr. Hamm disclosed on Nov. 5 that the company had sold the hedges. Mr. Hamm said in an interview that he still believes his bet could pay off but that it might take as many as two years to tell. "You can't condemn that as a bad decision," he said. "You haven't seen it play out." Companies like Continental can react quickly to market changes, he said, which gives them an advantage over OPEC's members. The cartel is discounting "the resiliency of U.S. producers," he said, adding that investors "need to look at Continental long-term." A wildcatter--he has called himself an "explorationist"-- the company that would become Continental in 1967 and first struck oil in 1971 in Oklahoma. More than two decades ago, he began focusing on exploring the then-little-known Williston Basin, which stretches from South Dakota to the Canadian province of Saskatchewan. Over time, his company became a leader in the Bakken formation in North Dakota, which has become one of the biggest oil fields in the U.S. Continental produced nearly 35 million barrels of oil last year, almost four times what it was producing five years earlier. That growth has helped push U.S. oil output to more than 9 million barrels of crude a day, up from 5 million in 2008. Though Continental has become a leader of the U.S. energy boom, it is unusual. Institutional and activist investors have curbed some of the risk-taking of wildcatters at other energy outfits, and few companies of Continental's size remain controlled by their founders. Continental said it had 5.2 million barrels insured in November and December at an average price of about $100. When oil prices are falling, hedges--contracts that many energy companies buy to protect against declining prices by guaranteeing a minimum price for the oil and gas they produce--become much more valuable. Continental notes that several of its competitors aren't hedged, including Apache Corp., which has no hedges on the books in 2015. Apache said it does have some production insured through the end of this year. Mr. Hamm isn't the first energy executive to abandon hedges. Under the leadership of former CEO Aubrey McClendon, Chesapeake Energy Corp. dropped its natural-gas hedges in 2011, leaving it exposed to a dismal gas market and dealing with a cash crunch the following year. Continental isn't likely to face a liquidity crisis--its debt is smaller than many of its competitors at about 1.7 times its cash flow, according to S&P Capital IQ. And the company has $1.75 billion in unused credit, recent financial filings show. "They've built such a good balance sheet, they have the luxury of making this gamble," said Jason Wangler, an analyst for Wunderlich Securities, who called the move a speculative bet. "They left money on the table in the short term." Mr. Hamm, he said, is "the guy you're investing in, as much as the company." Since selling Continental's hedges, Mr. Hamm has lost about $4.4 billion of his personal fortune as Continental's shares have fallen--a loss that could be compounded by Mr. Hamm's divorce. A judge recently awarded the former Mrs. Hamm, Sue Ann Arnall, a ; she appealed that decision on Friday. Mr. Hamm now owns about $9.2 billion of company stock. Some investors say Continental's primary acreage in the Bakken and elsewhere renders the hedging decision less important in the long-term. "Cash flow next year will be lower and more volatile, assuming prices stay under pressure," said Joe Chin, an analyst at Obermeyer Wood Investment Counsel LLLP, an Aspen, Colo., firm that owned 340,000 Continental shares at the end of the third quarter. "But we remain confident about management's ability to deploy capital." Write to Erin Ailworth at , Gregory Zuckerman at and Daniel Gilbert at Credit: By Erin Ailworth, Gregory Zuckerman and Daniel Gilbert
Subject: Petroleum industry; Financial performance; Investments; Crude oil prices
Location: United States--US North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634502649
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634502649?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nigeria's Growth to Slow in 2015, Says Finance Minister; Africa's Largest Economy to Slow By About a Percentage Point as Oil Prices Drop
Author: Hinshaw, Drew
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Abuja, NIGERIA--Growth in Africa's largest economy and oil exporter could slow by about a percentage point next year, Nigeria's finance minister said, as the country adjusts to falling crude prices.
Full text: Abuja, NIGERIA--Growth in Africa's largest economy and oil exporter could slow by about a percentage point next year, Nigeria's finance minister said, as the country adjusts to falling crude prices. Africa's most populous nation, is cutting spending on government travel and equipment, and raising taxes on yachts and private planes as . The tightening will shrink growth to around 5.3 %, delaying some infrastructure, and will force Nigeria to tax a booming informal economy that has long escaped oversight, said Ngozi Okonjo-Iweala, the country's finance minister. "Undoubtedly, its going to be tough times," she said, adding: "we're beginning to feel the impact." Tumbling oil prices have put on the back foot. But few of those countries are watching oil revenue dwindle at such an inopportune moment as Nigeria. The country's spending needs are soaring as oil prices move in the opposite direction. A costly and tense election next February is likely to pit a majority-Muslim north against the predominantly Christian southern regions. During the last election in 2011, at least 800 people were left dead in . On a brighter note, Nigeria's middle class is steadily growing and its major cities are expanding fast. However, such growth burdens potholed roads, congested ports and rusted power lines in need of repair. Then there is Boko Haram, an Islamist militancy boasting tanks and rocket launchers who control a Belgium-sized swath of northeastern Nigeria. A recently-purchased set of helicopter gunships and surveillance planes are helping Nigeria recapture some of that area, with Ms. Okonjo-Iweala saying that "they are being pushed out day by day." Nigeria's problems are starting to add up, Ms. Okonjo-Iweala said. If not for Boko Haram and dropping oil prices, Nigeria would be registering 6.8 % growth, she added. That is about what the country averaged each year for the past decade. And yet, even during boom years, Nigeria struggled to tax the new businesses flourishing in its informal market. Oil still accounts for 70 % of government revenue, but relatively little of it has been put aside. An oil savings fund that sat at more than $20 billion in 2008, just before oil first crossed $100 per barrel, has now fallen to only $4 billion. "On the savings side, yes, we could have done better," said Ms. Okonjo-Iweala. "Thank god we had the four billion." To prioritize, the finance minister is looking to focus spending on security and infrastructure projects. Ms. Okonjo-Iweala said she's hoping to limit cuts to health and education spending. In coming years, it will likely raise its valued-added-tax, she said. A fifth of the country's budget is spent on the military, and that is unlikely to change, Ms. Okonjo-Iweala said. "Do we have a choice? Should we say 'no, let us allow the insurgents to take over?'" Write to Drew Hinshaw at Credit: By Drew Hinshaw
Subject: Energy economics; Informal economy; Crude oil prices; Athletes
Location: Africa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634502661
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon Backs View on Global Energy Demand; Energy Giant, in Annual Industry Outlook, Projects Demand to Grow 35% by 2040
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Exxon Mobil Corp. left its outlook for global energy demand mostly unchanged on Tuesday, even as plunging oil prices have prompted energy companies to reduce their budgets and added pressure on countries that rely on oil revenue.
Full text: Exxon Mobil Corp. left its outlook for global energy demand mostly unchanged on Tuesday, even as plunging oil prices have prompted energy companies to reduce their budgets and added pressure on countries that rely on oil revenue. In its yearly outlook report on the industry, the oil giant affirmed its view that global energy demand will grow 35% by 2040, due to significant global growth in the middle class, an additional 2 billion people in the world and increased strength in emerging economies. It added, however, oil and natural gas will meet about 65% of global demand growth in 2040, up from last year's prediction of 60%. Exxon again said natural gas will continue to be the fastest-growing major fuel source, although rise of nuclear energy is expected to jump. Globally, Asia is expected to overtake Europe as the world's largest gas importer, as production in the region doubles and demand nearly triples. North America, meanwhile, is likely to become a net exporter of liquids by 2020, Exxon said, due to increasing supplies of natural gas liquids and bitumen from oil sands. Exxon's outlook comes as tumbling oil prices hit a fresh five-year low on Monday as global supplies, growing from production in the U.S., Iraq, Libya and elsewhere, have flooded the market and demand has remained tepid. In this year's report, Exxon emphasized the rising importance of renewable energy sources, like wind, solar and biofuels, which it said it expects to be among the fastest-growing major energy sources through 2040. Specifically, Exxon said renewable energies such as wind, solar and biofuels are projected to grow 6% a year on average through 2040, at which point they will approach about 4% of global energy demand. Nuclear energy will nearly double. The company also downplayed the significance of coal, which will be surpassed by natural gas. Coal demand is expected to rise through 2025 and then decline in line with the slowing of China's economic growth. Oil futures have been collapsing since June. Member nations of the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, have decided to keep production steady rather than pulling back to support prices, in a bid to defend their market share. That has prompted some companies to make changes already. ConocoPhillips said Monday from this year to $13.5 billion in 2015. The Houston-based oil firm said it plans to spend less on major projects that are nearly complete as well as defer spending on shale-oil prospects in North America. Meanwhile, Norway's Statoil ASA said Friday that it would suspend the operations of three oil-drilling rigs for longer than previously planned because of overcapacity. Write to Angela Chen at Credit: By Angela Chen
Subject: Natural gas; Petroleum industry; Alternative energy sources; Energy policy
Location: Asia North America
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634510685
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada's Harper: Won't Impose New Carbon-Emission Rules on Oil, Gas Sector; Country's Important Energy Industry Has Been Hit Hard by Drop in World Oil Prices
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract:
Mr. Harper said in Parliament Tuesday that his Conservative government would prefer to introduce new environmental rules for the oil patch in conjunction with the U.S. Canada's oil-and-gas sector is the largest source of the country's carbon emissions, at 25%, according to government data.
Full text: OTTAWA--Canada won't impose new carbon-emission rules on its oil and gas sector given the current turbulence in the industry, Prime Minister Stephen Harper said Tuesday. "Frankly, under the current circumstances in the oil and gas sector, it would be crazy economic policy to do unilateral penalties on that sector. We are clearly not going to do that," Mr. Harper said Tuesday in Canada's legislature, in response to a lawmaker's query about the lack of environmental rules for the energy sector. "We are not going to kill jobs," Mr. Harper said. Canada's important energy sector has been hard hit by the recent collapse of world oil prices, and a number of Canadian producers have announced plans to scale back spending and cut dividends as crude oil nears a five-year low. Mr. Harper's government, which counts the resource-rich western provinces as its core political base, had indicated it planned to introduce energy-sector carbon rules, but those measures have yet to emerge. Early this year, it said it was prepared to work with the U.S. on environmental rules covering the continental oil-and-gas sector. Mr. Harper said in Parliament Tuesday that his Conservative government would prefer to introduce new environmental rules for the oil patch in conjunction with the U.S. Canada's oil-and-gas sector is the largest source of the country's carbon emissions, at 25%, according to government data. The sharp decline in the price of oil, to a five-year low overnight Tuesday before rebounding, has producers across the globe rethinking energy projects. Canada has seen a spate of producers, from Canadian Oil Sands Ltd. to Baytex Energy Corp. to Trilogy Energy Corp., unveil plans to cut capital spending and their dividends. On Monday, the main Toronto stock index had its worst day in 18 months, weighed down by energy stocks. Bank of Canada Governor Stephen Poloz said last week lower oil prices will lead to slower economic growth, and it is "clearly negative" for Canada. Crude oil accounts for Canada's largest export, at 18% of total. Alberta Premier Jim Prentice told reporters in Edmonton that his province is reassessing its carbon-emissions policy, with a decision expected by the end of the year. However, he added that "under no circumstances are we going to make changes at this difficult time" that would hinder investment in the oil-rich province. Write to Paul Vieira at Credit: By Paul Vieira
Subject: Energy industry; Petroleum industry; Energy policy; Carbon; Capital expenditures
Location: Canada
People: Prentice, Jim Poloz, Stephen
Company / organization: Name: Baytex Energy Corp; NAICS: 324110; Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634597410
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634597410?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
North Dakota Energy Regulator Mandates Steps to Reduce Oil Volatility; State Energy Regulator Issues Steps to Make Oil Safer for Rail Transport
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Dec 2014: n/a.
Abstract: None available.
Full text: North Dakota issued new rules Tuesday that require energy companies to treat crude-oil pumped from the Bakken Shale to make it less volatile and safer to transport by railroads. In an unprecedented step that comes amid growing concern about the hazards of oil trains moving across the U.S. and Canada, the North Dakota Industrial Commission said it will require well operators to strip explosive gases from crude oil that shows a high vapor pressure reading. The state regulation will go into effect on April 1, 2015. It requires that companies operating in North Dakota to run crude oil through equipment at or near the well site that heats up the liquid to burn off volatile gases. The rule is the first major move by regulators to address the role of gaseous, volatile crude-oil in railroad accidents. Several oil trains laden with crude pumped from the Bakken have , including the deadly accident in Lac-Mégantic, Quebec, in July 2013 that killed 47 people. Under the new mandate, North Dakota oil can't be transported unless it has a vapor pressure reading of 13.7 pounds a square inch or lower. To keep vapor pressures at or below that level, most oil will need to be heated through special equipment to a minimum of 110 degrees, said Lynn Helms, director of the state's Department of Mineral Resources. In a recent survey conducted by the state, Mr. Helms said more than half of 300 existing heater-treaters inspected were already in compliance. An additional one-third of the equipment was operating below 110 degrees and about 13% of the equipment wasn't using any heat to treat the oil. Write to Chester Dawson at Credit: By Chester Dawson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 9, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634597436
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634597436?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: Southwest and Oil Prices
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
Amid stock-market wailing, the muffled thud of a dead cat bouncing off Wall Street's asphalt could be heard Tuesday.
Full text: Amid stock-market wailing, the muffled thud of a dead cat bouncing off Wall Street's asphalt could be heard Tuesday. Energy stocks, trashed since the summer as oil has slumped, were the only S&P 500 industry sector flashing green Tuesday. Meanwhile, Southwest Airlines dived by 3.2%, making it one of the day's worst performers. Oil eked out a small gain so, superficially, investors could feel better about drillers' revenue and less so about Southwest's fuel costs. In reality, though, the impact of crude's fall on the oil industry's budgets and balance sheets has hardly begun to come through. Oil futures for 2015 now average less than $65 a barrel, down about $5 in just the past week. Southwest, despite hedges, is exposed to 80% of the fall in oil prices. That, along with the airline's focus on a strengthening U.S. economy, helps explain why it is the S&P 500's top stock this year, up 124% before Tuesday. And, indeed, that gain more than anything else likely explains why it sold off on a day when fundamental explanations seem in short supply.
Subject: Petroleum industry; Statistical data
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634605954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634605954?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
North Dakota Energy Regulator Mandates Steps to Reduce Oil Volatility; State Energy Regulator Issues Steps to Make Oil Safer for Rail Transport
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract: None available.
Full text: North Dakota issued new rules Tuesday that require energy companies to treat crude-oil pumped from the Bakken Shale to make it less volatile and safer to transport by railroads. In an unprecedented step that comes amid growing concern about the hazards of oil trains moving across the U.S. and Canada, the North Dakota Industrial Commission said it will mandate that well operators strip explosive gases from crude-oil that shows a high vapor-pressure reading. The state regulation will go into effect on April 1, 2015. It requires that companies operating in North Dakota process their crude-oil through equipment at or near well sites that heats up the liquid to burn off volatile gases. The rule is the first major move by regulators to address the role of gaseous, volatile crude-oil in railroad accidents. Several oil trains laden with crude pumped from the Bakken have derailed and exploded, including the deadly July 2013 accident in Lac-Mégantic, Quebec, that killed 47 people. Roughly two-thirds of all oil pumped in North Dakota leaves the state on trains because not enough pipelines exist to move it. Oil-train traffic has expanded exponentially in the five years as crude production in the Bakken Shale soared. In 2009, U.S. railroads transported about 21,000 barrels a day of oil; today they carry 1.1 million barrels a day, according to data from the Surface Transportation Board, a federal regulator. Trains with 100 railcars linked together that stretch for a mile or more regularly move crude from North Dakota near the Canadian border to U.S. refiners at the East, West and Gulf Coasts. "It will create a consistent, stable fluid," Lynn Helms, director of the state's Department of Mineral Resources, said of the new regulations. Under the new mandate, North Dakota oil can't be transported unless it has a vapor pressure reading of 13.7 pounds a square inch or lower. To keep the pressure at or below that level most oil will need to be heated to a minimum of 110 degrees, Mr. Helms said. Special equipment called heater-treaters are used to burn off explosive gases from the oil. The new pressure standards represent the first time any state or federal regulator has said oil must be conditioned to make it safer to transport, but they still allow for a relatively high vapor pressure reading relative to other common types of crude. By comparison, Louisiana Light Sweet pumped in the Gulf of Mexico, has a vapor pressure of 3.33 PSI, according to data from the Capline pipeline. Basra Light, a type of crude pumped in Iraq and imported into the U.S., has a reading of 4.8. Bakken oil producers spent months fighting new regulations and initial industry reaction to the new rule was muted. "We're going to take some time to very carefully review the order with our members to determine what the implications will be," said Tessa Sandstrom, a spokesperson for the North Dakota Petroleum Council, an industry trade group. "The new regulations should help, but they're only as good as the enforcement," said Don Morrison, executive director of the Dakota Resource Council, an environmental group. "Our state regulators have shown a reluctance to enforce rules in the past so it's up to them to implement this effectively." It is unclear how costly or disruptive the rules will be to well operators, but state officials said a recent survey found that a majority of existing field equipment would pass or come close to meeting the new standards. In the last three weeks about 300 existing heater-treaters were inspected and roughly half of them are already in compliance, Mr. Helms said. An additional one-third of the equipment was operating below 110 degrees but could be brought into compliance. And about 13% of the equipment inspected wasn't using any heat to treat the oil. Mr. Helms said the new rules on crude-oil treatment may make it more difficult for some Bakken crude producers to meet target to reduce the amount of surplus natural gas burned off, or flared, from well sites. Russell Gold contributed to this article. Write to Chester Dawson at Credit: By Chester Dawson
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634606132
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634606132?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Oil Gets Back In Win Column
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Dec 2014: C.4.
Abstract:
In its own survey of domestic oil inventories released late Tuesday, the industry trade group American Petroleum Institute said stockpiles rose 4.4 million barrels in the week ended Dec. 5, gasoline stocks rose 6.7 million barrels, distillate stocks rose 4.3 million barrels and refinery operations increased 1.6 percentage points to 94.6% of capacity, according to a research note from Citigroup.
Full text: Oil prices arrested their free fall, notching a small gain in a move analysts attributed to profit-taking by traders with bearish bets against the market. Brent crude for January delivery, the global benchmark, snapped a five-session losing streak to end up 65 cents, or 1%, at $66.84 a barrel on the ICE Futures Europe exchange. The front-month U.S. contract ended higher for the first time in four days, rising 77 cents, or 1.2%, to $63.82 a barrel on the New York Mercantile Exchange. Both contracts remain down about 41% from 2014 highs hit in June, as surging production around the world has created a glut of oil. Analysts said there was little news that would drive a rebound and attributed Tuesday's gains in part to traders closing bets that prices would fall, by buying back the contracts that profit from a drop in prices. "There's a little short covering going on," said Phil Flynn, account executive at wholesale brokerage Price Futures Group in Chicago. "I do think there is a little bit of hesitation to drive it lower" at these levels, he said. There were some modestly bullish developments. In its short-term energy outlook, the U.S. Energy Information Administration reduced its projection for domestic oil production next year by 100,000 barrels a day, to 9.32 million from 9.42 million. Still, that represents growth of 2.6% from current levels. In addition, analysts surveyed by The Wall Street Journal said they expected domestic crude inventories fell by 2.7 million barrels last week. The EIA is set to release its weekly storage data Wednesday morning. Meanwhile, the U.S. dollar posted a rare decline on Tuesday, providing a brief respite from a monthslong strengthening trend that has weighed on commodity markets, particularly oil. Oil tends to rise when the dollar falls because it becomes less expensive for buyers using foreign currencies. Many analysts expect bearish conditions to resume and prevail in coming months, barring unexpected geopolitical disruptions or a surprise move by the Organization of the Petroleum Exporting Countries to rein in production. Oil prices have tumbled since June as supplies -- increasing from production in the U.S., Iraq, Libya and elsewhere -- have flooded the market and demand has remained tepid. In its own survey of domestic oil inventories released late Tuesday, the industry trade group American Petroleum Institute said stockpiles rose 4.4 million barrels in the week ended Dec. 5, gasoline stocks rose 6.7 million barrels, distillate stocks rose 4.3 million barrels and refinery operations increased 1.6 percentage points to 94.6% of capacity, according to a research note from Citigroup. "The API data for the week ended Dec. 5 looks bearish across the board," the bank said. Credit: By Christian Berthelsen
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 10, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634670879
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Will CEO's 'Naked' Oil Gamble Pay Off?
Author: Ailworth, Erin; Zuckerman, Gregory; Gilbert, Daniel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Dec 2014: B.1.
Abstract:
When oil prices are falling, hedges -- contracts that many energy companies buy to protect against declining prices by guaranteeing a minimum price for the oil and gas they produce -- become much more valuable.\n
Full text: Harold Hamm's willingness to make risky bets helped him build Continental Resources Inc. into the one of the biggest oil producers in North Dakota's Bakken Shale and a symbol of the U.S. energy boom. But his latest gamble -- a quick rebound in crude prices -- is rubbing some investors and analysts the wrong way. Mr. Hamm, who founded Continental and owns 68% of its shares, announced in early November that the company had cashed in almost all of its financial hedges that guaranteed it could sell millions of barrels of oil for about $100 apiece. The company said it had realized $433 million in cash from selling the hedges, some of which ran through 2016. "We feel like we're at the bottom rung here on prices and we'll see them recover pretty drastically, pretty quick," Mr. Hamm said on a Nov. 5 call with analysts. He said the Organization of the Petroleum Exporting Countries was pushing down oil prices to slow America's expanding energy output. Now, removing the hedges, known in the industry as "going naked," looks misguided even to some of the company's fans, after the recent tumble for oil prices. The benchmark price for U.S. oil has continued to slide, falling from $81 in late October to $63.82 on Tuesday. If Continental had kept the contracts that insured it against lower crude prices, it could have reaped $52 million more for its oil in November, according to a Wall Street Journal review of company disclosures. And it might have received $75 million more this month, assuming current conditions continue. The Journal's calculation of about $127 million in forgone revenue is similar to projections by several Wall Street analysts, and those projections would continue to rise in the coming months if oil prices remain below $96 a barrel. The company said it disagreed with the Journal's figures but wouldn't provide its own, except to say that after figuring in revenue it received for selling its hedges, it expects the "net negative effect" to be $25 million to $30 million in November and December. It sold nearly $1.2 billion of oil and gas in the third quarter and reported net income of $533 million. "It was a bad move with terrible timing," said Gregg Jacobson, a portfolio manager at Caymus Capital Partners LP, a $200 million Houston hedge fund manager that had about 4.5% of its portfolio in Continental shares as of the end of the third quarter. Though he thinks the hedging sale will prompt some investors to view the company as unusually risky, Mr. Jacobson said he remains a supporter because of its executives' skill in finding and drilling for oil. "In the long run, the stock will respond to how they perform in the field," he said. While shares of many U.S. energy producers have had sharp declines since oil prices began falling in late June, Continental's stock has fared worse. Its shares, which closed up 7.2% at $36.18 on Tuesday, have fallen by more than half since the end of August, and more than 25% since Mr. Hamm disclosed the company had sold the hedges. Mr. Hamm said in an interview that he still believes his bet could pay off but that it might take as many as two years to tell. "You can't condemn that as a bad decision," he said. "You haven't seen it play out." Companies like Continental can react quickly to market changes, he said, which gives them an advantage over OPEC's members. The cartel is discounting "the resiliency of U.S. producers," he said, adding that investors "need to look at Continental long-term." A wildcatter -- he has called himself an "explorationist" -- Mr. Hamm started the company that would become Continental in 1967 and first struck oil in 1971 in Oklahoma. More than two decades ago, he began focusing on exploring the then-little-known Williston Basin, which stretches from South Dakota to the Canadian province of Saskatchewan. Over time, his company became a leader in the Bakken formation in North Dakota. Continental produced nearly 35 million barrels of oil last year, almost four times what it was producing five years earlier. That growth has helped push U.S. oil output to more than 9 million barrels of crude a day, up from 5 million in 2008. Though Continental has become a leader of the U.S. energy boom, it is unusual. Institutional and activist investors have curbed some of the risk-taking of wildcatters at other energy outfits, and few companies of Continental's size remain controlled by their founders. When oil prices are falling, hedges -- contracts that many energy companies buy to protect against declining prices by guaranteeing a minimum price for the oil and gas they produce -- become much more valuable. Continental notes that several of its competitors aren't hedged, including Apache Corp., which has no hedges on the books in 2015. Apache said it does have some production insured through the end of this year. Continental's debt is smaller than many of its competitors at about 1.7 times its cash flow, according to S&P Capital IQ. And the company has $1.75 billion in unused credit, recent financial filings show. Since selling Continental's hedges, Mr. Hamm has lost about $4.4 billion of his personal fortune as Continental's shares have fallen -- a loss that could be compounded by a divorce. A judge recently awarded the former Mrs. Hamm, Sue Ann Arnall, a nearly $1 billion settlement; she appealed that decision on Friday. Mr. Hamm now owns about $9.2 billion of company stock. Some investors say Continental's primary acreage in the Bakken and elsewhere renders the hedging decision less important in the long-term. "Cash flow next year will be lower and more volatile, assuming prices stay under pressure," said Joe Chin, an analyst at Obermeyer Wood Investment Counsel LLLP, an Aspen, Colo., firm that owned 340,000 Continental shares at the end of the third quarter. "But we remain confident about management's ability to deploy capital."
Credit: By Erin Ailworth, Gregory Zuckerman and Daniel Gilbert
Subject: Petroleum industry; Crude oil prices; Investment policy; Hedge funds
Location: North Dakota
People: Hamm, Harold
Company / organization: Name: Continental Resources Inc; NAICS: 211111
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Dec 10, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634692654
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634692654?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc . Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Airline Profit Outlook Rises on Plunging Oil Prices; Net Profit for the Industry Is Projected To Be $19.9 billion This Year, Says Industry Body
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
Net profit for the industry is projected to be $19.9 billion, the International Air Transport Association that represents more than 200 carriers said in a prepared statement on Wednesday.
Full text: LONDON--The global airline industry's profit this year will be 10% greater than previously expected and climb further, bolstered by a sharp drop in oil prices, a leading industry organization forecasts. Net profit for the industry is projected to be $19.9 billion, the International Air Transport Association that represents more than 200 carriers said in a prepared statement on Wednesday. IATA raised its profit forecast from $18 billion in June even as it trimmed its outlook for total passenger numbers this year. Carriers are projected to deliver a collective profit of $25 billion next year, the industry group said. Airlines are particularly exposed to swings in oil prices. Fuel typically represents about 30% of their operating costs. Oil prices have plunged more than 40% since their June high. "There is no doubt that the recent fall in the oil price is a relief for airlines," Tony Tyler, IATA's director general, said in the statement. The industry's anticipated full-year fuel bill has shrunk by $6 billion since midyear and should end 2.4% below last year's level. Carriers next year are expected to spend 5.6% less on fuel even as total consumption rises 5.1% by volume and traffic rises 7%, IATA said. Passengers should see some benefit. IATA projected average fares will fall 5.1% next year. This year's return should mark the fifth successive year of profits for an industry notorious for losing money. Airlines made a combined profit of $10.6 billion in 2013 and $6.1 billion the year before. Airlines in North America are poised to clock the biggest profit this year and next, at $11.9 billion and $13.2 billion, respectively, IATA said. The group said carriers in all regions should be profitable next year, and that European airlines should see the biggest jump in profit. Europe's carriers have benefited less than U.S. rivals from plunging oil prices because many have used hedging to lock in costs for the year. European airline-industry profit should rise to $4 billion next year as carriers catch up on fuel-cost savings with U.S. and Asian carriers, which IATA projects will return a combined $5 billion in profit. Globally, industry profit margins remain thin, though, at 2.7% this year and a projected 3.2% next year. "Given all the risks in the world today--economic uncertainty, political instability, public-health emergencies and terrorism among them--there is not much of a buffer to absorb a significant change for the worse in the operating environment," said IATA's Mr. Tyler. Write to Robert Wall at Credit: By Robert Wall
Subject: Airlines; Prices; Cost control; Profit margins; Airline industry
Location: United States--US
People: Tyler, Tony
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634693606
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634693606?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japan Airlines Flies on More Than Cheap Oil
Author: Bhattacharya, ByAbheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
[...]Japan's ANA Holdings, which operates All Nippon Airways, has hedged 85% of its fuel costs, and Singapore Airlines roughly 60% for the fiscal year ending next March, says Credit Suisse's Timothy Ross.
Full text: Of all the airline stocks cheap oil has sent aloft, Japan Airlines also has the benefit of generating its own wind beneath its wings. Crude oil's collapse has slashed a key cost for airlines and made this sector an investor darling. Still, oil helps some firms more than others. One factor here is how much a carrier hedges its fuel costs. For instance, Japan's ANA Holdings, which operates All Nippon Airways, has hedged 85% of its fuel costs, and Singapore Airlines roughly 60% for the fiscal year ending next March, says Credit Suisse's Timothy Ross. Cheaper oil may not matter as much for these firms. In contrast, Japan Airlines, or JAL, has hedged only 40% of its fuel costs for this fiscal year and 20% next year. That makes the lower oil price a meaningful tailwind. If jet fuel prices keep falling, every $1 drop will cut JAL's fuel costs by 2.3 billion yen ($19.3 million), or 0.8% of last year's fuel bill. It isn't just cheap oil that makes JAL attractive. The airline has become impressively efficient since emerging from bankruptcy in 2011. Some debts were forgiven, it stopped flying unprofitable routes, and it even reduced head count by a third, almost unthinkable given Japan's tight labor laws. A weaker yen could have a negative impact on outbound international travel, but so far it has been made up with strong inbound passenger numbers. JAL's cash return on invested capital--a measure of efficiency that strips out noncash charges such as depreciation--has averaged 40% the last three years, according to FactSet. This may be the highest in the world. Hong Kong-based Cathay Pacific returned an average 10.4% during this time, Singapore Airlines 14.4% and ANA 13.9%. Even Delta Air Lines, whose phoenix-like recovery has propelled its shares, only managed a 25.6% return on invested capital. JAL shares have soared almost 40% since oil began its slide in June, but that doesn't mean they are expensive. JAL's enterprise value, after adjusting for net cash, is 4.4 times forward earnings before interest, tax, depreciation and amortization. ANA commands 6.3 times. The global average is 8 times. JAL's valuations may get a lift if it receives a credit rating next year and is included in a major Japanese stock index. Cheap oil isn't a full blessing for airlines, since it partly reflects slower global growth. But in a sector where most things often go wrong, JAL has several things going just right. Write to Abheek Bhattacharya at Credit: ByAbheek Bhattacharya
Subject: Airlines; Airline industry; Costs
Location: Japan
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Delta Air Lines Inc; NAICS: 481111; Name: Cathay Pacific Airways Ltd; NAICS: 481111; Name: Japan Airlines Corp; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publicationyear: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634708250
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Tumble Amid Global Supply Glut; Prices at Lows Not Seen Since Global Recession in 2009, Further Declines Expected
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
The amount of crude that refiners and traders have on hand rose by 1.5 million in the week ended Dec. 5 to 380.8 million barrels, enough to keep the nation's refineries humming at their current rates for about 23 days, according to the U.S. Energy Information Administration. Money managers added to their net bullish position in both the Nymex and Brent markets in the week ended Dec. 2, according to the most recently available data from the U.S. Commodity Futures Trading Commission and Intercontinental Exchange Inc. Trying to guess where prices will bottom out is too risky for John McLane, president of Mobius Asset Management, which manages $6.5 million.
Full text: Oil prices took another tumble on Wednesday to fresh five-year lows on signs that the global supply glut driving the selloff is deepening. New data out of the U.S., the world's biggest oil consumer, showed an unexpected increase in crude supplies last week. Meanwhile, the latest projections from the Organization of the Petroleum Exporting Countries . The benchmark U.S. oil price slid 4.5% to $60.94 a barrel, the lowest level since July 2009 on the New York Mercantile Exchange. It was the biggest one-day drop since Nov. 28, the session that followed OPEC's decision to maintain its oil-output target. Brent crude, a gauge of global prices, fell 3.9%, or $2.60, to $64.24 a barrel, also the lowest since July 2009 on ICE Futures Europe. The latest plunge in crude rippled . The Dow Jones Industrial Average dropped 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline since Oct. 9. Energy stocks were the worst-performing sector of the S&P 500 on Wednesday, with oil companies among the day's biggest laggards. As prices have plunged more than 40% in about six months, market watchers have scrambled to adjust forecasts and explain the glut of oil that is forcing producers to cut prices as they compete for buyers. Supply growth, particularly in the U.S., exceeded expectations, while demand growth has been moderate due to a slowdown in China and Europe. "What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse Group AG. "OPEC basically put itself out of play. [...] There's no indication that [the market is] getting any less weak." OPEC, which controls about one-third of global oil production, , even though demand for OPEC crude is expected to fall below that level. OPEC said Wednesday that demand for its oil will decline to 28.9 million barrels a day in 2015, down from 29.4 million barrels a day in 2014. The amount of crude that refiners and traders have on hand rose by 1.5 million in the week ended Dec. 5 to 380.8 million barrels, enough to keep the nation's refineries humming at their current rates for about 23 days, according to the U.S. Energy Information Administration. That compares with expectations for a decline of 2.7 million barrels based on estimates of analysts surveyed by The Wall Street Journal. U.S. crude-oil output last week rose to 9.1 million barrels a day, the highest level since 1983, according to the EIA. "Obviously there's still unabated strength in the production sector," said John Kilduff, founding partner of Again Capital in New York. "This is just feeding on itself." Oil companies that have made big bets on shale-rock formation in the U.S., a resource that became economically feasible to tap with the advent of new drilling technology, have become victims of their own success. Their shares have been pummeled by the decline in oil prices, which is likely to cut deeply into their revenues. Continental Resources Inc. fell 7.3%, Penn Virginia Corp. fell 4.6% and Whiting Petroleum Corp. declined 10%. Even bigger energy companies with more diversified operations took a hit on Wednesday. These companies have raced to adjust their production and spending plans to suit an environment of sharply lower oil prices. BP PLC, which has aggressively slimmed down since the 2010 Deepwater Horizon disaster, , outlining plans Wednesday to book $1 billion in restructuring charges over the next year and reduce spending on development by as much as $2 billion. U.S. oil giant ConocoPhillips also rattled the market earlier this week . But plans to cut investment in new production in the U.S. won't immediately lower global oil supplies, said Jack Rivkin, chief investment officer at Altegris Advisors LLC, which oversees about $2.5 billion. "In the meantime, everybody else around the world is in the same position: They need the revenues," he said. "It's going to take an improvement in global economies to actually create a true bottom here in oil prices." Most of Altegris's managed-futures funds have wagers that oil prices will fall, Mr. Rivkin said. Oil prices have sunk even as money managers, including hedge funds, have added to their aggregate bet that prices will rise. Money managers added to their net bullish position in both the Nymex and Brent markets in the week ended Dec. 2, according to the most recently available data from the U.S. Commodity Futures Trading Commission and Intercontinental Exchange Inc. Trying to guess where prices will bottom out is too risky for John McLane, president of Mobius Asset Management, which manages $6.5 million. Mr. McLane has small wagers that oil prices will fall but is holding most of his energy fund in cash. "People always use the expression, 'Catching a hot knife.' This is like catching a nuclear bomb," he said. "This does not have any twinge of stopping." Gasoline futures fell 8.51 cents, or 4.9%, to $1.6385 a gallon. Diesel slid 4.31 cents, or 2.1%, to $2.0409 a gallon. Summer Said contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Supply & demand; Crude oil prices; Petroleum production
Location: United States--US
People: Glasenberg, Ivan
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634708319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634708319?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC Sees Less Demand for Its Oil in 2015; Producer Group Says It Cut Its Output Last Month
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
In its latest monthly report, the Organization of the Petroleum Exporting Countries said its collective crude-oil production declined by 390,100 barrels a day to 30.05 million barrels a day in November, compared with October.
Full text: OPEC cut its collective oil output to just above the producer group's targeted production ceiling last month, but it expects demand for its oil to be well below the level at which it is currently pumping next year as the U.S. shale boom persists. In its latest monthly report, the Organization of the Petroleum Exporting Countries said its collective crude-oil production declined by 390,100 barrels a day to 30.05 million barrels a day in November, compared with October. That is just a touch above OPEC's output ceiling of 30 million barrels a day--a level the cartel agreed to stick to , despite calls from some of its members for more dramatic production cuts to counter the sharp fall in oil prices since the summer. OPEC trimmed its forecast for demand for its oil by 300,000 barrels a day, to 28.9 million a day next year, compared with 29.4 million barrels a day in 2014. If OPEC were to produce at that level in 2015, it would be its lowest output since 2003 when it pumped 27.048 million barrels a day, according to data published on the OPEC website. "The downward revision reflects the upward adjustment of non-OPEC supply as well as the downward revision in global demand," OPEC said in the report. The trimmed forecast, along with a surprise increase in U.S. crude stockpiles, pushed oil prices sharply lower on Wednesday. The benchmark U.S. oil price recently was 4% lower at $61.22 a barrel on the New York Mercantile Exchange. The weekly reading signals a potential deepening of a global glut that has sent crude-oil prices plunging more than 40% in nearly six months. The drop in OPEC's November production, meanwhile, was driven largely by lower Libya crude output, which OPEC said fell by about 248,300 barrels a day to 638,000 barrels a day. Saudi Arabia's November output fell by 60,100 barrels a day to 9.59 million barrels a day, while Kuwait output dropped by 59,400 barrels a day to 2.69 million barrels a day, the report said. OPEC bases its output figures estimates on secondary sources, such as shipping trackers and energy consultancies. OPEC also trimmed its forecasts for world oil demand. Demand in 2014 is expected to grow by 930,000 barrels a day to average around 91.13 million barrels a day, a reduction of 120,000 barrels a day from last month's estimate. For 2015, world fuel consumption will rise by 1.12 million barrels a day to average 92.26 million a day, or about 70,000 barrels a day lower than OPECs' expectation last month. OPEC also raised its forecasts for oil supply from outside the group by 40,000 to 55.95 million barrels a day in 2014. Non-OPEC supply was also increased by 120,000 barrels a day to 57.31 million a day in 2015, mainly due to higher output from the U.S., Canada and Brazil. The sharp drop in oil prices--and the related glut of supply--have sent global energy companies scrambling. BP on Wednesday outlined plans to book $1 billion in restructuring charges over the next year and reduce spending on development by as much as $2 billion. Those moves followed plans from ConocoPhillips, which earlier this week said it would reduce capital spending next year by 20%. Write to Summer Said at Credit: By Summer Said
Subject: Petroleum industry; Supply & demand; Capital expenditures; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634708326
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Fall Deepens BOJ Policy Board Rift; Opponents to October's Easing May Reject Push to 'Mechanically' Ease
Author: Ito, Tatsuo; Nakamichi, Takashi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
[...]one development that has thwarted the expectations of the members who backed the easing is that oil prices have continued to slide. Since the BOJ's action, global oil prices have dropped about 20%, particularly after members of the Organization of the Petroleum Exporting Countries last month turned down calls to cut their oil output.
Full text: TOKYO--The continued fall in crude oil prices is deepening a rift among Bank of Japan policy-board members, indicating that some of them may reject any push for extra stimulus next year. The BOJ surprised markets on Oct. 31 with its decision to ramp up its easing measures to prevent concerns about falling prices from springing back to life, triggered by a sharp drop in oil prices and weakening inflation expectations. The decision, which passed by a thin majority, pushed down the yen more than 10% against the dollar and drove up Japanese share prices to a seven-and-a-half-year high before their retreat this week. The market's vigorous reaction to the decision appeared to offer a tailwind that would enable the BOJ to achieve its long-standing 2% inflation target. But one development that has thwarted the expectations of the members who backed the easing is that oil prices have continued to slide. Since the BOJ's action, global oil prices have dropped about 20%, particularly after members of the Organization of the Petroleum Exporting Countries last month turned down calls to cut their oil output. The decline has fueled speculation among market participants that the BOJ will be eventually forced to do something next year, even though BOJ officials have ruled out any incremental action. Overseas investors take it for granted that the BOJ will act again if oil prices as well as inflation expectations go down, said Yunosuke Ikeda, chief currency strategist at Nomura Securities. "If that isn't the case, [investors] could move to unwind oversized yen-selling positions," he added. The presumption that the BOJ will be backed into a corner is something that the four board members who voted against the extra action had feared, people familiar with the BOJ's policy say. They say that even if crude prices stay weak, the policy board members who voted against additional easing in October wouldn't give in to pressure to automatically ease. Even one member who voted in favor of easing made her stance clear in November. Sayuri Shirai told reporters in Hiroshima that a downward revision in the BOJ's views "won't mechanically lead to further steps." At the October meeting, some of the four opponents voiced concerns that steering monetary policy with a close focus on unpredictable oil prices is risky, potentially resulting in the board being forced to ease whenever oil prices sink further, two of the people close to the BOJ said. Such a view, however, wasn't reflected in the minutes of that meeting in which some of the dissenters cited potential side effects of the BOJ's latest steps, including the concern that by effectively buying all new issuance of government debt the bank might be seen as merely funding government deficits. One of the people close to the BOJ said the dissenters appear to be more united against views advocated by Gov. Haruhiko Kuroda and his colleagues supporting him, saying recent slides in oil prices will likely be a key point of discussion when the policy board meets next week. There will be no change to the BOJ's policy at the meeting, however, as they are still assessing the effects of the latest easing, central bank watchers say. But a test for the BOJ could come soon when the central bank issues an interim update on its outlook for growth and prices in January. In October, the BOJ's median forecast for prices predicted that the nationwide consumer-price index--factoring out perishable food and the impact of a tax hike in April--would rise 1.7% in the fiscal year starting in April 2015, a level within reach of its 2.0% target in about a two-year time-frame. Japan's CPI grew 0.9% in October, marking its weakest growth in a year. With the fall in oil prices, the BOJ will likely have no choice but to cut its price forecast again in January, some of the people familiar with the BOJ's thinking, as well as private economists, say. The lowered expectations could stoke speculation for further action, or it could force Mr. Kuroda to push back the timing of when the price target will be reached if the BOJ refrains from fresh action, one of the people said. Another person close to the BOJ said the nine-policy board members from the outset were at odds over Mr. Kuroda's strong commitment to achieving the 2% target in about two years. But as the deadline approaches, the conflicting viewpoints have unexpectedly come into the spotlight in the form of the 5-4 vote, the person added. Write to Tatsuo Ito at and Takashi Nakamichi at Credit: By Tatsuo Ito And Takashi Nakamichi
Subject: Petroleum industry; Central banks; Meetings; Consumer Price Index; Crude oil prices
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634708486
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Uganda in Final Phase of Talks With Oil Refinery Bidders; Up to $4 Billion Project Will Create 60,000 Barrels a Day Oil Refinery
Author: Bariyo, Nicholas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
The refinery contract is also viewed as the final development of the country's oil fields, now estimated to contain some 6.5 billion barrels of crude oil and 500 billion cubic feet of natural gas.
Full text: KAMPALA, Uganda--The Ugandan government has entered the final phase of talks with two consortia from Russia and South Korea expecting to announce the final bidder for its maiden oil refinery in February next year, the energy and minerals ministry said on Wednesday. After weeks of talks, the government asked the consortium led by Korea's SK Group and another led by RT Global Resources from Russia to present their final technical and financial offers by January 19, Fred Kabagambe Kaliisa, the ministry's permanent secretary said. The bidding process now enters its most decisive phase which will see the country issue its largest ever contract in the energy sector allowing the construction of a 60,000 barrels-a-day refinery. The project is expected to cost up to $4 billion. "The bidders will prepare and submit their refined technical, financial and commercial and legal offers," the ministry said. "They will also detail their financial and long-term business plans and review the terms of the different project agreements proposed by government." But the development also comes as crushing oil prices are putting global oil companies under pressure to rethink expenditure on new projects. Analysts have warned that projects in frontier markets are particularly at a greater risk. Company officials couldn't be reached for immediate comment. In June, Uganda selected the two bidders from a group of six companies and was initially expected to announce the winning bidder in December. Mr. Kaliisa said that during negotiations, SK Group and RT Global Resources asked for an incentive package which required additional time for consultations with other government agencies, delaying the final selection. The refinery contract is also viewed as the final development of the country's oil fields, now estimated to contain some 6.5 billion barrels of crude oil and 500 billion cubic feet of natural gas. Oil production is expected to start by 2018, hitting plateau production of around 220,000 barrels-a-day by around 2022. Write to Nicholas Bariyo at Credit: By Nicholas Bariyo
Subject: Petroleum refineries; Petroleum industry; Petroleum production
Location: Uganda Russia South Korea
Company / organization: Name: SK Group; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634745872
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634745872?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Tumble Along With Oil Prices; Crude-Oil Futures Settle at New Five-Year Low
Author: Strumpf, Dan; Vaishampayan, Saumya
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out amid the drop in oil prices. While a decline in oil prices is a drag on earnings for energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management.
Full text: U.S. stocks tumbled Wednesday after a renewed downturn in oil prices rattled investors and led to sharp declines in already battered energy shares. The Dow Jones Industrial Average declined 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline since Oct. 9. The S&P 500 index dropped 33.68 points, or 1.6%, to 2026.14. The Nasdaq Composite Index fell 82.44 points, or 1.7%, to 4684.03. The declines were market wide. Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. But shares of materials, industrials and technology companies were also down sharply. All 10 major market sectors declined. Traders and investors attributed the slide to the , spurred by an unexpected jump in domestic oil stockpiles that underscored the scale of the U.S. oil glut. Benchmark U.S. crude tumbled 4.5% to $60.94 a barrel, its lowest level since July 2009. However, several traders said there was a noted absence of panic selling, and volumes weren't unusually heavy given the size of the move. Magnifying the day's slide, they said, was some end-of-year jockeying by investors, who often sell losing bets toward the end of the year as a way to reduce tax bills, putting pressure on hard-hit corners of the market--in this case energy stocks. "Energy and crude is what's driving the boat," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. "You get this sort of 'sell everything' mentality." Despite Wednesday's slide, major indexes remain close to record territory. The Dow is just 2.4% off its record high hit on Friday. Other markets also saw large moves Wednesday. The yield on the 10-year Treasury note fell to a two-month low of 2.169% as investors fled to safe-haven government bonds. The U.S. dollar fell 1.2% versus the yen. Much of the day's focus, however, surrounded the sharp drop in energy stocks. Chevron Corp. shares fell 2% and Exxon Mobil Corp. shares lost 3%. ConocoPhillips lost 2.2%. BP PLC said it expects to book $1 billion in restructuring charges over the next year. U.S.-listed shares of BP fell 2%. Even harder hit were shares of small oil-and-gas producers, many of which took on heavy debt loads that are coming under scrutiny amid lower oil prices. Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out amid the drop in oil prices. Among small producers posting big declines were Triangle Petroleum Corp., which fell 8.6%, Comstock Resources Inc., off 10.8%, and Goodrich Petroleum Corp. , down 8.8%. The pullback in stocks this week comes after seven straight weeks of gains for the Dow and S&P. "The energy stocks themselves, as well as other names that were linked to energy, were all lower," said Jesse Lubarsky, senior vice president and equity trader at Raymond James. Many investors have said the drop in oil prices should benefit stocks in the long run, as falling gasoline prices boosts consumer spending. While a decline in oil prices is a drag on earnings for energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management. "Overall...the benefits of lower oil prices will come through and that will offset the problems at energy companies," he said. He said he is looking to increase his exposure to the energy sector because he doesn't believe this pullback in oil prices is permanent. As U.S. stocks enter the sixth year of the bull market, many investors have said the continued economic recovery and growth in corporate profit can propel stocks higher. Even as the Federal Reserve begins to raise short-term interest rates, its actions could be offset by easing efforts at other major central banks. That should help keep global interest rates low, adding to the appeal of stocks against other assets. "The fact that we are in the middle of an expanding economy with growing profits and low interest rates ought to be enough to keep us going," said Steven Wieting, global chief investment strategist at Citi Private Bank, referring to further gains in U.S. stocks. No major economic reports were scheduled for release Wednesday. Later in the week, investors will watch for November data on retail sales and producer prices. The Federal Reserve's policy statement, due at the end of its two-day meeting on Dec. 17, is also likely to attract attention. In overseas action, Greek stocks continued to fall amid political uncertainty in the country. Earlier this week, the Greek government sped up the timeline for a key vote in parliament. The Stoxx Europe 600 fell 0.3%. Stock-market action was mixed in Asia. China's Shanghai Composite Index rose 2.9%, while Japan's Nikkei Stock Average fell 2.25%. Gold futures fell 0.2% to $1228.90 an ounce. Write to Dan Strumpf at and Saumya Vaishampayan at Credit: By Dan Strumpf and Saumya Vaishampayan
Subject: Petroleum industry; Energy industry; Interest rates; Stock exchanges; Prices; Dow Jones averages
Location: United States--US
People: Wieting, Steven
Company / organization: Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Comstock Resources Inc; NAICS: 211111; Name: Triangle Petroleum Corp; NAICS: 211112; Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634745963
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634745963?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Peak of 'Peak Oil' Has Been Postponed Yet Again; fuel supply will always satisfy demand at a price and that technology and entrepreneurship will be stimulated to add to supply the higher the price.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years.
Full text: History will certainly repeat itself, again. The editorial (Dec. 5) is spot on in predicting that fuel supply will always satisfy demand at a price, and that technology and entrepreneurship will be stimulated to add to supply the higher the price. But three other important historical patterns also will be repeated in oil markets. Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years. It is not surprising that 47% of last month's domestic auto sales were SUVs and light trucks--the same demand response that occurred after oil prices collapsed in 1986. Oil drillers will only maintain idle rigs for a limited time before they are sold for scrap. Worse, if oil prices eviscerate the demand for drilling new wells, drillers will dismiss skilled workers as required by market forces. We saw that after the OPEC-engineered oil-price collapse in 1997-98 crushed the domestic drilling industry, and drilling was later slow to rebound in response to higher prices. Saudi Arabia, the world's lowest-cost producer, will never play a classic role and increase production as long as marginal output is profitable. Letting free markets work will always provide the optimal mix of supply and demand. However, it is foolhardy to believe that we are operating in a free market for oil when the low-cost producer, accounting for 10% of the world's production, doesn't react to price signals. Pretending otherwise is to condemn us to the same historic roller-coaster ride during which our domestic production surges and is then crushed, followed by price spikes that precipitate recessions. John Shages Strategic Petroleum Consulting LLC Washington Mr. Shages was a deputy assistant secretary, petroleum reserves, at the Department of Energy 2003-07. Standing atop the pyramid of finite-resource alarmists and exploiters are those who can convert insecurities about raw materials into raw political power. As America's fracking revolution once again debunks end-of-oil myths, many in the political class will push the same green-energy agenda forward as a response to the planet's limited supply of clean air and water. Even though fossil-fuel suppliers refuse to comply with predictions of doomsayers, anticarbon forces will try to finish their oil exorcism based on oil's threat to other scarce resources. Better yet, the same rationale can be used by those who wish to consolidate and ratchet up collective nation-state power into global governance bodies. The ingenuity of entrepreneurs can slow the concentration and centralization of state power, but public-sector resource protectors and allocators are every bit as enduring and slick as fossil fuels. John Finley Hampton, Va. Peak oil hasn't been debunked as you claim. Conventional oil is gone forever. We're finding more natural gas but less and less oil world-wide. The supermajors like BP, Total and Shell prove how difficult it is by posting deplorable reserve replacement rates. Even giant Exxon can't avoid oil's decline. Its 2013-14, production was nearly 50% natural gas. Exxon's upstream production declined from 4.21 million barrels of oil equivalent per day in 2004 to 4.17 in 2013. We might listen again to James Schlesinger, our first energy secretary's warning: "Society ignoring this [peak oil] is like the people of Pompeii ignoring the rumblings below Vesuvius." Ronald Ferland Bluffton, S.C. You are correct in that no one can predict with any accuracy when the world will run out of oil. Current extraction processes are hardly efficient, so that two or three barrels remain in the ground for every barrel that has been pumped out in the last 130 years. Methods will be developed that can extract that oil, as well as the billions of barrels that are yet to be discovered. Nevertheless, the supply of oil is not infinite and eventually it will all be gone, be it hundreds, thousands or tens of thousands of years. Martin Jacobson Lincoln, Calif.
Subject: Supply & demand; Petroleum industry; Energy policy; Gasoline prices
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634833238
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634833238?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
How Cheaper Oil Affects U.S. Factories; Winners Are Consuming Energy and Losers Are Those Supplying Drill Firms
Author: Aeppel, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Dec 2014: n/a.
Abstract:
[...]energy development has been a hot spot in the post-recession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. "The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month.
Full text: Cheaper oil is creating winners and losers among America's factories. Manufacturers who use oil and products derived from it are saving big money. But energy development has been a hot spot in the post-recession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. Those companies are now being squeezed. Among those feeling the pinch is Dover Corp., which earns a quarter of its revenue from selling pumps and other heavy equipment to energy companies. "Clearly there are near-term challenges in front of us," Chief Executive Bob Livingston told investors in New York on Monday. Dover said it hasn't yet seen a pullback in oil drilling, but the company is cutting costs and re-evaluating some investments in anticipation of reduced oil exploration in the U.S. next year. General Electric Co. in October cut projections for future growth in its oil and gas business, adding it was monitoring the sector with "caution." Rockwell Automation Inc. also is weighing what cheaper oil means for its bottom line. The industrial equipment maker counts on the oil and gas industry for about 12% of its sales. CEO Keith Nosbusch said there is a "teeter-totter" taking place across the economy as businesses that benefit from cheaper oil prepare for more sales, while others move to retrench. "Everyone who uses oil as a feed stock--from chemicals to consumer industries--are going to benefit," he said. That could mean more sales of Rockwell's industrial controls, motors and sensors to those industries. Meanwhile, oil drillers won't stop investments entirely, he said, and are likely to spend more on productivity-enhancing equipment. Rockwell, for instance, sells devices that let drillers monitor the output from wells without sending workers around in pickups to record measurements at each drilling site, shaving labor costs. U.S. manufacturing has been a bright spot in the recovery, though it is far from booming. Manufacturing output grew 3.4% over the past year and finally recovered this past summer to its prerecession level, according to the Federal Reserve. How falling oil prices impact manufacturers will depend on how low crude goes and how long it stays there. Oil continued its slide Wednesday after the Organization of the Petroleum Exporting Countries cut forecasts for global demand for its oil next year. The benchmark U.S. oil price on Wednesday fell to $60.94 a barrel, the lowest level since July 2009 on the New York Mercantile Exchange. If prices fall much further and stay down, it will mean sharp cuts in investments that reverberate through the manufacturing supply chain. ConocoPhillips became the first oil major to announce such a move, earlier this week saying it would cut its capital spending to $13.5 billion next year, down 20% from this year's level. Still, the larger picture for manufacturers remains positive. "The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month. "I don't think it's a coincidence that we're getting sharp increases in [auto] sales at a time of sharp decreases in gas prices," said Mr. North. Goodyear Tire & Rubber Co. supplies tires to companies that do oil exploration and acknowledges its sales to those companies may decline in the months ahead. But that is far outweighed by the benefits Goodyear gets from cheaper oil, said spokesman Keith Price. Two-thirds of the company's raw materials are derived from petroleum, including synthetic rubber and carbon black. The company reported its raw material costs fell 6% year-over-year in the third quarter, though part of that reflects cheaper natural rubber. It takes time for lower oil prices to filter through to its suppliers, which is why Goodyear predicts its raw material bill will keep falling through the first half of next year. "But what really helps us," said Mr. Price, "is that as gas prices fall, people tend to drive more--so their tires wear out faster." Don Norman, director of economic studies at the MAPI Foundation, a manufacturing research group in Arlington, Va., agrees cheaper oil benefits most manufacturers. "Overall it's a positive," he said. "Manufacturers benefit because of lower prices, including lower shipping costs. And consumers spending less on gas and heating oil means they'll be out shopping." The farther a business is removed from the actual production of oil, the more clear the benefits. At Northland Aluminum Products Inc. in Minneapolis, for instance, orders for its trademark bunt pans and other baking gear surged in late September and CEO David Dalquist thinks falling oil prices are to thank. With prices falling at the gas pump, Mr. Dalquist said retailers suddenly boosted orders for the holiday season. Business has now surged 15% above his projections made this summer. "We see a one-to-one relation between discretionary income and the price of gasoline," he said. Northland hasn't seen any declines in raw material prices, but Mr. Dalquist said he expects that eventually. Ted Mann contributed to this article. Write to Timothy Aeppel at Credit: By Timothy Aeppel
Subject: Manufacturing; Petroleum industry; Industrial equipment; Prices; Investments; Capital expenditures; Recessions; Manufacturers; Energy industry; Raw materials; Steel pipes
Location: United States--US
People: Nosbusch, Keith D
Company / organization: Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: New York Mercantile Exchange; NAICS: 523210; Name: Rockwell Automation Inc; NAICS: 334419, 334513, 335314, 334111, 334112; Name: Dover Corp; NAICS: 334513, 332919, 333921, 333318, 333517
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 10, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634873787
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634873787?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Miners Find Little Solace in Cheaper Oil; Pressed by Falling Gold Prices to Cut Costs, Some Are Getting Creative
Author: MacDonald, Alistair
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Falling oil prices have made it cheaper to mine gold, but the yellow metal's own three-year price decline is pressuring miners to come up with new, sometimes creative ways to cut costs and restructure. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed.
Full text: Falling oil prices have made it cheaper to mine gold, but the yellow metal's own three-year price decline is pressuring miners to come up with new, sometimes creative ways to cut costs and restructure. Among other things, miners are drawing up plans to spin off assets and share administrative functions between companies. As measured by the Market Vectors Gold Miners Index, the gold sector has rallied almost 19% since Nov. 4, buoyed by a 7% gain in gold and by cost reductions stemming from falling oil and a rising dollar. But analysts and investors say the biggest savings have already been reaped, and that to keep stock prices rising miners need to do the one thing they are not doing: merge with each other. Gold prices are still down 37% from their 2011 highs, mainly as inflation, against which gold is traditionally a hedge, has remained low and investors have moved into securities that offer yields. That decline has spurred a yearslong scramble to cut costs. Miners have shaved an average of 20% off the cost of producing an ounce of gold in the past year, according to Dundee Capital Markets. That is mainly due to cuts in capital expenditure. But with gold prices nearing break-even levels for many miners, some are seeking new solutions in a sector already reshaped by a three-year downturn. "The low-hanging fruit, on the cost side, has been picked," said Pawel Rajszel, an analyst at Veritas Investment Research. Mr. Rajszel said that in recent earnings reports, growth in savings has slowed. Energy Intensive Gold mining is an energy-intensive industry, which is why HSBC Securities calculates that a 20% fall in oil could reduce miners' overall costs by 2% to 6%. But not all miners will feel the full benefits. Around half of Barrick Gold Corp.'s exposure to oil is hedged at $86 a barrel. Some mine mainly underground, which uses less fuel than open-pit mining, where trucks ferry the rock around. Analysts also point out a flip side to declining oil: It damps the inflation that boosts gold. Another macroeconomic benefit has been the rising dollar, which lowers costs in countries where miners operate. Yamana Gold Inc.--which mines in Canada, Brazil, Argentina and Chile--says that for every 10% devaluation in these countries' currencies, its mining costs fall by $40 to $50 an ounce. Yamana's costs averaged $807 an ounce in the third quarter. "The dollar and oil, it's a nice win," said Steve Letwin, chief executive of Iamgold Corp. "But you have to continue to make sustainable cost cuts, given how volatile gold and oil are." Given this, miners are looking at other ways to cope with a lower gold price. Some miners are considering spinoffs. Yamana announced on Wednesday that it would place some of its Brazilian assets into a new company that could be spun off to its investors. Yamana sees this as a way to separate higher-risk assets from the rest of its portfolio while allowing investors the option of still owning them. Underscoring potential difficulties, the world's largest gold producer, Barrick, considered spinning off some of its mines but is currently not pursuing this option, say people familiar with the matter. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed. One problem cited was the difficulty of deciding how much Barrick debt the new company would take on, one of these people said. Some bankers say companies are increasingly discussing forming joint ventures to share costs--such as power generation, geologists and regional offices--for mines that operate near each other. But recent precedent isn't good. Barrick and Newmont looked at this in Nevada, but talks have so far gone nowhere. Sharing operations without combining companies is difficult. "Each company is going to have its own interest at heart," said Patrick Chidley, a mining analyst at HSBC Securities. Some miners are looking at a limited form of such sharing, hoping to combine administrative functions where there is geographic overlap, rather than actual mining operations. Mr. Letwin said Iamgold has had very preliminary discussions with Newmont about sharing community- and government-relations functions, as well as some legal work in Suriname. Such savings might not be significant enough, say analysts. Instead, they say, investors want to see more aggressive moves, such as full-scale mergers and shutting down unprofitable mines. High Expectations The long-expected consolidation in gold has yet to materialize. While the values of gold miners have fallen, the expectations of their owners have not. Kirkland Lake Gold Inc. operates in an area of Ontario that has more than a dozen peer miners, many of which have just one asset but corporate offices and teams, said George Ogilvie, the company's CEO. Few are looking to merge, he said. "Sometimes it takes a little bit of time to sink in past a mentality of 'it is my company, maybe we can manage this,' " he said. If gold prices fall further, consolidation will become inevitable, Mr. Ogilvie and others say. "With gold at $1,100 it becomes miserable for some miners, and consolidation is inevitable," said Doug B. Groh, a fund manager at Tocqueville Asset Management LP, which owns gold stocks. "This is the point of no return." Ben Dummett contributed to this article. Write to Alistair MacDonald at Credit: By Alistair MacDonald
Subject: Gold mines & mining; Gold markets; Mines; Prices; Investments; Capital expenditures; Cost control; Cost reduction
Company / organization: Name: Iamgold Corp; NAICS: 212221; Name: Barrick Gold Corp; NAICS: 212221
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634881360
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634881360?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Investors Sell Stocks as Oil Prices Keep Falling; Dow Slumps 268.05 Points, Its Biggest One-Day Drop in Two Months
Author: Friedman, Nicole; Strumpf, Dan; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Skittish investors, wary about the health of the world economy, pushed the Dow industrials to their largest decline in two months, propelled in part by reports of a deepening global oil glut that sent crude prices to five-year lows. The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels.
Full text: Skittish investors, wary about the health of the world economy, pushed the Dow industrials to their largest decline in two months, propelled in part by reports of a deepening global oil glut that sent crude prices to five-year lows. The benchmark U.S. oil price slid 4.5% on the New York Mercantile Exchange, to $60.94 a barrel, bringing year-to-date losses to 38%. The declines delivered the latest blow to an oil industry that just months ago was thought to be booming, as many analysts and observers predicted that crude prices would remain near $100 a barrel. Other markets also saw large moves Wednesday, as investors bought government bonds perceived as safe, unwound bullish bets on the U.S. dollar, and sold riskier assets such as high-yield corporate, or "junk," bonds. The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels. U.S. stocks are trading above their historical average valuations, many investors said, and the Dow industrials haven't had a 10% decline, known as a correction, for more than three years. Despite Wednesday's slide, major indexes remain close to record territory. The Dow is just 2.4% off its record hit on Friday and is up 5.8% for the year. The steady gains in stocks amid mostly uneven U.S. growth has made some portfolio managers nervous that at least a temporary reversal could be in the offing. "There's some global unease that has people wanting to take money off the table," said Jesse Lubarsky, senior vice president and equities trader at Raymond James. "We've had this nice rally for a while, but there are still worries." New data on Wednesday out of the U.S., the world's biggest oil consumer, showed an unexpected increase in crude supplies last week. Meanwhile, the latest projections from the Organization of the Petroleum Exporting Countries point to lower demand for the cartel's oil in 2015. The Dow Jones Industrial Average slumped to its biggest one-day point and percentage decline since Oct. 9, dropping 268.05 points, or 1.5%, to 17533.15. The S&P 500 index fell 33.68 points, or 1.6%, to 2026.14. Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. Shares in Exxon Mobil Corp. lost 3%, ConocoPhillips slid 2.2% and Chevron Corp. dropped 2%. Among small producers, Comstock Resources Inc. tumbled 11%, Goodrich Petroleum Corp. slipped 8.8% and Triangle Petroleum Corp. fell 8.6%. Shares of materials, industrials and technology companies also tumbled. All 10 major market sectors declined. To be sure, there is good news for the world economy in falling energy prices. Declining fuel costs stand to put more money in household coffers and boost consumer spending in a shift that economists expect will bolster growth in the world's largest economies. But concerns about the global growth outlook and fears of deflation, a damaging spiral of falling prices and slowing spending, in some regions such as Japan and Europe continue to compete with the crude drop for investors' attention. The dollar, usually considered a safe haven, has fallen against the yen and the euro since Friday, including a 1.6% drop against the Japanese currency on Wednesday. Investors appear to be taking advantage of periods of uncertainty to take profits on dollar bets that have appreciated substantially this year. The 10-year Treasury note rallied, sending its yield to near a two-month low of 2.169%. Driving the shifts: concerns that the drop in oil prices would weigh on already-low inflation in Europe and Asia. A number of big banks, including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, have lowered their forecasts in recent months as prices have fallen well below expectations. In mid-June, when prices started falling, most market watchers thought that geopolitics posed a danger to oil supplies, as insurgents had recently entered Iraq and Libyan exports were uncertain due to unrest. Since then, production from both Iraq and Libya has increased, surprising many and augmenting the output of oil coming from the U.S., which is at its highest level since 1986. Some observers expected OPEC to announce a production cut right up until the group's Nov. 27 meeting. The cartel decided to maintain output levels. Some saw the inaction as a new era for the oil market in which the cartel has less power, while others said the group is likely to reassert its strength by announcing a production cut early in 2015. Wednesday was the biggest one-day drop in the oil price since Nov. 28, the session that followed OPEC's decision to maintain its oil-output target. OPEC's agreement to stand pat was the latest catalyst for a selloff that began in June. Last week, Credit Suisse Group AG called for Brent crude, the global oil benchmark, to average $75.25 and Nymex oil to average $70 in 2015, down from its earlier forecasts of $91.50 and $84.50, respectively. Brent crude finished Wednesday at $64.24 a barrel, down 3.9% on the day. "What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse. "There's no indication that [the market is] getting any less weak." Mr. Stuart said he believes oil prices will bottom out in the first quarter. After that, he expects reduced investment will lead to slower production growth at the same time demand strengthens. James Ramage contributed to this article. Write to Nicole Friedman at, Dan Strumpf at and Summer Said at Credit: By Nicole Friedman, Dan Strumpf and Summer Said
Subject: Petroleum industry; Prices; Investments; Dow Jones averages
Location: United States--US
Company / organization: Name: Triangle Petroleum Corp; NAICS: 211112; Name: Goodrich Petroleum Corp; NAICS: 211111; Name: Comstock Resources Inc; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634884870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634884870?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Australia's Santos Trims Spending as Oil Slips; Australia's Third-Largest Oil Company by Output Plans to Spend $1.66 Billion on New Ventures in 2015
Author: Ross, Kelly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
The Adelaide-based company is completing construction of an US$18.5 billion gas-export joint venture with Total SA in Australia's Queensland state--a giant project that investors fear will put too much strain on its balance sheet in a low-oil-price environment.
Full text: SYDNEY--Australia's Santos Ltd. said it would slash capital spending by 26% next year and consider asset sales, as it tries to fortify its balance sheet against tumbling oil prices. Australia's third-largest oil company by output said it plans to spend 2.0 billion Australian dollars (US$1.66 billion) on new ventures in 2015, down from previous guidance for A$2.7 billion. While asset sales are also under consideration, the company said it has a "robust funding position". Credit Suisse this week called on Santos to issue new shares in the company at a discount to raise at least A$2.5 billion in equity. On Thursday, Santos said it has no such plans. "The company has no present need or intention to raise equity," David Knox, Santos's chief executive, said in a statement. Among Australia's large-cap oil companies, Santos has been the hardest hit by . The Adelaide-based company is completing construction of an US$18.5 billion gas-export joint venture with Total SA in Australia's Queensland state--a giant project that investors fear will put too much strain on its balance sheet in a low-oil-price environment. Santos shares fell another 5.7% on Thursday amid a continued slide in oil prices, extending their losses to 38% since the Organization of the Petroleum Exporting Countries last month sent turmoil through global markets by . Meanwhile, Origin Energy Ltd., which is building a rival gas-export plant in Queensland with ConocoPhillips, said Thursday it has renegotiated its loan facility for the project. The loan has been increased by A$750 million to A$7.4 billion, Origin said, adding that its maturity has been extended and the cost of interest reduced. The economics of the project remain "robust" in the current oil-price environment, Origin said. Write to Ross Kelly at Credit: By Ross Kelly
Subject: Petroleum industry; Balance sheets
Location: Australia United States--US Queensland Australia
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Origin Energy Ltd; NAICS: 221210; Name: Credit Suisse Group; NAICS: 522110; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634884915
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/163 4884915?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Fall Puts a Chill on U.S. Drilling; Energy Firms Slash Spending, Staff as Crude's Decline Accelerates
Author: Cook, Lynn; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Energy companies' hedging strategies run the gamut from Continental Resources, which cancelled nearly all its price hedges and projected oil prices would soon rise, to Pioneer Natural Resources Co. of Irving, Texas, which has hedged 85% of its oil and gas output for 2015.
Full text: U.S. energy companies are starting to cut drilling, lay off workers and slash spending in the face of an accelerating decline in oil prices, which fell to a fresh five-year low Wednesday. The number of rigs drilling for oil in North Dakota and parts of Texas has started to edge down, new drilling permits have dropped sharply since October, and many companies say they are going to focus on their most profitable wells. EOG Resources Inc. this week said it would shed many of its Canadian oil and gas fields, close its Calgary office and lay off employees there as it refocuses in the U.S. Matador Resources Co. of Dallas is contemplating temporarily leaving the prolific Eagle Ford Shale area in South Texas in favor of drilling elsewhere in Texas and New Mexico where it can make more money. Investors sold off shares of energy companies including EOG as the U.S. benchmark oil price fell to $60.94 on Wednesday. EOG lost nearly 3% to $86.79 while shale specialists Continental Resources Inc. and Chesapeake Energy Corp. both declined about 7%. Many of these U.S. independent drillers have lost half their value since June. Shares of global energy giants have fared better than the independent U.S. companies because their refining operations are benefiting from cheaper oil. But some of the biggest are disclosing cutbacks. BP PLC, which has been cutting back since the Deepwater Horizon oil spill in 2010, outlined a further $1 billion restructuring on Wednesday. ConocoPhillips, one of the biggest shale producers in the U.S., recently said it would spend 20% less next year on drilling wells, honing in on its sweetest spots instead of drilling its more expensive areas like Colorado's Niobrara. "At this point a contraction is unavoidable," said Karr Ingham, economist for the Texas Alliance of Energy Producers. One reason for the stock declines is investors are skeptical: Whatever their plans, U.S. companies produced 9.1 million barrels a day last week, the highest level since 1983, according to federal data. There is so much oil sloshing around the U.S. that refiners can't use it all, so 1.5 million barrels of crude went into U.S. oil stockpiles last week. Some companies will be able to keep pumping even at lower prices, depending on the location and quality of their wells. Enterprise Products Partners LP, which operates pipelines and oil storage terminals across the U.S., said its analysis shows that the average well in many shale formations aren't profitable at $60 oil. But wells considered high grade can withstand much lower prices. For instance, some wells in South Texas are profitable at prices of $30 a barrel, while the best in North Dakota's Bakken area can only withstand a drop to under $50 a barrel. Energy companies' hedging strategies run the gamut from Continental Resources, which cancelled nearly all its price hedges and projected oil prices would soon rise, to Pioneer Natural Resources Co. of Irving, Texas, which has hedged 85% of its oil and gas output for 2015. Companies that hedged their production aren't as exposed to falling prices and may not have to pump less or curb spending as quickly. Surging American oil output has helped create a global glut of oil that has sent prices spiraling downward. The benchmark U.S. oil price, which briefly rose above $107 a barrel in late June, closed below $61 a barrel Wednesday, down 43% since its summer high. Drilling permits issued in the U.S. dropped 36% between October and November, according to data from Drillinginfo, but remain 13% above their year earlier level. Another sign of the energy industry's pullback: the number of rigs drilling for oil in the Eagle Ford Shale in Texas has started to drop. Drilling in the nation's second most active oil region hit a peak of 210 rigs in July but recently fell to 190 rigs. These declines don't necessarily mean that U.S. oil output will fall, said Greg Haas, a director at research firm Stratas Advisors in Houston, because companies are getting more efficient at drilling. "It used to be if the rig count dropped then oil production dropped, but not anymore," he said. In a sense, energy companies are a victim of their own success. EOG, Chesapeake and others learned to drill and frack wells faster and wring more from each well. Chesapeake says its initial production at new wells in the Eagle Ford improved by 65% over the last five years. Houston-based EOG took 22 days to drill a well in South Texas in 2011; today it takes less than nine days. The company recently said it can earn a 10% profit after taxes even if oil prices were to fall to $40 a barrel. However, companies with a lot of debt, low rates of return and little chance of drilling their way to better profitability will be hurt if crude remains below $75 a barrel, according to analysts at Global Hunter Securities. Among the companies they cited was Triangle Petroleum Corp. Jon Samuels, president of the Denver-based independent explorer, said his company is profitable at the current price of oil. Triangle's shares are down 47% in the last two months. It is pushing vendors for cheaper prices for drilling equipment and contract labor in the new year, which should help bring down costs, he said. "You're going to see activity levels and spending go down substantially compared to this year," Mr. Samuels said, adding that the stock market reaction to crude's price drop has been overblown. Write to Lynn Cook at and Erin Ailworth at Credit: By Lynn Cook and Erin Ailworth
Subject: Petroleum industry; Energy industry; Investments; Crude oil prices; Petroleum production
Location: United States--US Texas North Dakota
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Enterprise Products Partners LP; NAICS: 486990, 211112; Name: Texas Alliance of Energy Producers; NAICS: 813910; Name: Chesapeake Energy Corp; NAICS: 211111; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634884919
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634884919?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wi thout permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Shares Rattled by Oil's Tumble; Shares Fall After Crude Plunges to Fresh Five-Year Low
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
[...]with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely to be a hike than a cut, but probably not until the second half of next year," it said.
Full text: Stocks fell across Asia Thursday, as a rippled through the region and pressured Chinese state-owned energy companies and major oil producers in Australia in particular. The Hang Seng Index shed 0.9% to 23312.54, pulled down by a gauge of Chinese firms. The Hang Seng China Enterprises Index was down 1.0% to 11255.43. Among energy stocks that suffered the largest declines, Kunlun Energy Co. Ltd., fell 3.5%, and Cnooc Ltd., was off 1.5%. In Australia, the same sector was led lower by Santos Ltd., the country's third-largest oil company. The stock fell 8.8% after the firm next year and consider asset sales, as it tries to fortify its balance sheet against tumbling oil prices. Among Australia's large-cap oil companies, it has been the hardest hit by crude oil's plunge. The broader S&P ASX benchmark fell 0.5% to 5231.00. The losses stemmed from a 4.5% fall in benchmark U.S. crude overnight to $60.94 a barrel, and the biggest one-day drop since Nov. 28, the session that followed the Organization of the Petroleum Exporting Countries' . Prices were last at $61.10 a barrel. In Hong Kong, the few gainers included Cathay Pacific Airways Ltd., whose stock was up 2.0%. Korea's Kospi fell the most in the region, down 1.5% to 1916.59, after the Bank of Korea held steady on interest rates at 2.0%. Capital Economics said that rising levels of household debt suggested further rate cuts are unlikely. "In fact, with GDP growth set to accelerate in the coming months, we think the next move in rates is more likely to be a hike than a cut, but probably not until the second half of next year," it said. The Shanghai Composite Index fell 0.5% to 2925.75, although trading was less volatile than recent sessions. The index plunged 5.4% on Tuesday and jumped 2.9% Wednesday. In Japan, a weaker dollar hurt the Nikkei Stock Average, which ended down 0.9% at 17257.40, marking a third straight losing session. As of the close of Tokyo trading, the greenback changed hands at Y118.16, more than one yen lower than the previous day. The 6.4% fall in Japanese core machinery orders in October--the first in five months--wasn't cited by market participants as a trading factor, even though it bodes ill for a domestic economy struggling to recover its momentum after an April sales tax increase. Gregor Stuart Hunter and Bradford Frischkorn contributed to this article Write to Chao Deng at Credit: By Chao Deng
Subject: Petroleum industry; Statistical data; Energy industry
Location: China Asia Australia
Company / organization: Name: Cathay Pacific Airways Ltd; NAICS: 481111; Name: Bank of Korea; NAICS: 521110; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634891621
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634891621?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Peak of 'Peak Oil' Has Been Postponed Yet Again
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: A.16.
Abstract:
Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years.
Full text: History will certainly repeat itself, again. The editorial "'Peak Oil' Debunked, Again" (Dec. 5) is spot on in predicting that fuel supply will always satisfy demand at a price, and that technology and entrepreneurship will be stimulated to add to supply the higher the price. But three other important historical patterns also will be repeated in oil markets. Auto shoppers have a short-term perspective and will respond to lower gasoline prices today by bulking up, and the U.S. will lock in future demand for gasoline in the form of vehicles with an average life expectancy of 16 years. It is not surprising that 47% of last month's domestic auto sales were SUVs and light trucks -- the same demand response that occurred after oil prices collapsed in 1986. Oil drillers will only maintain idle rigs for a limited time before they are sold for scrap. Worse, if oil prices eviscerate the demand for drilling new wells, drillers will dismiss skilled workers as required by market forces. We saw that after the OPEC-engineered oil-price collapse in 1997-98 crushed the domestic drilling industry, and drilling was later slow to rebound in response to higher prices. Saudi Arabia, the world's lowest-cost producer, will never play a classic role and increase production as long as marginal output is profitable. Letting free markets work will always provide the optimal mix of supply and demand. However, it is foolhardy to believe that we are operating in a free market for oil when the low-cost producer, accounting for 10% of the world's production, doesn't react to price signals. Pretending otherwise is to condemn us to the same historic roller-coaster ride during which our domestic production surges and is then crushed, followed by price spikes that precipitate recessions. John Shages Strategic Petroleum Consulting LLC Washington Mr. Shages was a deputy assistant secretary, petroleum reserves, at the Department of Energy 2003-07. --- Standing atop the pyramid of finite-resource alarmists and exploiters are those who can convert insecurities about raw materials into raw political power. As America's fracking revolution once again debunks end-of-oil myths, many in the political class will push the same green-energy agenda forward as a response to the planet's limited supply of clean air and water. Even though fossil-fuel suppliers refuse to comply with predictions of doomsayers, anticarbon forces will try to finish their oil exorcism based on oil's threat to other scarce resources. Better yet, the same rationale can be used by those who wish to consolidate and ratchet up collective nation-state power into global governance bodies. The ingenuity of entrepreneurs can slow the concentration and centralization of state power, but public-sector resource protectors and allocators are every bit as enduring and slick as fossil fuels. John Finley Hampton, Va. --- Peak oil hasn't been debunked as you claim. Conventional oil is gone forever. We're finding more natural gas but less and less oil world-wide. The supermajors like BP, Total and Shell prove how difficult it is by posting deplorable reserve replacement rates. Even giant Exxon can't avoid oil's decline. Its 2013-14, production was nearly 50% natural gas. Exxon's upstream production declined from 4.21 million barrels of oil equivalent per day in 2004 to 4.17 in 2013. We might listen again to James Schlesinger, our first energy secretary's warning: "Society ignoring this [peak oil] is like the people of Pompeii ignoring the rumblings below Vesuvius." Ronald Ferland Bluffton, S.C. --- You are correct in that no one can predict with any accuracy when the world will run out of oil. Current extraction processes are hardly efficient, so that two or three barrels remain in the ground for every barrel that has been pumped out in the last 130 years. Methods will be developed that can extract that oil, as well as the billions of barrels that are yet to be discovered. Nevertheless, the supply of oil is not infinite and eventually it will all be gone, be it hundreds, thousands or tens of thousands of years. Martin Jacobson Lincoln, Calif.
Subject: Supply & demand; Petroleum industry; Energy policy; Gasoline prices
Location: United States--US
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2014
Publication date: Dec 11, 2014
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634925575
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634925575?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
For Gold Miners, Cheaper Oil Is Scant Solace --- Pressed by Falling Metal Prices to Cut Costs, They're Considering Spinoffs and the Sharing of Administrative Functions
Author: MacDonald, Alistair
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.8.
Abstract:
Falling oil prices have made it cheaper to mine gold, but the yellow metal's own three-year price decline is pressuring miners to come up with new, sometimes creative ways to cut costs and restructure. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed.
Full text: Falling oil prices have made it cheaper to mine gold, but the yellow metal's own three-year price decline is pressuring miners to come up with new, sometimes creative ways to cut costs and restructure. Among other things, miners are drawing up plans to spin off assets and share administrative functions between companies. As measured by the Market Vectors Gold Miners Index, the gold sector has rallied almost 19% since Nov. 4, buoyed by a 7% gain in gold and by cost reductions stemming from falling oil and a rising dollar. But analysts and investors say the biggest savings have already been reaped, and that to keep stock prices rising miners need to do the one thing they are not doing: merge with each other. Gold prices are still down 37% from their 2011 highs, mainly as inflation, against which gold is traditionally a hedge, has remained low and investors have moved into securities that offer yields. That decline has spurred a yearslong scramble to cut costs. Miners have shaved an average of 20% off the cost of producing an ounce of gold in the past year, according to Dundee Capital Markets. That is mainly due to cuts in capital expenditure. But with gold prices nearing break-even levels for many miners, some are seeking new solutions in a sector already reshaped by a three-year downturn. "The low-hanging fruit, on the cost side, has been picked," said Pawel Rajszel, an analyst at Veritas Investment Research. Mr. Rajszel said that in recent earnings reports, growth in savings has slowed. Gold mining is an energy-intensive industry, which is why HSBC Securities calculates that a 20% fall in oil could reduce miners' overall costs by 2% to 6%. But not all miners will feel the full benefits. Around half of Barrick Gold Corp.'s exposure to oil is hedged at $86 a barrel. Some mine mainly underground, which uses less fuel than open-pit mining, where trucks ferry the rock around. Analysts also point out a flip side to declining oil: It damps the inflation that boosts gold. Another macroeconomic benefit has been the rising dollar, which lowers costs in countries where miners operate. Yamana Gold Inc. -- which mines in Canada, Brazil, Argentina and Chile -- says that for every 10% devaluation in these countries' currencies, its mining costs fall by $40 to $50 an ounce. Yamana's costs averaged $807 an ounce in the third quarter. "The dollar and oil, it's a nice win," said Steve Letwin, chief executive of Iamgold Corp. "But you have to continue to make sustainable cost cuts, given how volatile gold and oil are." Given this, miners are looking at other ways to cope with a lower gold price. Some miners are considering spinoffs. Yamana announced on Wednesday that it would place some of its Brazilian assets into a new company that could be spun off to its investors. Yamana sees this as a way to separate higher-risk assets from the rest of its portfolio while allowing investors the option of still owning them. Underscoring potential difficulties, the world's largest gold producer, Barrick, considered spinning off some of its mines but is currently not pursuing this option, say people familiar with the matter. Barrick's failed merger attempt with Newmont Mining Corp. in April envisaged a spinoff, and executives continued to look at the idea after talks collapsed. One problem cited was the difficulty of deciding how much Barrick debt the new company would take on, one of these people said. Some bankers say companies are increasingly discussing forming joint ventures to share costs -- such as power generation, geologists and regional offices -- for mines that operate near each other. But recent precedent isn't good. Barrick and Newmont looked at this in Nevada, but talks have so far gone nowhere. Sharing operations without combining companies is difficult. "Each company is going to have its own interest at heart," said Patrick Chidley, a mining analyst at HSBC Securities. Some miners are looking at a limited form of such sharing, hoping to combine administrative functions where there is geographic overlap, rather than actual mining operations. Mr. Letwin said Iamgold has had very preliminary discussions with Newmont about sharing community- and government-relations functions, as well as some legal work in Suriname. Such savings might not be significant enough, say analysts. Instead, they say, investors want to see more aggressive moves, such as full-scale mergers and shutting down unprofitable mines. The long-expected consolidation in gold has yet to materialize. While the values of gold miners have fallen, the expectations of their owners have not. Kirkland Lake Gold Inc. operates in an area of Ontario that has more than a dozen peer miners, many of which have just one asset but corporate offices and teams, said George Ogilvie, the company's CEO. Few are looking to merge, he said. "Sometimes it takes a little bit of time to sink in past a mentality of 'it is my company, maybe we can manage this,' " he said. If gold prices fall further, consolidation will become inevitable, Mr. Ogilvie and others say. "With gold at $1,100 it becomes miserable for some miners, and consolidation is inevitable," said Doug B. Groh, a fund manager at Tocqueville Asset Management LP, which owns gold stocks. "This is the point of no return." --- Ben Dummett contributed to this article. Credit: By Alistair MacDonald
Subject: Gold markets; Commodity prices; Capital expenditures; Cost control; Gold mines & mining
Company / organization: Name: Iamgold Corp; NAICS: 212221; Name: Yamana Gold Inc; NAICS: 212221; Name: Barrick Gold Corp; NAICS: 212221
Classification: 9180: International; 8500: Extractive industries
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2014
Publication date: Dec 11, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634953421
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634953421?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: How Cheaper Oil Helps U.S. Factories
Author: Aeppel, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.2.
Abstract:
"The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month.
Full text: Cheaper oil is creating winners and losers among America's factories. Manufacturers who use oil and products derived from it are saving big money. But energy development has been a hot spot in the postrecession U.S. economy, benefiting producers of everything from steel pipes and valves to earthmovers. Those companies are now being squeezed. Among those feeling the pinch is Dover Corp., which earns a quarter of its revenue from selling pumps and other equipment to energy companies. "Clearly there are near-term challenges in front of us," Chief Executive Bob Livingston told investors in New York on Monday. Dover said it hasn't yet seen a pullback in oil drilling, but the company is cutting costs and re-evaluating some investments in anticipation of reduced oil exploration in the U.S. next year. General Electric Co. in October cut projections for future growth in its oil-and-gas business, adding it was monitoring the sector with "caution." Rockwell Automation Inc. also is weighing what cheaper oil means for its bottom line. The industrial-equipment maker counts on the oil and gas industry for about 12% of its sales. "Everyone who uses oil as a feed stock -- from chemicals to consumer industries -- are going to benefit," said CEO Keith Nosbusch. That could mean more sales of Rockwell's industrial controls, motors and sensors to those industries. Meanwhile, oil drillers won't stop investments entirely, he said, and are likely to spend more on productivity-enhancing equipment. U.S. manufacturing has been a bright spot in the recovery, though it is far from booming. Manufacturing output grew 3.4% over the past year and finally recovered this past summer to its prerecession level, according to the Federal Reserve. How falling oil prices affect manufacturers will depend on how low crude goes and how long it stays there. Oil continued its slide Wednesday after the Organization of the Petroleum Exporting Countries cut forecasts for demand for its oil next year. The benchmark U.S. oil price fell to $60.94 a barrel, the lowest level since July 2009. If prices fall much further and stay down, it will mean sharp cuts in investments that reverberate through the manufacturing supply chain. ConocoPhillips became the first oil major to announce such a move, earlier this week saying it would cut its capital spending to $13.5 billion next year, down 20% from this year's level. Still, the larger picture for manufacturers remains positive. "The fall in oil definitely cuts both ways, but I see the net demand for manufacturers going up," as it stimulates more spending in other parts of the economy, said Dan North, lead economist for North America at Euler Hermes Economic Research in Owings Mill, Md. He points to auto sales, which notched their strongest November sales rate since 2003 last month. "I don't think it's a coincidence that we're getting sharp increases in [auto] sales at a time of sharp decreases in gas prices," said Mr. North. Goodyear Tire & Rubber Co. supplies tires to companies that do oil exploration and acknowledges its sales to those companies may decline in the months ahead. But that is far outweighed by the benefits Goodyear gets from cheaper oil, said spokesman Keith Price. Two-thirds of the company's raw materials are derived from petroleum, including synthetic rubber and carbon black. The company reported its raw-material costs fell 6% year-over-year in the third quarter, though part of that reflects cheaper natural rubber. It takes time for lower oil prices to filter through to its suppliers, which is why Goodyear predicts its raw-material bill will keep falling through the first half of next year. "But what really helps us," said Mr. Price, "is that as gas prices fall, people tend to drive more -- so their tires wear out faster." Don Norman, director of economic studies at the MAPI Foundation, a manufacturing research group in Arlington, Va., agrees cheaper oil benefits most manufacturers. "Manufacturers benefit because of lower prices, including lower shipping costs. And consumers spending less on gas and heating oil means they'll be out shopping," he said. The farther a business is removed from the production of oil, the more clear the benefits. At Northland Aluminum Products Inc. in Minneapolis, for instance, orders for its trademark bunt pans and other baking gear surged in late September and CEO David Dalquist credits falling oil prices. Business is 15% above his projections last summer. "We see a one-to-one relation between discretionary income and the price of gasoline," he said. Northland eventually expects to see declines in raw-material prices. --- Ted Mann contributed to this article. Credit: By Timothy Aeppel
Subject: Petroleum industry; Capital expenditures; Manufacturing; Crude oil prices
Location: United States--US
Company / organization: Name: Rockwell Automation Inc; NAICS: 334419, 334513, 335314, 334111, 334112; Name: Dover Corp; NAICS: 334513, 332919, 333921, 333318, 333517; Name: Goodyear Tire & Rubber Co; NAICS: 326211, 326299
Classification: 8600: Manufacturing industries not elsewhere classified; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2014
Publication date: Dec 11, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634953529
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634953529?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reprod uced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Plunge Dims Outlook for LNG Projects; Companies Including Chevron and Shell Have Invested Nearly $250 Billion in LNG Projects
Author: Ross, Kelly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Unless prices recover, the decline could wipe out returns for companies such as Chevron Corp. and Royal Dutch Shell PLC, which have committed nearly $250 billion combined to liquefied-natural-gas projects over the past seven years to meet rising Asian demand for the cleaner-burning fuel.
Full text: SYDNEY--Investors in giant gas-export terminals from Australia to Canada are facing the prospect of losing billions of dollars plowed into the projects as plunging oil prices darken the outlook for the industry. Unless prices recover, the decline could wipe out returns for companies such as Chevron Corp. and Royal Dutch Shell PLC, which have committed nearly $250 billion combined to liquefied-natural-gas projects over the past seven years to meet rising Asian demand for the cleaner-burning fuel. LNG is natural gas compressed into liquid form inside huge refrigeration units, making it possible to ship it on tankers to places unconnected by pipelines. To fund their plans, the companies have typically agreed to sell most of the gas up front, ahead of the completion of their projects, at rates linked to oil prices. The oil-linked pricing means LNG producers stand to get much less revenue when they deliver their first shipments than if crude had remained nearer its peak of $116 some six months ago. On Thursday, Brent crude, the global oil-price benchmark, was near $64 a barrel in European trading. Already, the decline has claimed a casualty in Canada. Last week, developers led by Malaysia's Petroliam Nasional Bhd., or Petronas, indefinitely delayed starting construction of a $32 billion on the Pacific coast. Crude futures have been weakening for months, but declines accelerated last month following a to maintain its production limits, despite concern over a glut of oil. have sunk below $10 per million British thermal units, meaning many of the projects may struggle to turn a profit. "OPEC's come along and burst the bubble," said Mark Samter, a Sydney-based analyst at Credit Suisse. "Project returns are awful at these prices." To break even, most Australian LNG projects would need to sell the commodity for at least $12-to-$14 per million British thermal units, according to estimates from Credit Suisse and Wood Mackenzie, a resource-industry consultancy. The price would need to be even higher for some of the more-expensive developments. To be sure, most experts believe demand for LNG will soar over the coming decades as countries such as China attempt to drive their modernization using fuel that burns more cleanly than coal. Demand for LNG will also likely remain high in economies such as South Korea and Japan, which lack fossil-fuel reserves. Japan has been using more LNG since the 2011 prompted it to close its nuclear reactors. Typically, spanning up to 30 years. A swift recovery in the oil price could allow projects to make money eventually, if their owners can withstand the financial pressure long enough. Santos Ltd., a big investor in Australian LNG, has been forced to cut spending across its business after the fall in oil prices prompted it to defer raising cash through a sale of so-called hybrid securities. Even as companies struggle with lower prices, Australian LNG projects have suffered from cost overruns caused by everything from unfavorable currency swings to labor shortages. The challenges are different for producers in Middle Eastern countries such as Qatar, where labor costs are lower. On the east coast of Australia, U.K. oil-and-gas company BG Group PLC is running last-minute checks before starting up a vast facility that cost more than $20 billion to build, having overcome budget overruns of more than a third of the original price tag. The project--clustered on an island with two giant plants owned by rivals including Santos, Total SA and ConocoPhillips--is due to ship its first LNG cargoes to Asia this month. BG said it remained optimistic about the prospects for its Queensland Curtis LNG project, which counts China's Cnooc Ltd. as a minority investor and a key customer. "The economics for QCLNG are sound and competitive across a wide range of oil prices," a BBG spokesman said. The company bolstered its balance sheet this week by selling the project's main pipeline to Australia's APA Group Ltd. for $5 billion. On the country's west coast, the cost of building the Gorgon LNG project, operated by Chevron with backing from Shell and Exxon Mobil Corp., has already swelled by around 45% to $54 billion since building started in 2009. The work is expected to be completed sometime next year, when the project is also supposed to come online. A spokesman for Chevron declined to comment on the weakening oil price, but Chief Financial Officer Pat Yarrington said in October that four major projects it is building, including Gorgon, would rapidly turn from being "cash consumers" to "cash generators." "Clearly, many Australian projects are at risk of delivering inadequate returns," said Ian Ashcroft, a U.K.-based gas analyst at Wood Mackenzie. "Some are already suffering due to cost overruns, but the impact of the oil price on early cash flow is also critical to project economics." Elsewhere, companies that haven't started building dozens more planned LNG terminals in Canada and East African countries such as Tanzania and Mozambique will likely be questioning the timing of hundreds of billions of dollars in proposed new investments. U.S. shale-gas producers looking to export their product are affected less by the drop in oil prices because they typically signed contracts overseas linked to U.S. domestic-gas prices, which are low due to the boom in the local production of shale gas. But on the flip side, thanks to crude oil's fall, LNG producers offering oil-linked contracts will be able to compete better in the international market against their U.S. rivals. Currently, two LNG terminals are under construction in the U.S. Several more have received the go-ahead from regulators. Construction of the Sabine Pass project in Louisiana, operated by Houston-based Cheniere Energy Inc., began two years ago and is expected to be completed late next year. Freeport LNG Development LP last month began a project in Texas; it expects to begin shipping gas in 2018. Both projects involve converting LNG import terminals into export facilities. They are expected to be less expensive than the Australian ones because pipelines and storage tanks are already in place. Cheniere declined to comment, while a spokeswoman for Freeport said it had signed contracts that would absorb its plant's projected output for decades. Daniel Gilbert in Houston and Mari Iwata in Tokyo contributed to this article. Write to Ross Kelly at Credit: By Ross Kelly
Subject: LNG; Petroleum industry; Prices; Natural gas
Location: Canada Australia
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Petronas; NAICS: 211111; Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634955091
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634955091?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tumbling Crude Price Knocks Oil Stocks, Currencies Lower; Investors Also Fretting About Slowing Global Growth
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Eurozone finance ministers agreed to extend Greece's bailout by two months on Monday, giving Athens and its international creditors extra time to decide on new budget cuts, and pushing a decision on further support beyond presidential elections.
Full text: Oil-related stocks and currencies continue to suffer steep declines after , turning up the heat on major oil-exporting economies, two of which made monetary-policy announcements Thursday. Brent crude oil slumped to $63.70 a barrel while West Texas Intermediate hit $60.09, both levels not seen since July 2009. Even though prices recovered somewhat later in the day, the sting remained palpable. Russia's ruble hit an all-time low against the dollar of 55.73 rubles mid afternoon, compared with just over 32 at the start of the year, even after the Bank of Russia raised its by one percentage point to 10.5%. Even though an interest rate rise would typically strengthen a currency, some economists said that this was a relatively moderate move. "This was the minimum that the CBR was likely to do," said Tim Ash, head of emerging market research for Standard Bank. "I guess this shows that the CBR is loath to do anything radical, and is like a rabbit caught in the headlights." The Norwegian krone, meanwhile, against the euro after the central bank cut its key interest rate to 1.25% from 1.5% to combat slowing domestic growth and the falling price of oil. The krone lost almost 1.5% against the euro after the announcement, to trade just over 9 kroner against the single currency. Oslo's main stock index was down around 0.3% by midafternoon. The krone has depreciated around 7.4% against the euro since the start of the year. Norges Bank was broadly expected to keep rates on hold. Its last cut was in March 2012. Norway is Europe's biggest crude exporter and Norges Bank said in a statement Thursday that "activity in the petroleum industry is set to be weaker than projected earlier." Elsewhere Thursday, European shares dropped for a fourth consecutive day as fears of slowing global economic growth continued to permeate markets, while uncertainty over Greece's political future also lingered. Some equities indexes recovered later in the day--the Stoxx Europe 600 closed broadly flat--but London's FTSE 100, with substantial exposure to the oil and gas sector, remained under fire, falling 0.7% on the day. Athens's main stock index was the biggest underperformer, though, slumping an additional 7.4% on lasting political jitters. The yield on the country's 10-year government bond hovered close to 9.0%, about 0.45 percentage point wider on the day. Earlier in the week, the announced that Parliament would vote on a new president on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March. that Greece's radical left opposition Syriza party could win national elections if presidential voting rounds fail to find a solution acceptable to all. The latest opinion polls suggest that Syriza--which has threatened to tear up the economic overhaul and austerity program that has accompanied the country's international bailout--would win national elections by about three to six percentages points, and could precipitate a new crisis with Greece's creditors. Eurozone finance ministers agreed to extend Greece's bailout by two months on Monday, giving Athens and its international creditors extra time to decide on new budget cuts, and pushing a decision on further support beyond presidential elections. That market volatility sparked a renewed appetite for assets considered to be safest at times of stress. The yield on Germany's 10-year government bond declined to a fresh all-time low of 0.656%. Yields fall as bond prices rise. In the U.S., the S&P 500 rose strongly, having tumbled in the previous session, fueled by figures showing that November sales at U.S. retailers grew at their fastest pace in eight months. Separate data showed a drop in weekly jobless claims. The European Central Bank said on Thursday it ($161.6 billion) in four-year loans to banks in the second installment of a lending program aimed at raising the ECB's balance sheet and spurring new credit to the private sector. Demand was greater than the nearly [euro]83 billion provided at the previous offer of four-year loans in mid-September, but was below the roughly [euro]150 billion takeup expected by economists. As a result, the outcome could heap further pressure on the ECB to expand its broad-based asset-purchase program early in the new year to include sovereign bonds. The euro was trading around 0.7% lower against the dollar in late European trade, at $1.240. Gold was 0.1% lower on the day at $1,228.50 a troy ounce. Todd Buell contributed to this article Write to Josie Cox at Credit: By Josie Cox
Subject: Interest rates; Bailouts; Currency; Statistical data
Location: Russia Greece
People: Papoulias, Karolos
Company / organization: Name: Norges Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634968982
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634968982?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norway Surprises With Rate Cut to 1.25% From 1.5%; Central Bank Cites Negative Effects of Declining Oil Price
Author: Duxbury, Charles
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract: None available.
Full text: Norway's central bank surprised with a rate cut on Thursday citing the negative effects on the economy of weakening activity in the oil sector and a falling oil price. Norges Bank said after a policy meeting it would cut its benchmark interest rate to 1.25% from 1.5% where it had been since March 2012. The Norwegian krone fell sharply against the euro, which rose to 9.06 kronor from 8.88 kronor. Write to Charles Duxbury at Credit: By Charles Duxbury
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634968986
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634968986?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Wary Investors Sell Stocks As Oil Prices Keep Falling
Author: Friedman, Nicole; Strumpf, Dan; Said, Summer
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: A.1.
Abstract:
Skittish investors, wary about the health of the world economy, pushed the Dow industrials to their largest decline in two months, propelled in part by reports of a deepening global oil glut that sent crude prices to five-year lows. The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels.
Full text: Skittish investors, wary about the health of the world economy, pushed the Dow industrials to their largest decline in two months, propelled in part by reports of a deepening global oil glut that sent crude prices to five-year lows. The benchmark U.S. oil price slid 4.5% on the New York Mercantile Exchange, to $60.94 a barrel, bringing year-to-date losses to 38%. The declines delivered the latest blow to an oil industry that just months ago was thought to be booming, as many analysts and observers predicted that crude prices would remain near $100 a barrel. Other markets also saw large moves Wednesday, as investors bought government bonds perceived as safe, unwound bullish bets on the U.S. dollar, and sold riskier assets such as high-yield corporate, or "junk," bonds. The retreat from riskier assets and the embrace of securities perceived as safe underscores the fragile mind-set of many investors, analysts and traders said, following a 2014 rally that has taken stock and bond prices in many markets around the globe to near record levels. U.S. stocks are trading above their historical average valuations, many investors said, and the Dow industrials haven't had a 10% decline, known as a correction, for more than three years. Despite Wednesday's slide, major indexes remain close to record territory. The Dow is just 2.4% off its record hit on Friday and is up 5.8% for the year. The steady gains in stocks amid mostly uneven U.S. growth has made some portfolio managers nervous that at least a temporary reversal could be in the offing. "There's some global unease that has people wanting to take money off the table," said Jesse Lubarsky, senior vice president and equities trader at Raymond James. "We've had this nice rally for a while, but there are still worries." New data on Wednesday out of the U.S., the world's biggest oil consumer, showed an unexpected increase in crude supplies last week. Meanwhile, the latest projections from the Organization of the Petroleum Exporting Countries point to lower demand for the cartel's oil in 2015. The Dow Jones Industrial Average slumped to its biggest one-day point and percentage decline since Oct. 9, dropping 268.05 points, or 1.5%, to 17533.15. The S&P 500 index fell 33.68 points, or 1.6%, to 2026.14. Hardest hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. Shares in Exxon Mobil Corp. lost 3%, ConocoPhillips slid 2.2% and Chevron Corp. dropped 2%. Among small producers, Comstock Resources Inc. tumbled 11%, Goodrich Petroleum Corp. slipped 8.8% and Triangle Petroleum Corp. fell 8.6%. Shares of materials, industrials and technology companies also tumbled. All 10 major market sectors declined. To be sure, there is good news for the world economy in falling energy prices. Declining fuel costs stand to put more money in household coffers and boost consumer spending in a shift that economists expect will bolster growth in the world's largest economies. But concerns about the global growth outlook and fears of deflation, a damaging spiral of falling prices and slowing spending, in some regions such as Japan and Europe continue to compete with the crude drop for investors' attention. The dollar, usually considered a safe haven, has fallen against the yen and the euro since Friday, including a 1.6% drop against the Japanese currency on Wednesday. Investors appear to be taking advantage of periods of uncertainty to take profits on dollar bets that have appreciated substantially this year. The 10-year Treasury note rallied, sending its yield to near a two-month low of 2.169%. Driving the shifts: concerns that the drop in oil prices would weigh on already-low inflation in Europe and Asia. A number of big banks, including Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, have lowered their forecasts in recent months as prices have fallen well below expectations. In mid-June, when prices started falling, most market watchers thought that geopolitics posed a danger to oil supplies, as insurgents had recently entered Iraq and Libyan exports were uncertain due to unrest. Since then, production from both Iraq and Libya has increased, surprising many and augmenting the output of oil coming from the U.S., which is at its highest level since 1986. Some observers expected OPEC to announce a production cut right up until the group's Nov. 27 meeting. The cartel decided to maintain output levels. Some saw the inaction as a new era for the oil market in which the cartel has less power, while others said the group is likely to reassert its strength by announcing a production cut early in 2015. Wednesday was the biggest one-day drop in the oil price since Nov. 28, the session that followed OPEC's decision to maintain its oil-output target. OPEC's agreement to stand pat was the latest catalyst for a selloff that began in June. Last week, Credit Suisse Group AG called for Brent crude, the global oil benchmark, to average $75.25 and Nymex oil to average $70 in 2015, down from its earlier forecasts of $91.50 and $84.50, respectively. Brent crude finished Wednesday at $64.24 a barrel, down 3.9% on the day. "What I'm looking at is a market that has no reason yet to bounce," said Jan Stuart, global energy economist at Credit Suisse. "There's no indication that [the market is] getting any less weak." Mr. Stuart said he believes oil prices will bottom out in the first quarter. After that, he expects reduced investment will lead to slower production growth at the same time demand strengthens. --- James Ramage contributed to this article.
Credit: By Nicole Friedman, Dan Strumpf and Summer Said
Subject: Petroleum industry; Investors; Dow Jones averages; Global economy; Crude oil prices; Securities markets
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 11, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634969093
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969093?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Stocks Slide Broadly as Crude-Oil Price Falls --- Hardest Hit Are Energy Producers, but All 10 Major Sectors Decline; Despite Pullback, Dow Isn't Far From Record Close
Author: Strumpf, Dan; Vaishampayan, Saumya
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: C.4.
Abstract:
Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out.
Full text: Stocks tumbled after a renewed downturn in oil prices rattled investors and led to sharp declines in already battered energy stocks. The Dow Jones Industrial Average dropped 268.05 points, or 1.5%, to 17533.15, its biggest one-day decline in two months and the third consecutive decline for the blue chips. The S&P 500 index sank 33.68 points, or 1.6%, to 2026.14. The Nasdaq Composite Index shed 82.44, or 1.7%, to 4684.03. The declines were marketwide. Hardest-hit were shares of U.S. energy producers, whose fortunes are closely tied to the price of oil. But shares of materials, industrials and technology companies were also down sharply. All 10 major market sectors were lower. Traders and investors attributed the slide to the latest downturn in the price of crude, spurred by an unexpected jump in domestic oil stockpiles that underscored the scale of the U.S. oil glut. Benchmark U.S. crude tumbled 4.5% to $60.94 a barrel on the New York Mercantile Exchange, the lowest since July 2009. However, several traders said selling was orderly and volumes weren't unusually heavy given the size of the day's move. Amplifying the slide, they said, was end-of-year jockeying by some investors selling losing bets as a way to reduce tax bills, pressuring already-hit corners of the market -- in this case, energy stocks. "Energy and crude is what's driving the boat," said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. "You get this sort of 'sell everything' mentality." The pullback in stocks this week comes after seven weeks in a row of gains for the Dow and S&P, and despite Wednesday's slide, major indexes remain close to recent record highs. The Dow is just 2.4% off its record hit on Friday and is up 5.8% year to date. The S&P is up 9.6% this year. Other markets also saw large moves. The yield on the 10-year Treasury note fell to a nearly two-month low of 2.169%, as investors fled to the haven of government bonds. The dollar fell 1.6% against the yen, in the largest one-day move since June 2013. Much of the day's focus, however, surrounded the slide in energy stocks. Among Dow components, Chevron shares fell $2.15, or 2%, to $104.86, and Exxon Mobil lost 2.71, or 3%, to 88.67. Harder hit were shares of small oil-and-gas producers, many of which face heavy debt loads that are coming under investor scrutiny amid lower oil prices. Energy companies in the S&P 600 index of small-capitalization companies fell 4.3%. Since midyear, more than half the value of companies in the index has been wiped out. More broadly, exploration-and-production companies, whose revenues are closely tied to the price of oil, fell sharply. The SPDR S&P Oil & Gas Exploration & Production exchange traded fund fell 4.8%. Many investors have said the drop in oil prices should benefit stocks in the long run, as falling gasoline prices boost consumer spending. While a decline in oil prices is a drag on earnings of energy companies, it could benefit earnings in the industrial and retail sectors, said Paul Atkinson, who oversees $3 billion as head of North American equities at Aberdeen Asset Management. "Overall . . . the benefits of lower oil prices will come through, and that will offset the problems at energy companies," he said. In overseas action, Greek stocks continued to fall amid political uncertainty in the country. Earlier this week, the Greek government sped up the timeline for a key vote in Parliament. The Athex, which had closed Tuesday almost 13% lower, fell as much as 4% at one point, but recovered to end 1% lower on the day. The Stoxx Europe 600 declined 0.3%. Stock-market action was mixed in Asia. China's Shanghai Composite Index rose 2.9%, while Japan's Nikkei Stock Average fell 2.2%. Gold futures fell 0.2% to $1,228.90 an ounce.
Credit: By Dan Strumpf and Saumya Vaishampayan
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 11, 2014
column: Wednesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634969151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969151?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Drop Puts Chill on U.S. Energy Drilling --- Accelerating Price Decline Is Forcing Some to Cut Workers, Flee Pricey Regions
Author: Cook, Lynn; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Dec 2014: B.1.
Abstract:
Energy companies' hedging strategies run the gamut from Continental Resources, which cancelled nearly all its price hedges and projected oil prices would soon rise, to Pioneer Natural Resources Co. of Irving, Texas, which has hedged 85% of its oil and gas output for 2015.
Full text: U.S. energy companies are starting to cut drilling, lay off workers and slash spending in the face of an accelerating decline in oil prices, which fell to a fresh five-year low Wednesday. The number of rigs drilling for oil in North Dakota and parts of Texas has started to edge down, new drilling permits have dropped sharply since October, and many companies say they are going to focus on their most profitable wells. EOG Resources Inc. this week said it would shed many of its Canadian oil and gas fields, close its Calgary office and lay off employees there as it refocuses in the U.S. Matador Resources Co. of Dallas is contemplating temporarily leaving the prolific Eagle Ford Shale area in South Texas in favor of drilling elsewhere in Texas and New Mexico, where it can make more money. Investors sold off shares of energy companies including EOG as the U.S. benchmark oil price fell to $60.94 on Wednesday. EOG lost nearly 3% to $86.79 while shale specialists Continental Resources Inc. and Chesapeake Energy Corp. both declined about 7%. Many of these U.S. independent drillers have lost half their value since June. Shares of global energy giants have fared better than the independent U.S. companies because their refining operations are benefiting from cheaper oil. But some of the biggest are disclosing cutbacks. BP PLC, which has been cutting back since the Deepwater Horizon oil spill in 2010, outlined a further $1 billion restructuring on Wednesday. ConocoPhillips, one of the biggest shale producers in the U.S., recently said it would spend 20% less next year on drilling wells, honing in on its sweetest spots instead of drilling its more expensive areas like Colorado's Niobrara. "At this point a contraction is unavoidable," said Karr Ingham, economist for the Texas Alliance of Energy Producers. One reason for the stock declines is investors are skeptical: Whatever their plans, U.S. companies produced 9.1 million barrels a day last week, the highest level since 1983, according to federal data. There is so much oil sloshing around the U.S. that refiners can't use it all, so 1.5 million barrels of crude went into U.S. oil stockpiles last week. Some companies will be able to keep pumping even at lower prices, depending on the location and quality of their wells. Enterprise Products Partners LP, which operates pipelines and oil storage terminals across the U.S., said its analysis shows that the average well in many shale formations aren't profitable at $60 oil. But wells considered high grade can withstand much lower prices. For instance, some wells in South Texas are profitable at prices of $30 a barrel, while the best in North Dakota's Bakken area can only withstand a drop to under $50 a barrel. Energy companies' hedging strategies run the gamut from Continental Resources, which cancelled nearly all its price hedges and projected oil prices would soon rise, to Pioneer Natural Resources Co. of Irving, Texas, which has hedged 85% of its oil and gas output for 2015. Companies that hedged their production aren't as exposed to falling prices and may not have to pump less or curb spending as quickly. Surging American oil output has helped create a global glut of oil that has sent prices spiraling downward. The benchmark U.S. oil price, which briefly rose above $107 a barrel in late June, closed below $61 a barrel Wednesday, down 43% since its summer high. Drilling permits issued in the U.S. dropped 36% between October and November, according to data from Drillinginfo, but remain 13% above their year earlier level. Another sign of the energy industry's pullback: the number of rigs drilling for oil in the Eagle Ford Shale in Texas has started to drop. Drilling in the nation's second most active oil region hit a peak of 210 rigs in July but recently fell to 190 rigs. These declines don't necessarily mean that U.S. oil output will fall, said Greg Haas, a director at research firm Stratas Advisors in Houston, because companies are getting more efficient at drilling. "It used to be if the rig count dropped then oil production dropped, but not anymore," he said. In a sense, energy companies are a victim of their own success. EOG, Chesapeake and others learned to drill and frack wells faster and wring more from each well. Chesapeake says its initial production at new wells in the Eagle Ford improved by 65% over the last five years. Houston-based EOG took 22 days to drill a well in South Texas in 2011; today it takes less than nine days. The company recently said it can make a 10% profit after taxes even if prices were to fall to $40 a barrel. However, companies with a lot of debt, low rates of return and little chance of drilling their way to better profitability will be hurt if crude remains below $75 a barrel, according to analysts at Global Hunter Securities. Among the companies it cited was Triangle Petroleum Corp. Jon Samuels, president of the Denver-based independent explorer, said his firm is profitable at the current price of oil. Triangle's shares are down 47% in the last two months. It is pushing vendors for cheaper prices for drilling equipment and contract labor in the new year, which should help bring down costs, he said. "You're going to see activity levels and spending go down substantially compared to this year," Mr. Samuels said, adding that the stock market reaction to crude's price drop has been overblown.
Credit: By Lynn Cook and Erin Ailworth
Subject: Petroleum industry; Investments; Hydraulic fracturing; Crude oil prices; Petroleum production
Location: Texas North Dakota
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: BP PLC; NAICS: 447110, 324110, 211111
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Dec 11, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634969189
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634969189?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gulf Markets Fall on Lower Oil Prices; Dubai Down More Than 5% After the Price of Crude Falls
Author: Jones, Rory; Parasie, Nico
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Saudi oil minister Ali al-Naimi on Wednesday indicated that the Gulf oil producer wouldn't cut production despite the falling price of oil.
Full text: DUBAI--Stock markets in the Persian Gulf plunged on Thursday, capping a week of selling in the region as retail investors were jolted by the prospect of a prolonged period of lower oil prices. Dubai's market was down more than 5% after the price of. The main index in Abu Dhabi dropped 3.7%, Qatar slid 4%, Oman was down 4.1% and Kuwait fell 1.5%. Saudi Arabia's index, the largest in the region, opened down 2%. Emaar Properties, the region's biggest developer, fell 6%. Dubai Parks and Resorts, which listed on the Dubai Financial Market on Wednesday, fell 7% after a 9% drop in its first day of trading. Saudi Basic Industries Corporation, or SABIC, one of the world's biggest petrochemical firms, fell 3%. Saudi oil minister Ali al-Naimi on Wednesday indicated that the Gulf oil producer wouldn't cut production despite the falling price of oil. The benchmark U.S. oil price slid 4.5% on the New York Mercantile Exchange on Wednesday to $60.94 a barrel, bringing year-to-date losses to 38%. The governments of the Persian Gulf are expected to in the long-term as previous budget surpluses will easily maintain new deficits created by the lower oil price, according to economists. Write to Rory Jones at and Nico Parasie at Credit: By Rory Jones And Nico Parasie
Subject: Petroleum industry; Stock exchanges; Supply & demand
Location: Oman Qatar Kuwait United States--US Abu Dhabi United Arab Emirates Saudi Arabia
Company / organization: Name: Emaar Properties; NAICS: 237210; Name: Dubai Financial Market; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Marke ts
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634971980
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Prices Drop Below $60; Prices Have Plunged About 40% in Nearly Six Months
Author: Hong, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
"The initial assessment of both OPEC and the EIA is that falling oil prices are not expected to increase global oil demand nor to significantly cut non-OPEC supply," said analysts at brokerage PVM in a note.
Full text: The benchmark U.S. oil price dropped below $60 a barrel for the first time in more-than five years, extending a losing streak as investors and traders brace for a global supply glut to worsen through next year. Oil futures settled 1.6%, or 99 cents, lower at a $59.95 a barrel on the New York Mercantile Exchange, a price not seen since July 2009 during a world-wide recession. Brent crude, a gauge of global prices, fell 0.9%, or 56 cents, to $63.68 a barrel on ICE Futures Europe. Oil prices have plunged about 40% in nearly six months due to rising production in the U.S. and elsewhere. Selling accelerated late last month after the Organization of the Petroleum Exporting Countries opted to . "Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of Again Capital. "It's just a complete rout." On Thursday, prices rebounded briefly into positive territory following the release of before falling again on the heels of a stronger dollar. Oil is priced in dollars and becomes more expensive for investors in other countries when the dollar strengthens, dampening their interest in the market. The dollar on Thursday against the Russian ruble, Brazilian real, Mexican peso and South African rand. Investors viewed $60 a barrel as a key psychological level for oil prices because it was a round number where traders had built up a significant position. Now that traders have pushed through that level, analysts say the next target for oil prices is $58 a barrel in the short term. The selloff on Thursday followed a sharp fall in oil prices on Wednesday, after U.S. data showed an unexpected increase in U.S. oil supplies last week as the nation's production rose to its highest level in decades. Wednesday's fall in oil prices, which has pummeled energy stocks in recent weeks, dragged down the broader stock market. On Thursday, major U.S. of the day. Traders attributed the decline late in the day to the fall in crude oil. Still, dropping oil prices have been a boon to the U.S. economy, as drivers are spending substantially less on gasoline in the midst of the holiday-shopping season. Data on Thursday showed U.S. retail sales in November logged their biggest gain in eight months, thanks to lower gasoline prices. But lower prices hurt oil-producing nations and companies that drill for oil and threaten the viability of expensive drilling projects, especially in U.S. shale-oil fields. "If you're an oil bull, you really have nothing to hang your hat on for more than a few blips here and there," said Kyle Cooper, managing director of research at consulting firm IAF Advisors. "I don't think prices are done going down yet." Both the U.S. Energy Information Administration and OPEC lowered their demand forecasts for 2015 in reports released this week. The International Energy Agency is due to release its own forecast Friday. "The initial assessment of both OPEC and the EIA is that falling oil prices are not expected to increase global oil demand nor to significantly cut non-OPEC supply," said analysts at brokerage PVM in a note. "The near future looks bleak and oversupplied." January reformulated gasoline blendstock, or RBOB, fell 1.1%, or 1.74 cents, to $1.6244 a gallon. January diesel gained 0.7%, or 1.5 cents, to $2.0614 a gallon. Nicole Friedman contributed to this article. Write to Nicole Hong at Credit: By Nicole Hong
Subject: Petroleum industry; Investments; Crude oil prices; Gasoline prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634983120
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634983120?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Bangladesh Labors to Clean Up Oil Spill That Threatens the Sundarbans; Experts Say Country Lacks Resources to Clean Up the Slick
Author: Syed Zain Al-Mahmood
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
On Thursday, officials at the Ministry of Environment and Forests said an oil tanker that sank two days ago in a river in the Sundarbans with about 350,000 liters (92,000 gallons) of furnace oil on board had been raised and towed to the river bank, stopping further spillage.
Full text: DHAKA--Bangladesh is struggling to clean up an oil spill that threatens environmental damage in the Sundarbans, the world's largest mangrove forest and home to rare Bengal tigers and river dolphins. On Thursday, officials at the Ministry of Environment and Forests said an oil tanker that sank two days ago in a river in the Sundarbans with about 350,000 liters (92,000 gallons) of furnace oil on board had been raised and towed to the river bank, stopping further spillage. Abdullah Al Islam, the deputy environment minister, said the government had closed the river route through the Sundarbans and mounted a cleanup operation involving navy personnel, forest guards and local volunteers. "We're doing everything we can to limit the damage to the Sundarbans," he said. Muhammad Giasuddin, managing director of Harun & Co., the tanker's owner, said the ship sank after being rammed by another vessel, which he didn't identify, in thick fog. He said his vessel wasn't to blame for the accident. There is no official data on how much oil has spilled. Forest guards, environmentalists and local residents said Thursday the oil had spread into smaller channels inside the forest, a complex mosaic of waterways, mud flats and small islands. Villagers described on local television an overpowering stench of oil and claimed that ducks were dying after swimming in the slick. Local environmentalists estimated that the slick had spread over an area measuring roughly 50 to 70 square kilometers. The Sundarbans, an area that stretches across the Ganges, Brahmaputra and Meghna river deltas near the Bay of Bengal, is home to rare animals like the Bengal tiger and other threatened species such as the river dolphins and Indian pythons. It was declared a Unesco world heritage site by the United Nations in 1997 and is visited by thousands of tourists annually. Biologists say the mangrove forest is the only place in the world where the freshwater Ganges dolphins and Irrawaddy dolphins are found. Experts say Bangladesh lacks the resources to clean up the oil slick, which has been washing up since Tuesday when the tanker, Southern Star-7, sank in the Shyala river, close to a sanctuary for endangered freshwater dolphins. In a statement, Pauline Tamesis, country director of the United Nations Development Program in Dhaka, expressed concern about the spill and called for efforts to prevent long-term environmental damage. The accident, Ms. Tamesis said, showed "the need for a complete ban on the movement of all commercial vessels through the Sundarbans." Dilip Kumar Dutta, a professor of environmental science at Khulna University, said the oil would reduce the amount of oxygen in the water and make it difficult for aquatic species to breathe. "The oil is spreading in the mud flats and removing it will need specialist expertise," he said. Officials of the environment ministry said a ship carrying dispersants--chemicals that help remove oil from the water surface by breaking oil slicks into smaller droplets--was heading to the area and would start work Thursday afternoon. Environmentalists have criticized the government for not reacting sooner to the spill and for allowing commercial shipping to pass through a wildlife sanctuary. "It is completely unacceptable for tankers to be passing through an area with a delicate ecosystem like the Sundarbans," said Syeda Rizwana Hasan, chief executive of the Bangladesh Environmental Lawyers' Association. "This was a disaster waiting to happen." Commercial boats were banned from passing through the Sundarbans in the late 1990s. The government in 2011 allowed a route to be opened through the forest after a regular river route that bypasses the Sundarbans was closed due to heavy silting. The government says it is dredging the river to fix the problem. Write to Syed Zain Al-Mahmood at Credit: By Syed Zain Al-Mahmood
Subject: Oil spills; Endangered & extinct species; Environmental protection; River ecology; Environmental cleanup
Location: Bangladesh Bay of Bengal
Company / organization: Name: United Nations--UN; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634994904
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1634994904?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Slide Drives Central Banks to Action; Oil Dropped to a Fresh Five-Year Low of $63.90 a Barrel
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract: None available.
Full text: The weak price of oil is increasingly spilling over into other financial markets, battering stocks and currencies of oil-dependent economies and driving central banks to action. The central banks of Russia and Norway each responded to continuing low oil prices Thursday to try to stem the selloff in their currencies. In the Persian Gulf, stock markets saw sharp declines. The price of Brent crude, which has tumbled 41% so far this year, dropped to a fresh five-year low of below $63.90 a barrel, while West Texas Intermediate hit $60.09--a level not since mid 2009. "Prices are forecast to remain pressured for at least two more quarters," said Barclays oil market economist Miswin Mahesh. He predicts that crude could slip below $60 a barrel in the near term--a level which he says is simply not sustainable for markets in the long run. Russia's central bank on Thursday to 10.5% from 9.5%, and its deposit rate to 9.5% from 8.5%, in an attempt to halt a slide in the ruble. The currency was battered earlier this year by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months by the oil shock, especially after the 12-member Organization of the Petroleum Exporting Countries last month to cut their output. Around 50% of Russia's annual budget revenue stems from oil and gas exports. Elsewhere in Europe, the Norwegian krone fell to a five-year low against the euro after the central bank to 1.25% from 1.5% to combat slowing domestic growth, specifically citing the tanking price of oil. The krone lost almost 1.5% against the single currency after the announcement, to trade just over nine kroner per euro. It has depreciated around 7.4% against the euro since the start of the year. Norges Bank had broadly been expected to keep rates on hold; it last cut rates in March 2012. Norway is Europe's biggest crude exporter, and Norges Bank said in a statement Thursday that "activity in the petroleum industry is set to be weaker than projected earlier." "The continuing collapse in oil prices now hangs like a bad smell over markets," said Anthony Peters, a strategist at London-based financial adviser SwissInvest, adding that it "creates all kinds of conundrums in the foreign-exchange market" too. Tim Ash, head of emerging market research for Standard Bank said that Russia was now "a rabbit caught in the headlights." The central bank doesn't want to "waste" reserves by propping up the ruble, "and doesn't really want to raise policy rates for fear of pushing the economy deeper into recession." So as long as oil stays low and sanctions remain, the ruble will continue to feel the strain, he said. Société Générale strategists said that they now suggest investors buy the Turkish lira against the ruble. Turkey is a big energy importer, to the tune of some $55 billion a year, or 6.5% of gross domestic product, according to Standard Bank. Falling oil should deliver benefits for both the country's current account and for inflation. The lira has risen around 4.7% against the euro so far in 2014. Further afield, stock markets in the Persian Gulf also plunged Thursday, with traders similarly pointing to oil. Dubai's market was down more than 7%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman was down 4.2%. Saudi Arabia, the largest index in the region, fell 0.2%. In Europe, the Stoxx Europe 600 closed broadly flat on the day but the subindex of oil and gas companies ended down 0.4%, taking its slide so far this year to nearly 18%. London's FTSE 100 index, a large proportion of which is exposed to the oil and gas sector, fell around 0.7% to take losses so for in December to over 4%. According to several London-based traders, the recent tumble also inspired the central bank of Nigeria to intervene yet again late Wednesday, selling U.S. dollars to prop up the naira. Nigeria's central bank has taken action a number of times in recent weeks. Early last week, the naira slumped to 186.9 versus the U.S. dollar to an all-time low. On Thursday it was just below 180, according to Thomson Reuters data. Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the International Monetary Fund. Last week Nigeria's finance ministry proposed a lower benchmark for the budgeted oil price, suggesting spending cuts. A ministry spokesman said that Africa's biggest crude producer is now budgeting for an oil price of $65 a barrel, compared with the previous estimate of $73. "The country lacks a large fiscal buffer, which would allow it to maintain spending or run countercyclical policies," said Hedi Ben-Mlouka, an fund manager at Dubai-based Duet, which looks after around $5.5 billion of equity. As well as Nigeria, Kazakhstan would likely be hit particularly hard too, he said. On Wednesday, a report by Business Monitor International, a research unit of Fitch Ratings, said that the oil tumble had materially increased the risk of sovereign default in emerging markets, singling out Venezuela and Nigeria as particularly vulnerable. "A handful of net oil exporters are rushing headlong into the danger zone," the report states. Chiara Albanese contributed to this article Write to Josie Cox at Credit: By Josie Cox
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1634994919
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Import Prices Down 1.5% in November; Falling Oil Prices, Slow Growth Abroad and a Strong Dollar Hold Down Inflation
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Goldman Sachs economists this week said lower fuel prices will by $100 billion to $125 billion nationwide, boosting consumer spending on other goods and services, and adding 0.4 to 0.5 percentage point to the pace of economic growth over the coming year.
Full text: WASHINGTON--Prices of imported goods posted their biggest drop in nearly 2½ years in November, more evidence that falling oil prices, slow growth abroad and a strong dollar are holding down inflation in the U.S. Import prices fell 1.5% from October, the said Thursday. Compared to one year earlier, prices were down 2.3%, the biggest year-over year drop since the spring of 2013. The cost of overseas goods has been falling since July alongside a steady decline in oil prices. . Prices are down more than 40% since June. But the price of other goods also is falling, potentially pushing key inflation gauges lower and complicating the Federal Reserve's plans to raise interest rates as the labor market improves and the overall economy shows signs of steadier growth. Thursday's report said petroleum import prices fell 6.9% in November from the previous month and were down 12.3% on the year. Excluding petroleum, import prices declined 0.3% from the previous month and are up only 0.1% from a year earlier. "The stronger dollar will likely continue to depress import prices and domestic consumer goods prices in the months ahead," Laura Rosner, economist at BNP Paribas, said in a note to clients. Cheaper oil should prove to be a net gain for the U.S. economy, lowering the cost of gasoline and allowing consumers to spend more elsewhere. Indeed, . Meanwhile, the stronger dollar, which in part reflects the relatively robust performance of the U.S. economy compared to Europe, Japan and some emerging markets, makes foreign goods less expensive for American importers. The dollar is up almost 10% against the euro and more than 13% against the yen so far this year. Taken together, oil and the dollar are putting downward pressure on inflation, giving the Fed room to leave interest rates near zero, where they have held since December 2008. The picture could become more complicated if the labor market continues to improve but inflation remains well below the central bank's 2% target into next year. In October, the price index for personal consumption expenditures, the Fed's preferred inflation gauge, was up only 1.4% from a year earlier. Core prices, which exclude volatile food and energy, edged up to 1.6%. Economists at HSBC said core readings could fall a few tenths of a percentage point lower by the spring if global demand weakness and dollar appreciation continue. "Policy makers at the Fed can look past a rise or decline in inflation caused by swings in energy prices," HSBC said. "But changes in the trend for core inflation are more concerning." When inflation runs too low, central banks have less leverage to boost the economy if it starts to slow. Outright deflation generally signals a poor economic performance. The Fed's next meeting is set for Dec. 16-17. Most economists don't expect officials to start to raise interest rates until some time next year. Write to Jeffrey Sparshott at and Josh Mitchell at Credit: By Jeffrey Sparshott
Subject: Prices; Economic models
Location: United States--US
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635012200
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Rise on Robust Retail Sales; Oil Prices Extend Decline After Wednesday's Tumble
Author: Driebusch, Corrie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
"In essence a decline in prices at the pump represents an increase in consumers' discretionary take-home pay, and it shouldn't be surprising that you should start seeing stronger retail sales," said Burns McKinney, portfolio manager at NFJ Investment Group, which manages about $41 billion.
Full text: U.S. stocks rose Thursday with help from stronger-than-expected data on consumer spending, but fell back from their best levels as oil prices slumped. The Dow Jones Industrial Average climbed 63.19 points, or 0.36%, to end at 17596.34. During the session, the blue-chip index had risen as many as 225 points. The S&P 500 added 9.19 points, or 0.45%, to 2035.33 and the Nasdaq Composite rose 24.14 points, or 0.52%, to 4708.16. After posting strong gains early in the session, stocks pared their advance in the afternoon as the for the first time since July 2009. The benchmark U.S. oil price settled at $59.95 a barrel. Stocks were buoyed by data showing from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%. A decline in the number of Americans filing for first-time jobless benefits last week also cheered investors, who said they viewed the decrease as a sign that the labor market continues to improve. Traders said that after recent sharp declines in equities, investors were ready to step in and buy shares of heavily downtrodden companies. In recent sessions stocks have had difficulty sustaining big moves upward or downward. "Stocks have been choppy," said Quincy Krosby, market strategist at Prudential Financial. "Either the market today is leading us into the second half of December, which typically is a strong period for stocks, or we may have a little more consolidation to go before we get the Santa Claus rally." Thursday's gains marked a reversal from the previous session's selloff that saw the Dow industrials post their biggest one-day loss in two months, as oil prices tumbled to five-year lows. The decline in oil prices leaves American consumers with more money in their pockets, potentially providing a boost to the U.S. economy, which already has seen robust job growth this year. However, falling crude prices cut into the profit of energy companies, particularly those whose revenues rely heavily on U.S. shale oil, and this has led to steep declines in energy shares. The benchmark U.S. oil price is down more than 9% so far this week and the S&P 500 is off 1.9%. Consumer discretionary shares rallied Thursday on the positive retail sales data, with the sector up 0.7%. The market was "influenced by stronger-than-expected retail sales and lower-than-expected jobless claims," said Kent Engelke, chief economic strategist of Capitol Securities Management Inc., which manages just under $5 billion. The data supported the view that the U.S. economy is improving and came as stocks were ready to rebound after getting "beaten up" the day before, he said. Investors noted that the positive economic figures released Thursday likely benefited from the lower cost of oil, and the benefits should continue to reverberate through the U.S. economy. "In essence a decline in prices at the pump represents an increase in consumers' discretionary take-home pay, and it shouldn't be surprising that you should start seeing stronger retail sales," said Burns McKinney, portfolio manager at NFJ Investment Group, which manages about $41 billion. "Where you should see it the most is Wal-Mart or Costco where sales are competing for the incremental or marginal dollar to a greater degree than some of the luxury retailers." Shares of Wal-Mart Stores Inc. rose 1.02% and those of Costco Wholesale Corp. gained 0.8%. European stocks were unchanged, with the Stoxx Europe 600 down a fraction of a point. The yield on the 10-year Treasury note rose to 2.178% from 2.169% on Wednesday. Yields rise as prices fall. The U.S. dollar strengthened, rising against the yen and the euro. In corporate news, shares of Staples Inc. jumped nearly 9% after Starboard Value LP disclosed in filings that it has in the company. The activist investor also boosted its position in Office Depot Inc. to about 10%. Shares of Office Depot rose 12%. RadioShack Corp. on Thursday outlined a $400 million cost-cutting plan it hopes will stanch a hemorrhage of cash, as the struggling electronics chain tries to get through the holiday season in good enough shape to trigger a rescue plan from its lenders. Shares fell 7.3%. Shares of Lending Club Corp. opened at $24.75 in their , well above their initial public offering price of $15, and valuing the company at nearly $9 billion. Shares closed up 56%. Write to Corrie Driebusch at Credit: By Corrie Driebusch
Subject: Petroleum industry; Stocks; Crude oil prices
Location: United States--US
Company / organization: Name: Prudential Financial Inc; NAICS: 551112; Name: Costco Wholesale Corp; NAICS: 452910; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635012234
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012234?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cenovus Cuts Capital Budget, Cash Flow View; Canadian Oil Producer Plans to Maintain Current Dividend Level
Author: McKinnon, Judy; George-Cosh, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Canadian oil producer Cenovus Energy Inc. on Thursday lowered its 2015 capital-spending budget by about 15% and said it expects a 29% drop in cash flow due to slumping oil prices, but plans to maintain its current dividend level.
Full text: Canadian oil producer Cenovus Energy Inc. on Thursday lowered its 2015 capital-spending budget by about 15% and said it expects a 29% drop in cash flow due to slumping oil prices, but plans to maintain its current dividend level. The Calgary, Alberta company joins a host of other major energy firms paring back spending as oil prices remain weak. Last week, oil-sands giant Canadian Oil Sands Ltd. next year, while smaller oil and gas producers Baytex Energy Corp. and Trilogy Energy Corp. both cut capital spending and either slashed or suspended dividends. The scale back comes as crude prices hit new, five-year lows on Wednesday amid fresh signs of oversupply and as OPEC forecast lower demand for its oil next year. Cenovus said it plans to focus its spending next year on producing assets and completing expansions of oil-sands projects which are already well under way, but "at a slow pace that conserves cash," Chief Executive Brian Ferguson said on a conference call. "We continue to see continued volatility in oil prices throughout 2015 and we intend to exercise capital discipline in order to live within our means," Mr. Ferguson said. The company plans 2015 spending of between 2.5 billion Canadian dollars ($2.18 billion) and C$2.7 billion, down from 2014 guidance of between C$3.0 billion and C$3.1 billion. Cenovus said it would evaluate capital spending in the first quarter of next year and may adjust its budget if oil prices remain volatile. However, Mr. Ferguson said Cenovus has enough "capital flexibility" should oil prices remain low. Cash flow is expected to decline to between C$2.6 billion and C$2.9 billion from 2014 guidance of C$3.8 billion to C$3.9 billion. Production, however, is expected to increase about 9% for oil sands and by about 4% overall to average between 197,000 and 214,000 barrels a day. Oil prices at $65 a barrel of West Texas Intermediate will be able to cover the company's C$2.1 billion in committed capital in 2015 with existing cash flow, Mr. Ferguson said. With oil prices falling 40% since October, Cenovus moved to spread its investment in some of its oil-sands projects over a longer period to preserve cash. The company expects first production from its Foster Creek oil-sands project to be pushed out by one or two quarters. Mr. Ferguson added that Cenovus is committed to increasing its dividend "over time as the company is prepared to grow." It currently pays a quarterly dividend of 26.62 Canadian cents per share. Write to Judy McKinnon at and David George-Cosh at Credit: By Judy McKinnon and David George-Cosh
Subject: Petroleum industry; Cash flow; Capital expenditures; Dividends; Crude oil prices
Location: Calgary Alberta Canada
Company / organization: Name: Baytex Energy Corp; NAICS: 324110; Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Cenovus Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635012248
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012248?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
ECB Math: Lending Plus Oil Equals More Action; Expansion of the ECB's Balance Sheet as Far Off as When Loosening Policy Began
Author: Barley, Richard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
Banks took up [euro]129.8 billion of loans due September 2018 in the second of the ECB's operations that it hopes will spur lending to companies and help expand the central bank's balance sheet.
Full text: The numbers just aren't adding up for the European Central Bank. to [euro]3 trillion is almost as far off today as it was when the central bank started loosening policy in June. Sovereign bond purchases--which will present significant practical problems for the ECB and the efficacy of which is far from assured--look a step closer. Banks took up [euro]129.8 billion of loans due September 2018 in the second of the ECB's operations that it hopes will spur lending to companies and help expand the central bank's balance sheet. Together with the first, that means banks have so far borrowed [euro]212.4 billion--only just over half of the [euro]400 billion the ECB thought the first two operations could raise. The of Thursday's operation isn't yet clear. After September's operation, when [euro]82.6 billion was allotted, net lending to banks only expanded by [euro]46.4 billion, due to repayments and changes in other loan facilities. The end result: the ECB's campaign has barely started. As of the last published balance sheet of Dec. 5, the ECB had only succeeded in stabilizing its size at just over [euro]2 trillion. Purchases of covered bonds and asset-backed securities have yet to move the dial, at just [euro]21.5 billion together. There will be six more loan operations, the next due in March, where allotments will depend on whether banks have achieved targets for lending. But meanwhile, another number is moving against the ECB too. The latest steep fall in oil prices seems likely to deliver a negative headline eurozone inflation reading in the coming months. Even though cheaper oil will be good for growth, and a central bank might usually not react to such a move, the pressure on the ECB to act is becoming palpable. The ECB at its last meeting said it intended, rather than merely expected, to expand its balance sheet. But even this semantic change failed to find unanimous support among the eurozone's central bankers. President Mario Draghi has pointed to the balance sheet as a key element the ECB would review next year in deciding whether to take further measures. Bridging the gap to [euro]3 trillion simply doesn't look possible without more action. Write to Richard Barley at Credit: By Richard Barley
Subject: Central banks; Euro; Balance sheets; Eurozone
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635012250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635012250?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Delta Expects Lower Fuel Prices to Boost Profit in 2015; Oil Drop Could Also Lead Carrier to Write-Off $1.2 Billion in Hedging
Author: Nicas, Jack
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
The No. 3 U.S. airline by traffic told investors on Thursday that it expects pretax income to jump 11% to $5 billion next year, including a net gain of $1.7 billion in cost savings from lower fuel costs.
Full text: Delta Air Lines Inc. said lower fuel prices would increase its profit next year but could also force the carrier to write off $1.2 billion from fuel hedging, illustrating the consequences of oil's unexpected plunge in one of the most oil-dependent industries. The No. 3 U.S. airline by traffic told investors on Thursday that it expects pretax income to jump 11% to $5 billion next year, including a net gain of $1.7 billion in cost savings from lower fuel costs. But those savings could have been some 70% larger without the hedges. Fuel is the airline industry's biggest expense, and managing the market's fluctuations is one of its trickiest challenges. Fuel hedges, or previous agreements to purchase fuel within a set price range, are common in the airline industry. They can protect carriers from a surge in fuel prices, although when fuel prices drop, carriers with hedges don't fully benefit and sometimes have to make big financial write-offs. Delta has been more aggressive than its peers in , in part by purchasing a Pennsylvania oil refinery in 2012 for $150 million. The carrier said a fourth-quarter profit of $75 million at its refinery would help offset a roughly $150 million hedging loss in the period. Paul Jacobson, Delta's chief financial officer, said the refinery, hedges and efficient operations help save Delta eight cents to 10 cents a gallon on fuel when prices are stable. But, partly because of hedges, "during periods of dramatic price swings...our goal is to drive industry parity" on fuel prices. Not all airlines hedge. American Airlines Group Inc., the world's biggest carrier by traffic, doesn't hedge and thus stands to benefit fully from the declining fuel prices. Some analysts argue that's a smarter approach. "We continue to view fuel hedging as a waste of time, money, and effort," Hunter Keay, a Wolfe Research analyst, wrote in a recent note. Hedges cost airlines billions of dollars in 2009, "to the point where the industry would have been profitable that year had it not hedged," he wrote. "It is frustrating to see history repeating itself." Few people expected oil's rapid descent--U.S. prices have fallen more than 40% since June--to just under $60 a barrel, a level last seen in 2009. Similarly, the price of jet fuel is down about a third over that period. It isn't clear how long the slump will last. Any rebound could change estimates for savings and hedging losses for Delta and other airlines. Barclays airline analysts estimate that U.S. will decline by roughly $10 billion in 2015. The analysts said it is unclear how much of those savings "will flow fully to earnings, but the potential remains substantial put against our $14.5 billion pretax earnings estimate for 2014." Delta President Ed Bastian said the airline's hedges save it about 65 cents for every dollar decrease in the price of fuel. The company is considering a smaller hedging position in 2016, but it hasn't yet "attempted to catch a falling knife" in locking in fuel prices with a 2016 hedge as oil continues to plummet. Richard Anderson, Delta's chief executive, said the company isn't assuming oil prices will stay low. "It's wonderful that fuel has run down. We love it. There's a $2 billion opportunity out there if we hold fare levels constant," he said. But, he added, the airline always uses high-price fuel assumptions when planning, causing it to set more aggressive cost controls and goals on investment returns. "And then when it comes in lower, hang on to all of" the savings, he said. Some analysts have worried lower fuel prices could encourage carriers to add capacity and lower fares, which would benefit fliers but weaken the financial discipline that helped transform the industry and produce record profits. This week, Spirit Airlines Inc. said rivals in Dallas were hurting its demand by decreasing fares in response to lower fuel prices. Some of that action is likely because Southwest Airlines Co. is competing for new customers after it recently expanded there following the expiration of government restrictions on a Dallas airport. Delta said it would use any savings from fuel to invest in its product and pay off its debt. Barclays analysts said their peers' concerns are overstated, estimating it would take about 470 new aircraft to offset the lower fuel costs from sustained depressed prices. "Over-investing would be many, many years off," the analysts said. Barclays analysts said that in their most conservative scenario of lower fuel prices, they increased their earnings estimates for airlines by 14% on average. Delta shares were up 4.6% Thursday, leading a broad increase in U.S. airline stocks. Daniel Gilbert contributed to this article. Write to Jack Nicas at Credit: By Jack Nicas
Subject: Airlines; Airline industry; Corporate profits; Prices; Cost control; Petroleum refineries
Location: United States--US
Company / organization: Name: American Airlines Group Inc; NAICS: 551114; Name: Delta Air Lines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635046635
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635046635?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Bank of Canada Chief Warns on Impact Of Financial Reform, Oil Prices; Stephen Poloz Says Falling Energy Prices "Always a Net Negative for Canada"
Author: Menon, Nirmala; Derby, Michael S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
NEW YORK--The head of Canada's central bank said global financial reforms will likely weigh on the availability of credit and pose a headwind to the world's economy, while adding that falling oil prices are likely to take a notable bite out of Canadian growth.
Full text: NEW YORK--The head of Canada's central bank said global financial reforms will likely weigh on the availability of credit and pose a headwind to the world's economy, while adding that falling oil prices are likely to take a notable bite out of Canadian growth. Stricter capital rules and other reforms put in place in the wake of the 2008 financial crisis will force banks to rein in risk-taking, Bank of Canada Governor Stephen Poloz said Thursday in a speech to the Economic Club of New York. Though the reforms will make the financial system safer, policy makers must ensure they don't stifle financial innovations, he said. "It would be surprising if the net effect were not to reduce the availability of credit," he said, adding "it goes without saying that reduced availability of credit would be a headwind to economic growth." He said those tough credit conditions will likely continue to affect businesses which already suffer from a lack of credit, such as startups and smaller businesses. Mr. Poloz said in response to an audience question that the decline in energy prices is a "positive for the global economy, that's a given." But he said sharp oil-price declines are "always a net negative for Canada," and "there's a significant hit that's on its way" for growth. Canada is a major oil producer and exporter. Mr. Poloz tackled the U.S. monetary policy outlook in questions from reporters following his address. He praised the Federal Reserve for having clearly stated its outlook for short-term interest rates. When the Fed lifts rates, "no one should be unprepared for this," he said. The Canadian central bank will keep a sharp eye on how Fed policy shifts might affect its nation, Mr. Poloz said. He added it will be critically important to see how the bond market reacts to any change in Fed policy. Key Fed officials have said the U.S. central bank is likely to raise rates off near-zero levels sometime in the middle of next year. In his speech, Mr. Poloz said the retreat by banks from some types of lending could open up other channels of competition, including market-based financing and private lending. Technological advances could spur private-capital funding, such as peer-to-peer financing which directly connects lenders with borrowers via the Internet. That type of financial innovation, rather than policy-induced growth, could be key to sustainable economic growth, he said, though he cautioned that increased participation of big institutions and hedge funds in peer-to-peer financing could pose new risks and have financial-stability implications. Global financial reform is "absolutely essential," he said, noting the costs pale in comparison with the cost of the financial crisis, which caused a cumulative loss of global output of roughly $10 trillion, or 15% of global gross domestic product, as of the end of 2013. Mr. Poloz also repeated that the increase in exports and business investment it is seeking to drive Canadian growth may finally have begun. His remarks came as Statistics Canada said Canadian industrial capacity use was at its highest point in about eight years in the third quarter, suggesting less slack in the Canadian economy, He reiterated that it will take a couple more years to achieve "steady, natural growth" with inflation sustainably at the 2% target. His remarks reinforced the view that the central bank is in no hurry to raise interest rates. Most economists expect the Bank of Canada to start hiking rates late next year. The global economy is at a "critical juncture" and policies will need to remain stimulative until global headwinds subside, Mr. Poloz said. Write to Nirmala Menon at nirmala.menon@wsj.com and Michael.derby@wsj.com Credit: By Nirmala Menon and Michael S. Derby
Subject: Monetary policy; Central banks; Interest rates; Banking; Economic crisis; Federal Reserve monetary policy; Economic growth; Gross Domestic Product--GDP
Location: Canada United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635052817
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635052817?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia's Tank Battle With Shale; Nation Aims to Boost Oil Inventories, Driving Prices Down
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
According to the latest numbers from the Department of Energy, inventories of crude oil, gasoline and distillate (including diesel) rose by a collective 15.3 million barrels in the week ended Dec 5.
Full text: Like many wars, Saudi Arabia's battle to win market share involves tanks. Storage tanks, that is. According to the latest numbers from the Department of Energy, inventories of crude oil, gasoline and distillate (including diesel) rose by a collective 15.3 million barrels in the week ended Dec 5. The expected amount: Just 800,000 barrels. The timing of this increase is especially striking because stocks are usually run down toward year end to reduce refiners' tax bills. This echoes other signs of a build-up. The International Energy Agency reported last month that commercial oil stocks in the developed world rose by 12.6 million barrels in September, versus a five-year average decline of 8.9 million for that month. And if Saudi Arabia gets its way, the tanks will keep filling, hitting its own profits but, Riyadh hopes, hurting North American oil producers more. Saudi Arabia wants refiners to keep processing as much oil as possible. It has been encouraging this in part by reducing the price of its oil relative to rival grades. Indeed, on Valero Energy's third-quarter earnings call last month, one of the refiner's senior executives said Saudi Arabia's barrels were back to being competitive. Only in August, U.S. imports of oil from the Persian Gulf had hit their lowest level since early 2011. The added twist is the way Riyadh sells its oil. It offers discounts to various benchmark prices when the oil is being delivered, rather than weeks before when it is being loaded onto tankers in the Persian Gulf. As energy economist Phil Verleger points out, this significantly reduces refiners' exposure to prices moving a lot during the voyage and effectively locks in a positive margin for them, provided they can sell the resulting products. In a volatile world, that is an attractive, low-risk option for refiners. This strategy not only helps Saudi Arabia win market share in the short term. By encouraging refiners to keep running even as global demand growth has slackened, it ensures storage tanks start to fill up. This can be seen in what has happened to oil futures. In general, if near-term contracts are trading below those dated further out, it implies there is enough supply relative to demand. A month ago, the curve was pretty flat, with the six-month contract trading just 54 cents a barrel, or 0.7%, above the front-month price. Now, that has widened to about $1.30, or 2.1%. That move might seem small, but the curve's steepening signifies a growing sense that supply is ample. Expect inventories to rise further in January. That is especially likely because the IEA expects almost 1 million barrels a day of new refining capacity to have opened worldwide this quarter. Those refineries will be competing with U.S. ones, putting competitive pressure on the prices of products like gasoline. This, in turn, will make Saudi Arabia's discounts on crude oil even more appealing. As refiners keep running, and stocks build, spot prices for crude oil look set to drop toward $50 a barrel. At that point, Saudi Arabia hopes, it will have inflicted grievous wounds against the profits and share prices of at least some North American oil companies, forcing them to wave the white flag. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Profits; Inventory; Market shares
Location: United States--US Saudi Arabia Persian Gulf
Company / organization: Name: Valero Energy Corp; NAICS: 486210, 324110, 211111; Name: International Energy Agency; NAICS: 928120; Name: Department of Energy; NAICS: 926130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635061223
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635061223?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
How the Grinch Stole the Oil Glut; Economists can find a downside to anything
Author: Queenan, Joe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
[...]recently, the crash in oil prices was widely perceived as a Christmas present for consumers. [...]we were much better off when gas was $4 a gallon.
Full text: Until recently, the crash in oil prices was widely perceived as a Christmas present for consumers. More money for gifts, food, warm clothing, toys and, for that matter, gas. Who wouldn't rejoice? Economists, that's who. Geopolitical experts. And anyone who owns stock in oil companies. No sooner did ordinary people start celebrating their cash windfall than the Grinch showed up and started lecturing them about the dark side of lower oil prices. All that glitters is not gold, the experts told the public. Always look a gift horse in the mouth. Don't you nitwits know anything? Here's what the experts have to say about plummeting oil prices. Lower fuel prices will lead to a consumer spending binge and that will lead to inflation. The drop will also destabilize foreign economies, contributing to political unrest, and discourage energy companies from looking for new sources of oil. It will hamper the development of alternative forms of energy. It will encourage consumers to buy gas-guzzling trucks and SUVs. It will encourage people to drive more, wrecking our highways and costing us billions of dollars in lost productivity because of employees stuck in traffic jams on I-95 or the 405. That's not all. The drop in fuel prices will prod the Fed to raise interest rates, traumatizing the bond market and sabotaging retirees' golden years. It will lead to even more crowded planes and delayed flights. It will make people even less likely to use public transportation. It will wreck the staycation industry because everyone will go back to vacationing in Antigua instead of the local Motel 6. It will help the Chinese climb out of their economic rut, and nothing that helps the Chinese can possibly be good for us. In short, we were much better off when gas was $4 a gallon. Poorly informed laymen might think that economists are only saying these things to be mean or because they couldn't care less about plummeting oil prices, since they all bike to work or own Priuses. But this is not true: Economists are coldblooded rationalists who would react the same way if any other industry suddenly slashed prices by 40%. "On the surface, massively reduced movie-ticket prices might seem like a boon," an expert might say. "But cheaper tickets will attract larger crowds to Sylvester Stallone films that would otherwise bomb. This will lead to 'The Expendables XI' and 'Rambo: Thirty-first Blood.' Lower ticket prices will bring in far more teenagers, who will drink a lot of soda loaded with sugar, which will wreck their teeth, burdening our massively overextended dental-care system." Economists would react the same way if candy makers slashed prices 40%. "Cheaper candy means fatter kids," a typical economist would argue, "which means higher clothing prices because you need a lot more denim to cover their humongous butts. Higher clothing costs lead to higher wages, which lead to inflation, which leads to labor unrest in developing countries where most of the clothes are made, which destabilizes the global economic system. And that helps the Chinese. The last thing we need in this country is lower prices on candy. Especially Swedish fish." Massively reduced milk prices? Makes babies fat and leads to heart disease. Slashed prices on hats? Even more ironic hipster fedoras. A 40% plunge in the price of a college education? It will simply encourage more dumb kids to get a college degree, further debasing the coin of the realm. Finally, how about a huge reduction in the cost of tickets to see Lynyrd Skynyrd or Bob Dylan, allowing impoverished baby boomers to enjoy the heroes of their misbegotten youth one last time? "It will only encourage more reunions," economists will argue, taking into account the fitness of a society in which AC/DC has just released a new record and Journey still exists. "We'll never get these guys to retire." Credit: By Joe Queenan
Subject: Clothing; Prices; Experts; Petroleum industry; Statistical data
People: Stallone, Sylvester
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Life and Style
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635061361
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635061361?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Brazil to Back New Petrobras Debt; Brazil's Guarantee to Help State-Run Oil Company Access Capital
Author: Connors, Will; Magalhaes, Luciana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
The U.S. Securities and Exchange Commission and the U.S. Department of Justice are of alleged wrongdoing at Petrobras because the company's shares trade in the U.S. Petrobras executives have said previously that they are cooperating with authorities on the investigation and have set up a compliance division at the company to address the alleged corruption.
Full text: RIO DE JANEIRO--The Brazilian government will help beleaguered state-run oil firm Petroleo Brasileiro SA raise money by guaranteeing its debt as part of an effort to stave off damage from falling oil prices and a corruption scandal. Brazil will guarantee debt issuance of an unspecified amount by Petrobras, supported in part by $3.4 billion that Petrobras lent the country's state-run power company, Eletrobras, according to a spokeswoman for the Ministry of Mines and Energy. The plan could be announced as early as this week, according to the spokeswoman. A Petrobras representative declined to comment. Petrobras's access to capital markets is restricted until it reports its audited third-quarter earnings. The company said last month that it has enough cash on hand to cover investments and operations for the next six months. Petrobras is expected to issue unaudited third-quarter results Friday. Petrobras is in the midst of an ambitious, $221 billion spending plan over the next five years as it develops offshore oil fields and ramps up production. But a widespread corruption scandal involving alleged overpayment for Petrobras contracts could crimp the company's ability to raise money. after its auditor, PricewaterhouseCoopers, declined to sign off on the results amid a widespread corruption probe at the company. A PricewaterhouseCoopers spokeswoman declined to comment. Brazilian prosecutors said during a press conference Thursday that at least 35 people, including two former Petrobras executives and more than a dozen executives from the country's biggest construction firms, participated in an alleged scheme to pay bribes for Petrobras contracts. At least 12 of those construction-industry executives were indicted this week on charges of money laundering, fraud and corruption, according to a person familiar with the investigation. The U.S. Securities and Exchange Commission and the U.S. Department of Justice are of alleged wrongdoing at Petrobras because the company's shares trade in the U.S. Petrobras executives have said previously that they are cooperating with authorities on the investigation and have set up a compliance division at the company to address the alleged corruption. Shares in Petrobras were down 3.7%, to $7.46, on the New York Stock Exchange at midday. Shares are down 57% over the last three months. Write to Will Connors at and Luciana Magalhaes at Credit: By Will Connors And Luciana Magalhaes
Subject: Corruption in government; Petroleum industry; Money laundering
Location: Brazil
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: PricewaterhouseCoopers LLP; NAICS: 541211, 541611; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Department of Justice; NAICS: 922130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635077657
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635077657?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduce d with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Morning Briefing: Oil Prices Extend Decline
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG 17596.3 63.19 0.36% 4708.16 24.14 0.52% 2035.33 9.19 0.45% Japan: Nikkei 225 17257.4 -155.18 -0.89% Hang Seng 23312.5 -211.98 -0.90% Shanghai Composite 2925.74 -14.26 -0.49% S&P BSE Sensex 27602 -229.09 -0.82% Australia: S&P/ASX 5231 -28 -0.53% UK: FTSE 100 6461.7 -38.34 -0.59% PRICE CHG YIELD% U.S. 2 Year -2/32 0.604 U.S. 5 Year -5/32 1.597 U.S. 10 Year 0/32 2.162 Australia 10 Year -11/32 2.912 China 10 Year -3/32 3.750 India 10 Year 1/32 7.869 Japan 10 Year 0/32 0.412 German 10 Year 1/32 0.680 LAST(MID) CHANGE Australia $ (AUD/USD) 0.827 -0.0001 Yen (USD/JPY) 118.75 0.09 S. Korean Won (USD/KRW) 1102.84 0 Chinese Yuan (USD/CNY) 6.1884 -0.0004 Euro (EUR/USD) 1.2412 0.0001 WSJ Dollar Index 81.67 0.02 LAST CHANGE % CHG Crude Oil 59.18 -1.76 -2.89% Brent Crude 63.59 -0.97 -1.50% Gold 1228.4 -1 -0.08% SNAPSHOT Oil extended its losing streak, with U.S. prices dropping below $60 a barrel for the first time in more than five years. Robust U.S. retail-sales data boosted stocks and the dollar, while sending Treasurys mostly lower and also weighing on gold prices. OPENING CALL China on Friday will release retail sales and industrial output data for November. As manufacturing and heavy industry slow, China needs consumption to pick up the baton of growth. And although retail sales are growing at a healthy double-digit clip, it's not clear that Chinese consumers can buy enough stuff to close an output gap that's pushing the economy into a slower growth scenario. EQUITIES U.S. stocks ended higher with help from stronger-than-expected data on consumer spending, but fell back from their best levels as oil prices slumped. Stocks were buoyed by data showing U.S. retail sales rose a seasonally adjusted 0.7% in November from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%. A decline in the number of Americans filing for first-time jobless benefits last week also cheered investors, who said they viewed the decrease as a sign that the labor market continues to improve. Traders said that after recent sharp declines in equities, investors were ready to step in and buy shares of heavily downtrodden companies. In recent sessions stocks have had difficulty sustaining big moves upward or downward. "Stocks have been choppy," said Quincy Krosby, market strategist at Prudential Financial. "Either the market today is leading us into the second half of December, which typically is a strong period for stocks, or we may have a little more consolidation to go before we get the Santa Claus rally." Thursday's gains marked a reversal from the previous session's selloff that saw the Dow industrials post their biggest one-day loss in two months, as oil prices tumbled to five-year lows. The decline in oil prices leaves American consumers with more money in their pockets, potentially providing a boost to the U.S. economy, which already has seen robust job growth this year. However, falling crude prices cut into the profit of energy companies, particularly those whose revenues rely heavily on U.S. shale oil, and this has led to steep declines in energy shares. The benchmark U.S. oil price is down more than 9% so far this week and the S&P 500 is off 1.9%. In corporate news, shares of Staples jumped nearly 9% after Starboard Value LP disclosed in filings that it has built a roughly 6% stake in the company. The activist investor also boosted its position in Office Depot to about 10%. Shares of Office Depot rose 12%. RadioShack outlined a $400 million cost-cutting plan it hopes will stanch a hemorrhage of cash, as the struggling electronics chain tries to get through the holiday season in good enough shape to trigger a rescue plan from its lenders. Shares fell 7.3%. Shares of Lending Club opened at $24.75 in their trading debut, well above their initial public offering price of $15, and valuing the company at nearly $9 billion. Shares closed up 56%. In Asian trading Thursday, stocks fell as a downturn in oil prices rippled through the region and pressured Chinese state-owned energy companies and major oil producers in Australia in particular. FOREX The dollar rose against the yen and the euro as stronger U.S. retail sales numbers for November nudged forward market expectations for higher interest rates. The greenback's gains return the U.S. currency to its upward trajectory against rivals. Investors in large numbers had been wagering on the dollar strengthening in the belief that an improving U.S. economy would move the Federal Reserve to raise interest rates before other central banks. Over the past three sessions, though, investors had been exiting some of those bullish bets on the dollar and moving into haven assets such as the yen amid concerns that the drop in oil to its lowest price in more than five years would weigh on already low inflation in economies around the world. "The dollar's recent correction, if you want to call it that, had exhausted itself," said Marc Chandler, global head of currencies at Brown Brothers Harriman. "We got to around $1.25 against the euro earlier this morning. The correction was already ending; the retail sales numbers just pushed it along." U.S. retail sales rose 0.7% in November from a month earlier, marking the largest increase in eight months. Removing autos, a volatile category, sales rose 0.5% last month. Economists predicted overall sales would increase 0.4%, and those sales excluding autos to rise 0.1% in November. The retail sales numbers, joining a robust November U.S. jobs report, should sit well with the Fed, said Steven Englander, head of developed-market currency strategy at Citigroup Inc. BONDS Benchmark 10-year U.S. Treasury notes pulled back for the first time this week as an upbeat U.S. consumer spending report sapped demand for haven assets. But the 30-year Treasury bond strengthened after a $13 billion sale of same-maturity U.S. government debt drew the highest demand in nearly two years. The auction result underscores the broad appeal of long-dated Treasury bonds whose returns this year have beaten stocks and gold. Demand for long-dated Treasury bonds has fired up this year as uneven global economic growth and low inflation have boosted the allure of highly-liquid financial assets even as the U.S. growth has gained momentum. Treasury bonds maturing in more than 25 years have posted a total return of 25.7% this year through Wednesday, according to data from Barclays. The overall Treasury debt market has returned 4.97%. The 30-year Treasury has drawn buyers as it offers the highest yield in the U.S. government bond market. The yield is also higher than those offered by comparable-maturity government bonds from Germany, the U.K., Japan and France. "Global yields are so low that there is overwhelming demand for high quality higher yielding assets and the long end of the U.S. bond market looks like a high yielder to Asian and European money mangers and reserve managers," said Tom Tucci, head of Treasury trading in New York at CIBC World Markets. Buyers piled into Thursday's 30-year bond sale even as they ended up getting a yield of 2.848%, the lowest for the maturity since November 2012. Indirect bidding for the 30-year auction, a gauge of foreign demand, rose to 49.8%, the highest since July. The 30-year bond's price had fallen earlier Thursday after U.S. retail sales climbed 0.7% in November from a month earlier, the biggest jump in eight months. The release was the latest evidence that the world's largest economy has gained traction, bolstering investors' expectations that stronger growth will allow the Federal Reserve to start raising interest rates next year for the first time next year since 2006. COMMODITIES The benchmark U.S. oil price dropped below $60 a barrel for the first time in more than five years, extending a losing streak as investors and traders brace for a global supply glut to worsen through next year. Brent crude, a gauge of global prices, also settled lower. Oil prices have plunged about 40% in nearly six months due to rising production in the U.S. and elsewhere. Selling accelerated late last month after the Organization of the Petroleum Exporting Countries opted to maintain its output target. "Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of Again Capital. "It's just a complete rout." On Thursday, prices rebounded briefly into positive territory following the release of better-than-expected U.S. retail sales data before falling again on the heels of a stronger dollar. Investors viewed $60 a barrel as a key psychological level for oil prices because it was a round number where traders had built up a significant position. Now that traders have pushed through that level, analysts say the next target for oil prices is $58 a barrel in the short term. Gold futures closed lower as upbeat U.S. economic data bolstered the dollar and fanned expectations of tighter monetary policy from the Federal Reserve. TODAY'S HEADLINES U.S. Oil Prices Drop Below $60 The benchmark U.S. oil price dropped below $60 a barrel for the first time in more-than five years, extending a losing streak as investors and traders brace for a global supply glut to worsen through next year. U.S. Retail Sales Jump as Consumers Gain Strength Americans stepped up spending last month on goods from cars to restaurant meals to gardening supplies, boosting hopes for a brisk holiday retail season and lifting the economy's outlook. In other data, weekly jobless claims fell and November import prices declined. China Adds Cash to Banking System China's central bank is pumping nearly $65 billion into the banking system in an effort to spur growth, even as its leaders express a willingness to accept a "new normal" of a slower economic pace. SEC Targets Risks at Fund Firms The Securities and Exchange Commission announced sweeping steps to address risks in the asset-management industry. Among the most significant ideas is a plan that would likely cause funds to curb their use of risky derivatives to boost returns. KFC China Moving to More Local Model Yum Brands is revamping its KFC chain in China as the restaurant company seeks to turn around its business in a market that has been reeling from food supplier issues. Toyota Takes Reins in Air Bags Investigation Toyota Motor is seizing the leadership in the auto industry's investigation of defective air bags by convening a meeting of car makers in the U.S. to discuss a joint investigation of faulty air bags made by Japan's Takata. Banks Fined Over Pursuit of Toys 'R' Us IPO Ten Wall Street banks were fined Thursday over how they hustled for business on an initial public offering, in a settlement that could reshape the role of banks' stock analysts in pitches for IPO work. Fannie, Freddie to Make Affordable-Housing Payments Fannie Mae and Freddie Mac's regulator ordered the companies to begin to make payments to affordable-housing funds next year, a move that will please low-income-housing supporters who have urged the decision for years while triggering the ire of some who think it will increase taxpayer risk. Spain's Publishers Forced to Charge Google News Google's announcement that it would pull the plug on the Spanish version of Google News in response to a restrictive copyright law is the first time the U.S. tech giant has removed a local version of its news aggregation service from any country. Sony to Sell PlayStation4 Consoles in China Sony said that it would begin selling its latest-generation PlayStation 4 videogame console in China starting next month, but it remained unknown whether the console would be region-locked. RECENT DJ DOMINANTS White House Held Call With Federal Agencies to Prepare for Possible Shutdown Warner Bros. Entertainment Names Kim Williams As Finance Chief Economists See Strong Growth in 2015 Ex-CIA Director Petraeus Says He Opposed Torture Momo CEO Says Will Be Profitable in 'Near Future' TODAY'S CALENDAR (Times in GMT, followed by country and event) 0030 AUS Oct Lending Finance 0200 NZ Nov NZ Government bonds held for non-residents 0200 SRI Dec Central Bank of Sri Lanka Monetary Policy Review announcement 0200 JPN Nov Electric Power Output 0430 JPN Oct Revised Retail Sales 0430 JPN Oct Revised Industrial Production 0530 CHN Nov Industrial Output 0530 CHN Nov Retail sales 0530 CHN Nov Fixed Assets Investment 0700 GER Nov WPI 0730 THA Weekly International Reserves 0745 FRA Oct Balance of Payments 0830 HK Q3 Quarterly Index of Industrial Production & Quarterly Producer Price Indices for Manufacturing Industries 0900 ITA Nov CPI 0900 FRA Dec IEA Oil Market Report 1000 EU Q3 Employment 1000 EU Oct Industrial Production 1130 IND Weekly foreign exchange reserves 1200 IND Oct IIP Index of Industrial Production 1200 IND Nov CPI rural, urban and combined 1330 US Nov PPI 1330 CAN Oct New motor vehicle sales 1500 US Dec Thomson Reuters / University of Michigan Survey of Consumers - preliminary 1900 CAN Bank of Canada Weekly Financial Statistics
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635094842
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635094842?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Halliburton to Lay Off 1,000 Workers Outside the U.S. Oil-Field Service Company Cuts Jobs as Oil Prices Plunge
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Dec 2014: n/a.
Abstract:
The job cuts, which are effective immediately, come less than a week after rival oil-field service company Schlumberger Ltd. announced it would reduce its headcount.
Full text: Halliburton Co., the world's second-largest oil-field services company, said Thursday it will lay off 1,000 employees outside the U.S. The Houston-based company is cutting its workforce in offices across Europe, Russia, the Middle East and Africa amidthat's. The job cuts, which are effective immediately, come less than a week after rival oil-field service company Schlumberger Ltd. announced it would reduce its headcount. Halliburton last month, Houston-based Baker Hughes Inc., in a deal valued at $35 billion. When Halliburton announced its plans three weeks ago, it said layoffs were not in the cards and that the merged companies would add thousands of new jobs in the coming year. The deal is still pending and must be approved by anti-trust regulators around the world. But oil prices, which have been falling since late June, have continued to slide lower since the Halliburton-Baker Hughes deal was announced. The U.S. benchmark oil price settled Thursday at $59.95 a barrel, a level not seen since 2009. "The decision to eliminate jobs is never easy. Our talented workforce is the foundation of everything we accomplish, and we place the highest value on the commitment and hard work that our employees dedicate to building our company," Halliburton said in a statement. "Yet, we believe these job eliminations are necessary in order to work through this market environment." Write to Dan Molinski at Credit: By Dan Molinski
Subject: Acquisitions & mergers; Oil service industry
Location: Russia United States--US Africa Europe Middle East
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 11, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635101093
Document URL: https://login.ezpro xy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635101093?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Halliburton to Lay Off 1,000 Workers Outside the U.S. Oil-Field Service Company Cuts Jobs as Oil Prices Plunge
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Halliburton and others are hired by big multinational oil companies, Texas wildcatters and government-controlled energy concerns overseas to drill and frack wells.
Full text: Halliburton Co., the world's second-largest oilfield-services company, said Thursday it will lay off 1,000 employees outside the U.S. The Houston company is cutting its workforce in offices across Europe, Russia, the Middle East and Africa in the face of a nearly 45% . The job cuts, which are effective immediately, come less than a week after the largest oilfield services company, Schlumberger Ltd., announced it would reduce its headcount. Halliburton employs 80,000 people in 80 countries, so the job cuts amount to 1% of its global workforce. Last month, Inc., in a deal valued at $35 billion. When those plans were made public Halliburton said that layoffs weren't coming and that the merged companies would add thousands of new jobs in the coming year. That deal is still pending and . Oil prices have been falling since late June, but in the three weeks since the Halliburton-Baker Hughes merger was announced price drops have accelerated. The U.S. benchmark oil price settled Thursday at $59.95 a barrel, a level not seen since 2009. Brent crude, considered the global oil benchmark price, settled Thursday at $63.68, down from a 2014 high of more than $115 a barrel. "The decision to eliminate jobs is never easy. Our talented workforce is the foundation of everything we accomplish, and we place the highest value on the commitment and hard work that our employees dedicate to building our company," Halliburton said in a statement. "Yet, we believe these job eliminations are necessary in order to work through this market environment." Oil-field service companies help energy producers explore for oil and gas. Halliburton and others are hired by big multinational oil companies, Texas wildcatters and government-controlled energy concerns overseas to drill and frack wells. These service firms sell and rent specialized equipment, operate drilling rigs and supply workers for oil-field sites, often offering it all in packages charged at a daily rate. For several years as oil prices increased the amount that oil-field service companies could charge for their expertise climbed. But drilling plans and ask for services at deep discounts. Halliburton's chief financial officer, Mark McCollum, told investors Wednesday that the company would make some job cuts but he didn't say how many. "We're already pulling in," he said, adding that he expected a $75 million restructuring charge during the fourth quarter "as we trim out some headcount and activities." Explaining the need for such measures, Mr. McCollum pointed to the depressed oil market, which is known for booms and busts. "It's not our first rodeo," he said. "We know how to do this." Write to Dan Molinski at Credit: By Dan Molinski
Subject: Petroleum industry; Workforce
Location: Russia United States--US Africa Europe Middle East
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635103851
Document URL: https://login.ezproxy.uta.edu/login?ur l=https://search-proquest-com.ezproxy.uta.edu/docview/1635103851?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mexico Offers First Oil Blocks to Private Firms; The 14 Exploratory Fields in the Gulf of Mexico Will Be Awarded in Mid-July
Author: Iliff, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--A year after changing laws to allow private firms back into the oil sector after 76 years of state control, Mexican officials on Thursday unveiled the first oil and gas blocks that will kick off next year's bidding round. Energy Ministry officials said they expect the blocks--14 exploratory fields in the Gulf of Mexico near the nation's top-producing fields--to generate solid interest among private firms. The exploratory areas are near two supergiant oil complexes in the southern Gulf--Cantarell and Ku-Maloob-Zaap--and have good possibilities of containing commercial quantities of oil and gas, they said. The bidding round for the shallow-water blocks is just the first part of a larger process that will unfold next year in what the Mexican government is calling Round One, even though it is really a series of bidding rounds starting in July and running through the end of the year. "We are fully aware that this bid round is taking place in the context of volatile markets for crude-oil prices that will force companies to be more selective in choosing the countries and projects where they will invest," Energy Minister Pedro Joaquín Coldwell said at an event attended by politicians and executives from private and foreign oil companies. Mexico is competitive in the current price environment, Mr. Coldwell added, since it offers "a highly diversified portfolio of fields and areas for exploration and production, clear and stable rules for investment, a modern energy reform incorporating international practices, qualified labor, infrastructure, moderate production costs and less geological risk." The 14 exploratory fields, to be awarded in mid-July, have prospective resources of 687 million barrels of oil equivalent, and together could produce about 80,000 barrels a day, said Juan Carlos Zepeda, the head of the National Hydrocarbons Commission which is in charge of the bidding process. Each of the fields is expected to require about $1 billion in investment. Prospective resources are rough estimates before exploratory wells are drilled and aren't comparable to proven or probable reserves where oil actually has been discovered. Should commercial quantities of oil be discovered in the exploratory blocks, the hydrocarbons commission will apply production-sharing contracts to divide up the oil between the private firms and a government fund, officials said. National oil company Petróleos Mexicanos, or Pemex, is also allowed to participate in the bid rounds under the same conditions as private firms. Officials didn't give out full details of the tax and royalty structure, since the government will determine a crucial element--the minimum percentage of the resources that the government will keep--closer to the bid round, said Deputy Finance Minister Miguel Messmacher. The government also provided other details industry officials have been awaiting to determine if the contracts would be competitive with others around the world, especially those in the U.S., which is considered to have one of the more favorable models for oil and gas development. For example, Mexican regulators said that winners of the exploratory blocks would need to meet national content requirements of 25% at the beginning of the contract and 35% in later years. National content includes Mexican goods, services and labor. The contract length for the first blocks will be 25 years, with two extensions of five years each if certain conditions are met, such as increasing investment. Oil firms must also meet a set of technical and financial requirements before they can bid, such as minimum capital requirements. Jose Valera, an energy lawyer at Mayer Brown in Houston, said one aspect of the contract terms that seems excessive is the requirement of having at least $1 billion in assets to bid on the shallow-water contracts announced Thursday. "To me, they are unnecessarily limiting the potential pool of operators coming in," Mr. Valera said. In contrast, the national content requirements and contract lengths seem more reasonable, he added. In early 2015, the government will announce the basic contract terms for mature fields where oil already has been discovered but production has fallen, unconventional resources like oil and gas found in shale rock, and in the deep waters of the Gulf of Mexico, an area considered highly attractive to international oil companies that operate on the U.S. side of the waterway. Credit: By Laurence Iliff
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635103915
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635103915?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop Spills Into Other Assets; Crude Falls Below $60 a Barrel, Pressuring Stocks and Oil-Linked Currencies
Author: Hong, Nicole; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action. Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis.
Full text: The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action. The decline in oil weighed on U.S. stocks on Thursday. The Dow Jones Industrial Average was up as much as 225 points on strong U.S. economic data before paring gains amid a renewed descent in crude. The blue-chip index ended up 63.19 points, or 0.4%, to 17596.34. Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis. The drop in crude oil comes as policy makers are grappling with low inflation and sluggish global growth, although it is proving to be a boon to consumers who are benefiting from the lower cost of gasoline and other fuels. Officials are concerned about the prospect of deflation, a damaging spiral of falling prices and slowing spending, in some regions of the world such as Japan and Europe. "I don't want to say this is Wall Street versus Main Street, but Main Street will see the positive effects in their pocketbooks while Wall Street's more focused on the clouds rather than the silver lining," said Drew Matus, an economist at UBS. Currencies of big oil exporters, from Norway to Russia to Mexico, hit multiyear lows against the dollar. London's FTSE 100 index, a large proportion of which is exposed to the oil and gas sector, fell 0.6%, while indexes in the Middle East, a big crude producer, took a dive. The front-month oil contract for January delivery fell 99 cents, or 1.6%, to settle at $59.95 a barrel, on the New York Mercantile Exchange, the lowest settlement level since July 2009, when the world was in the midst of recession. This year, oil has lost 39%. Although the U.S. doesn't export crude, its oil-output boom has helped drive economic growth since the crisis. The prospect of slowing investment into the energy sector helped offset some of the optimism spurred by better-than-expected November retail sales figures, which were released on Thursday. Energy companies have been the worst-performing sector in the S&P 500 over the past month, down 13% compared with a 0.2% decline for the broader index. And if gasoline prices fall too much, that could slow already-tepid inflation in the U.S. and potentially disrupt any plans by the Federal Reserve to raise interest rates next year, some economists said. Still, the impact of the decline in crude in the U.S. economy is limited. Energy investment accounts for 1% of U.S. growth, while consumer spending makes up 70%, according to UBS. Other countries face more difficult challenges. In response to oil's fall, Norway's central bank unexpectedly cut a key interest rate to 1.25% from 1.5%, its first rate cut since March 2012. As the world's second-biggest oil exporter outside of the Organization of the Petroleum Exporting Countries, Norway's economy is reliant on oil. Norges Bank, which made the move to combat slowing domestic growth, said "activity in the petroleum industry is set to be weaker than projected earlier." The rate cut sent the Norwegian krone to a five-year low against the euro and an 11-year low against the dollar. Russia, meanwhile, raised interest rates to shore up the ruble. The currency, which has repeatedly hit record lows against the dollar this year, has been battered by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months. About 50% of Russia's annual budget revenue stems from oil and gas exports. Tim Ash, head of emerging-market research for Standard Bank, said Russia was "a rabbit caught in the headlights." The central bank doesn't want to further spend down reserves by propping up the ruble and is only reluctantly raising rates for fear of pushing the economy deeper into recession, Mr. Ash said. Mexico's central bank intervened in currency markets to bolster the peso for the first time in 21/2 years. The action came just two days after the country reactivated an auction system to support the peso, which on Thursday dropped to its weakest level against the dollar since March 2009. Oil-related revenue makes up a significant part of Mexico's federal coffers, although oil accounts for less than 10% of the country's exports. In the Middle East, Dubai's market fell 7.4%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman declined 4.2%. Driving the decline in oil prices is a global supply glut, caused by the combination of rapidly rising production in the U.S. and elsewhere and modest demand growth. The decline in oil prices accelerated late last month after OPEC opted to maintain its output target. "Everything that's been weighing on oil continues to weigh on it, and there's been no relief," said John Kilduff, founding partner of asset manager Again Capital. "It's just a complete rout." Chiara Albanese and Anthony Harrup contributed to this article. Write to Nicole Hong at and Josie Cox at Credit: By Nicole Hong And Josie Cox
Subject: American dollar; Economic conditions; Recessions; Central banks; Petroleum industry
Location: Mexico United States--US Russia Norway
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635104078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635104078?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Japan Shares Rise as Oil Slips Further; Nikkei Gains, Oil Prices Continue Slide
Author: Deng, Chao; Frischkorn, Bradford
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
"There remains plenty of technical resistance at the 18000 Nikkei level, but forthcoming data, including U.S. [December] consumer sentiment [and] next week's Federal Open Market Committee meeting, will be critical to determining market direction."
Full text: Japan stocks finished higher Friday ahead of weekend elections that could boost support for Prime Minister Shinzo Abe's aggressive reform policies, although falling crude prices sapped strength from the region's markets, including in Australia. The Nikkei Stock Average rose 0.7% to 17371.58 Friday, although it still closed the week down 3.1%, its worst percentage fall since mid-October. Investors now look forward to Sunday's important lower house parliamentary elections, where the ruling government coalition is seen likely to retain its grip on power. Gains in Tokyo also came after Thursday with the help of better-than-expected data on U.S. consumer spending. "The recent three-day selloff put stocks back in 'affordable' territory after valuations had started to look stretched," said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities. "There remains plenty of technical resistance at the 18000 Nikkei level, but forthcoming data, including U.S. [December] consumer sentiment [and] next week's Federal Open Market Committee meeting, will be critical to determining market direction." An continued to batter energy stocks in Asia. The benchmark U.S. oil price , its lowest level since July 2009, and was last at $59.48. Australia's S&PASX 200, where major oil producers trade, was down 0.2%, at 5219.6 and 2.2% weaker for the week. The country's three biggest iron-ore producers were all lower, with BHP Billiton Ltd. down 1.9%, Rio Tinto Ltd. down 2.5% and Fortescue Metals Group down 2%. BHP's shares, which have also been hit by concerns over the impact of weaker oil prices on its petroleum division, dropped 6.4% over the course of the week. In Hong Kong, the Hang Seng Index was down 0.3% to 23249.20, after China's economy showed fresh signs of weakness in November--industrial output growth slid to a three-month low and investment extended its sluggish trend, according to data Friday. Still, stocks on the mainland were up after a volatile week where analysts have questioned the sustainability of a rally that has put the Shanghai Composite Index up 39% year to date. The index edged up 0.4% to 2938.17 Friday and closed flat for the week. Robb W. Stewart contributed to this article. Write to Chao Deng at and Bradford Frischkorn at Credit: By Chao Deng and Bradford Frischkorn
Subject: Petroleum industry; Stock exchanges; Financial performance
Location: Japan United States--US Australia
People: Abe, Shinzo
Company / organization: Name: Rio Tinto Group; NAICS: 212112, 212291; Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: Fortescue Metals Group; NAICS: 212210; Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635106219
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635106219?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Price Plunge Continues on Lower Demand Forecast; U.S. Oil Benchmark Remains Below $60 a Barrel
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Money managers, including hedge funds and pension funds, added 724 wagers on higher prices in the week using both futures and options contracts and cut 6,169 bets that prices would fall, according to the U.S. Commodity Futures Trading Commission.
Full text: Oil markets slid to new lows Friday after the International Energy Agency lowered its forecast for demand growth in 2015, the latest sign that the market could remain oversupplied well into next year. Concerns about a global oil glut have sent prices plunging more than 45% since mid-June, and the selloff has accelerated since the Organization of the Petroleum Exporting Countries decided last month to maintain its production quota. Falling oil prices are expected to boost economic growth, especially in large consuming nations, but they could threaten the economic health of oil producers and lead to lower investment in expensive drilling projects. The national average price of retail gasoline in the U.S. fell to $2.60 a gallon Friday, the lowest average since December 2009, according to AAA. The auto club expects prices to fall to $2.50 a gallon before Christmas. On Friday, the Paris-based IEA cut its forecast for 2015 oil demand growth by 230,000 barrels a day to 900,000 barrels a day. The energy watchdog has cut its demand-growth forecast five times in the last six months. "We've had a plunge in prices...and the IEA is still lowering the demand forecast," said Stephen Schork, editor of industry newsletter The Schork Report. For prices, "no one can tell you where the floor is right now." Light, sweet crude for January delivery fell $2.14, or 3.6%, to $57.81 a barrel on the New York Mercantile Exchange, the lowest settlement price since May 15, 2009. Prices slid 12.2% this week and are down 41% year-to-date. Brent, the global benchmark, fell $1.83, or 2.9%, to $61.85 a barrel on ICE Futures Europe, the lowest level since July 14, 2009. Prices are down 10.5% on the week and 44% on the year. OPEC and the U.S. Energy Information Administration also lowered their demand forecasts for 2015 this week. "The market really has nothing going for it right now--there's nothing encouraging," said Andy Lebow, senior vice president for energy at Jefferies LLC. "There's no prospect of near-term production cuts." The drop in oil prices has also hammered energy stocks and weakened the currencies of oil-producing nations, forcing some central banks to respond. Meanwhile, investors closed out bets that U.S. oil prices would fall in the week ended Tuesday, just before prices dropped to fresh lows, according to data released Friday. Money managers, including hedge funds and pension funds, added 724 wagers on higher prices in the week using both futures and options contracts and cut 6,169 bets that prices would fall, according to the U.S. Commodity Futures Trading Commission. The total number of outstanding contracts in the market was 2.3 million. Their aggregate wagers on rising prices, or net-long position, rose 3.7% in the week to 191,268 contracts, its highest level since Oct. 7, on the New York Mercantile Exchange. Some market participants said a growing speculative bet on rising prices means that prices could have further to fall, because prices aren't likely to reach a bottom until most of the speculative buyers are squeezed out. In other trading, January reformulated gasoline blendstock, or RBOB, settled down 2.71 cents, or 1.7%, at $1.5973 a gallon, the lowest settlement since May 5, 2009. Prices posted a 9.9% loss on the week. January diesel slid 4.54 cents, or 2.2%, to $2.0160 a gallon, the lowest price since August 2010. Prices fell 4.4% this week. Georgi Kantchev and Sarah Kent contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635156058
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635156058?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Markets Slide Further on Oil Shock; Currencies in Russia, Norway Fall to Multiyear Lows
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
"Falling oil prices have sparked weakness in the U.S. high-yield markets, which amid thin liquidity is intensifying volatility across fixed income assets," Barclays economists wrote in a note.
Full text: Oil's to spur global financial market losses on Friday, sending currencies in Russia and Norway to fresh multiyear lows and causing sharp losses to the major European equity indexes. 58 against the dollar for the first time on record, while Norway's krone hit a new five-year low against the euro and an 11-year low against the dollar. Brent crude and West Texas Intermediate settled below $58--both fresh 5½ year lows. The Stoxx Europe 600 index closed the session down 2.5%, with the European subindex of oil and gas companies falling 3.6%. London's FTSE 100, which has a very high exposure to the oil and gas sector, declined 2.5% and notched up its biggest weekly loss in around two years. However, losses were also heavy in the other core indexes, with the DAX in Frankfurt dropping 2.7% and the CAC-40 in Paris ending down 2.8%. In the U.S., the S&P 500 dropped more than 1% in late European trade. Russia's central bank on Thursday to 10.5% from 9.5%, and its deposit rate to 9.5% from 8.5%, in an effort to halt the ruble's slide. However, economists broadly agree such a move isn't enough. "In my view, the risk of a full-scale currency crisis is still high and the Bank of Russia may have to use all tools at its disposal to stem ruble rout," said Piotr Matys, a currency strategist at Rabobank. He said he had been expecting a 2.5-percentage-point increase in the key interest rate. "The decision taken proved insufficient." Strategists at Sberbank also said that they weren't convinced that the rate increase would have a significant impact. "Unless the Central Bank decides to step in with bolder actions, we wouldn't expect its policy adjustments to alter the ruble's trajectory," they write in a note. The ruble was battered earlier this year by geopolitical conflict and resulting sanctions, but its decline has been exacerbated in recent months by the oil-price shock, especially after the 12-member Organization of the Petroleum Exporting Countries last month rejected calls for drastic action to cut their output. Around 50% of Russia's annual budget revenue stems from oil and gas exports. Also on Thursday, Norges Bank to 1.25% from 1.5% to combat slowing domestic growth, specifically citing the tanking price of oil. Norway is Europe's biggest crude exporter and Norges Bank said that "activity in the petroleum industry is set to be weaker than projected earlier." The negative tone was also starting to seep into the debt markets, too. "Falling oil prices have sparked weakness in the U.S. high-yield markets, which amid thin liquidity is intensifying volatility across fixed income assets," Barclays economists wrote in a note. Robert Montague, a senior investment analyst at ECM Asset Management, with is owned by Wells Fargo and has around $9.5bn of assets under management, says that contingent capital bonds issued by banks were starting to sell off particularly aggressively. So-called cocos are generally considered the riskiest forms of bank debt. The CBOE Volatility Index, commonly considered a fear gauge of financial markets, rose 8% overnight, reflecting investors' appetite for assets seen as safest during times of stress. The yield on German 10-year government bonds hit a record low of 0.631%. Yields fall when prices rise. Beyond oil, lasting jitters stemming from political uncertainty in Greece also pressured equities. Earlier in the week, the Greek government announced that the parliament would on Dec. 17--two months ahead of schedule--to replace Karolos Papoulias, whose five-year term was slated to end in March. The move sparked fears that Greece's radical left opposition Syriza party if presidential voting rounds failed to find a solution acceptable to all. "We wouldn't rule out the possibility that mainstream parties can cobble together the majority needed to win support for a presidential candidate. Nevertheless, the political outlook for Greece remains highly fraught," Citigroup economists write in a note. Athens's main stock exchanged tumbled 7% on Thursday having already closed around 12% lower during Wednesday's session. On Friday it ended the session an additional 0.4% lower. The yield on the country's 10-year government bond stood at 9% late Friday. Only earlier this week, it was around 7.2%. In currency markets, the euro was around 0.6% higher against the dollar at around $1.2445, marginally higher after figures showed that factory output across the 18 countries that share the euro in October, albeit at a modest pace. Employment and industrial production, however, remain well below their precrisis levels and there is no sign the eurozone's recovery is set to accelerate to a pace that would quickly create large numbers of new jobs, or end a long period of very low inflation. Many analysts expect the European Central Bank to announce a government bond purchase plan to stimulate the recovery as early as Jan. 22, when it next meets. That prospect was reinforced by weak demand for the ECB's second installment of a four-year lending program for banks, results for which were published Thursday. "Industrial confidence has improved a bit in the eurozone, however, with the economy running well below capacity and inflation likely to fall further, we continue to look for a major quantitative easing announcement in January," currency strategists at BNP Paribas wrote in a note. They also reiterated their recommendation of selling the euro against both the U.S. dollar and the British pound. Paul Hannon contributed to this article Write to Josie Cox at Credit: By Josie Cox
Subject: Petroleum industry; Securities markets; Currency; Energy industry; Natural gas utilities
Location: Norway Russia
People: Papoulias, Karolos
Company / organization: Name: Afren PLC; NAICS: 324110, 211111; Name: Genel Energy PLC; NAICS: 211111; Name: Norges Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635169505
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635169505?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Plunging Oil Prices Won't Dent Supply in Short Term; International Energy Agency Provides Little Relief for Oil Bulls in Its Monthly Report
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
According to the IEA, the oil-producers' group cut its oil production by 315,000 barrels a day in November, largely due to .
Full text: The International Energy Agency slashed its forecast for global oil demand growth for the fifth time in the last six months on Friday and said the current slide in prices won't dent global supply or hit demand, at least in the short term. Despite a slide of since June, the Paris-based energy watchdog said it still expects a robust increase in production from nations outside the Organization of the Petroleum Exporting Countries next year. "Barring a disorderly production response, it may well take some time for supply and demand to respond to the price rout," the IEA said in its closely watched monthly report on the oil market. following the IEA's bearish forecasts, hitting levels not seen since the depth of the global recession in 2009. Brent for January delivery was down 0.8% at $63.22 on the Intercontinental Exchange in London, while WTI was down 0.7% at $59.23 in electronic trading on the New York Mercantile Exchange. The IEA forecast that world oil demand will increase by 900,000 barrels a day in 2015, a downward revision of 230,000 barrels a day from the previous report and only a modest increase from this year's increase in demand of 700,000 barrels a day, its weakest in five years. Ordinarily, lower prices should encourage greater consumption, but the pain that oil-exporting economies are already feeling because of the price slump, combined with a sluggish global economy, is expected to offset any positive demand impact from the weak market, the IEA said. Demand in Russia, a major oil producer, is expected to be particularly hard hit next year as a combination of western sanctions and sliding oil prices pummel the country's economy. Meanwhile, although oil companies are already slashing spending in response to lower prices, many of the projects expected to fuel higher production next year have already been paid for, pushing any impact on output into the future, the IEA said. In the U.S., where are coming under intense scrutiny as oil prices plummet, there should be no production impact in the short term so long as producers maintain access to financing, the IEA said. Booming shale oil output is expected to push non-OPEC supply growth to a record high of 1.9 million barrels a day this year and though that will slow next year to 1.3 million barrels a day, that is not because of the lower price environment. "Today's oil spending cuts will dent supply--just not right now," the IEA said, though it added that a deeper slide in prices could set back many producers. A time-lag before oil companies respond to lower prices with weaker production may increase pressure on OPEC to cut its oil supply. The cartel last month decided to bolster the market. According to the IEA, the oil-producers' group cut its oil production by 315,000 barrels a day in November, largely due to . However, at 30.3 million barrels a day, OPEC's output remained comfortably above its agreed output ceiling of 30 million barrels a day, despite weakening demand for its oil. Georgi Kantchev contributed to this article. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Petroleum industry; Supply & demand; Recessions; Crude oil prices; Petroleum production
Company / organization: Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635193263
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635193263?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shares Knocked Off Highs on Oil Concerns --- Dow Industrials Still End Higher After Solid Consumer-Spending Data; 'Stocks Have Been Choppy'
Author: Driebusch, Corrie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.4.
Abstract:
"The initial assessment of both OPEC and the EIA is that falling oil prices are not expected to increase global oil demand nor to significantly cut non-OPEC supply," said analysts at brokerage PVM in a note.
Full text: U.S. stocks snapped a three-day losing streak with help from stronger-than-expected data on consumer spending. However, a renewed slump in oil prices at midafternoon took the wind out of the stock market's sails, leaving broad market benchmarks finishing the day well below their session highs. The Dow Jones Industrial Average climbed 63.19 points, or 0.4%, to 17596.34. Earlier in the session, the blue-chip index rose as many as 225 points. The S&P 500 added 9.19 points, or 0.5%, to 2035.33, and the Nasdaq Composite rose 24.14 points, or 0.5%, to 4708.16. Thursday's gains marked a reversal from the previous session's selloff that saw the Dow industrials post their biggest one-day loss in two months. In recent sessions, stocks have had difficulty sustaining big moves upward or downward. "Stocks have been choppy," said Quincy Krosby, market strategist at Prudential Financial. "Either the market today is leading us into the second half of December, which typically is a strong period for stocks, or we may have a little more consolidation to go before we get the Santa Claus rally." On Thursday, stocks rallied out of the gate, thanks to news showing Americans increased their shopping last month. U.S. retail sales rose 0.7% in November from a month earlier. Economists surveyed by The Wall Street Journal had expected overall sales to rise 0.4%. But stocks' gains faded as the price of oil fell below $60 for the first time since July 2009. The benchmark U.S. oil price settled 1.6% lower at $59.95 a barrel. Many energy stocks, which have taken a beating in recent months, held up in the face of the new slide in crude prices. The S&P 500 energy index ended the day up less than 0.1%. Still, energy stocks are down 19% over the past three months. Investors noted that the good news on retail sales suggested consumers likely benefited from the lower cost of oil, and many say the benefits should continue to reverberate through the U.S. economy. Investors viewed $60 a barrel as a key psychological level for oil prices because it is a round number where traders had built up a significant position. Now that traders have pushed through that level, analysts say the next target for oil prices is $58 a barrel in the short term. "If you're an oil bull, you really have nothing to hang your hat on for more than a few blips here and there," said Kyle Cooper, managing director of research at consulting firm IAF Advisors. "I don't think prices are done going down yet." Both the U.S. Energy Information Administration and the Organization of the Petroleum Exporting Countries cut their 2015 demand forecasts in reports released this week. The International Energy Agency is due to release its own forecast Friday. "The initial assessment of both OPEC and the EIA is that falling oil prices are not expected to increase global oil demand nor to significantly cut non-OPEC supply," said analysts at brokerage PVM in a note. "The near future looks bleak and oversupplied." Gasoline futures fell 1.1%, or 1.74 cents, to $1.6244 a gallon. Diesel gained 0.7%, or 1.5 cents, to $2.0614 a gallon. Consumer-discretionary shares rallied on the positive retail-sales data, with the sector up 0.7%. "In essence, a decline in prices at the pump represents an increase in consumers' discretionary take-home pay, and it shouldn't be surprising that you should start seeing stronger retail sales," said Burns McKinney, portfolio manager at NFJ Investment Group, which manages about $41 billion. "Where you should see it the most is Wal-Mart or Costco, where sales are competing for the incremental or marginal dollar to a greater degree than some of the luxury retailers." Shares of Wal-Mart Stores rose 85 cents, or 1%, to $83.83, and those of Costco Wholesale gained 1.16, or 0.8%, to 141.41. European stocks were flat, with the Stoxx Europe 600 down just a fraction of a point. The yield on the 10-year Treasury note rose to 2.178%, from 2.169% on Wednesday. Yields rise as prices fall. The U.S. dollar strengthened against the yen and the euro. In corporate news, shares of Staples jumped 1.29, or 8.7%, to 16.10 after Starboard Value disclosed in filings that it has built roughly a 6% stake in the company. The activist investor also boosted its position in Office Depot to about 10%. Shares of Office Depot rose 82 cents, or 12%, to 7.54. Overseas early Friday, Japan's Nikkei was up 1.3%, Hong Kong's Hang Seng Index was down 0.4%, the Shanghai Composite Index was up 0.8%, Australia's S&P/ASX 200 was down 0.2% and South Korea's Kospi was up 0.3%. --- Nicole Hong contributed to this article.
Credit: By Corrie Driebusch
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 12, 2014
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banki ng And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635203443
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203443?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Falling Oil Prices Imperil Africa's Growth --- Currencies Plummet Alongside Energy Revenue; Governments Fear Cheaper Cost of Crude Will Choke New Investments
Author: McGroarty, Patrick; Hinshaw, Drew; Stevis, Matina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: A.9.
Abstract:
Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields.
Full text: Plunging oil prices are threatening Africa's economic ascent. Recent oil and gas discoveries were hailed as a godsend for African nations aspiring to middle-income status. But billions of investment dollars are moving into projects just as crude prices have tumbled, raising fears that some may be put on hold. Total SA, Exxon Mobil Corp. and other companies are at work on a $16-billion oil project in Angola that will be profitable only if oil prices average more than $70 a barrel, Citigroup analysts estimate. The price of Brent crude closed at a new five-year low on Thursday, falling nearly 1%, or 56 cents, to $63.68 a barrel. Anadarko Petroleum Corp. and Eni SpA have spent more than $5 billion developing natural-gas fields in Mozambique that threaten to become much less profitable if global supply expands too rapidly. Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields. Cheaper fuel will help many African countries suppress inflation by keeping energy import costs down. But the continent's biggest economies have staked their futures on robust prices for oil and gas. Pumping high-price crude has generated rapid economic growth and spending that spilled across borders. Now, those flows are set to slow sharply. Capital Economics says falling commodity prices will cut growth across sub-Saharan Africa by one percentage point next year, to around 4%, the slowest rate since the late 1990s. "It's bad for all of Africa," said Jack Allen, an economist at the research firm. Nigeria is a case in point. Africa's top economy and crude producer has grown 7% a year for the past decade. As retail and telecommunications companies have taken off, the oil industry has shrunk to a more balanced 14% of economic activity. But Nigeria's government revenue hasn't evolved with its economy. Oil still fuels more than 70% of the budget, leaving public institutions dependent on the ebb and flow of global energy prices. As Brent crude prices fell below $70 a barrel this month, Nigeria's naira currency plummeted to record lows. Nigeria's Finance Minister Ngozi Okonjo-Iweala says the drop in oil prices could drag economic growth down by a percentage point to 5.3% in 2015. Earlier this month, the central bank raised interest rates to draw back investors as the currency fell. The higher rates will now make it more expensive for the government to borrow. Now Ms. Okonjo-Iweala is scrounging for new revenue to hold elections in February and fight the Islamist insurgency Boko Haram. She plans to raise taxes on yachts, private planes and sparkling wine. She has said she may even impose a mansion tax -- small steps toward filling a big hole. "Undoubtedly, it's going to be tough times," she said. Cheaper oil is also complicating nearby Ghana's efforts to dig out from deep trade and budget deficits. Ghana's cedi currency was tumbling even before oil prices started dropping. In August, the country requested a bailout from the International Monetary Fund that could be worth around $500 million. Ghana is set to nearly double oil production from around 100,000 barrels a day to 190,000 by 2016 -- output the government hoped would finance road, power and port expansions to help the economy grow. Now it isn't clear where that revenue will come from. Countries along Africa's Indian Ocean coast fear oil and natural-gas projects that have drawn more than $25 billion to the region over the past five years could look less attractive as energy prices fall. Officials in Mozambique are speeding up legislation backing natural-gas projects by Texas-based Anadarko Petroleum and Italy's Eni. The Anadarko project alone could add more than $30 billion to the country's gross domestic product by 2035, according to Johannesburg-based Standard Bank Ltd. "The recent fall in oil prices seems to be increasing the sense of urgency to close the deal," said Paul Eardley-Taylor, Standard Bank's head of oil and gas for southern Africa. The head of Anadarko's business in Mozambique didn't respond to requests for comment, and an Eni spokesman declined to comment. Exxon Mobil referred questions about the Angolan project to Total, its partner in the development, which also declined to comment. A Tullow Oil spokesman in London said the company has no plans to change its investment plans in Uganda or elsewhere in Africa. "We believe that such fluctuations in the oil price do not fundamentally change the value of these projects," said spokesman George Cazenove. --- Nicholas Bariyo and Inti Landauro contributed to this article. Credit: Patrick McGroarty, Drew Hinshaw, Matina Stevis
Subject: Economic impact; Crude oil; Petroleum production; Gasoline prices
Location: Africa
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Anadarko Petroleum Corp; NAICS: 211111
Classification: 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2014
Publication date: Dec 12, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635203472
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203472?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop Spills Into Other Assets --- Junk-Bond Funds See Large Outflow As Investors Run From Risky Debt
Author: Burne, Katy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.1.
Abstract:
Tremors from the slide in oil prices that initially hit energy bonds now are being felt across the broader $1.3 trillion junk-bond market, investors and analysts said, causing hesitation among would-be buyers and a hurried reshuffling of bond portfolios as funds look to raise cash to meet redemptions.
Full text: Corrections & Amplifications PetroCap is an oil-and-gas fund that is in partnership with Highland Capital Management. A Money & Investing article Friday about outflows from junk-bond funds incorrectly said PetroCap is owned by Highland. (WSJ Dec. 18, 2014) Investors pulled nearly $1.9 billion from funds dedicated to low-rated corporate bonds in the past week, extending a retreat from risky debt amid a free fall in the price of crude oil. The outflow is the largest weekly decline since the $2.3 billion withdrawal registered in the week ended Oct. 1, and follows $859 million that flowed out the week ended Dec. 3, according to fund tracker Lipper. Tremors from the slide in oil prices that initially hit energy bonds now are being felt across the broader $1.3 trillion junk-bond market, investors and analysts said, causing hesitation among would-be buyers and a hurried reshuffling of bond portfolios as funds look to raise cash to meet redemptions. "Everyone is just selling," said Lane Britain, managing director at PetroCap, an oil-and-gas fund owned by Highland Capital Management. Investors are selling junk bonds at the fastest clip in 18 months, according to data from Barclays PLC, and many are worried the upheaval could become a catalyst for more lasting weakness in high yield, particularly if growth slows or individual investors get spooked and see a reason to pull more of their money. "Energy is falling out of bed and will drive the entire market lower," said Riaz Haidri, head of high yield at broker dealer Cantor Fitzgerald & Co. The selling constitutes the third major reassessment of junk-rated debt this year and follows criticism from analysts and regulators that the yield investors could earn on the debt had fallen too low. Previous retreats in July and in mid-October were characterized by large-scale selling as individual investors pulled their money, leaving large institutions to buy the debt at deep discounts. The risk for junk-bond buyers is that the market continues to stumble and many of those investors remain wary of stepping in too early, in case the market registers another big decline. The oil rout has put a dent in issuance volumes, causing a handful of energy companies to delay or cancel their borrowing plans. U.S. oil prices hit $59.95 a barrel on Thursday, the lowest since July 2009. The drawdowns signal a growing wariness about owning risky debt, following a slide in oil prices that has left investors worried about energy's trickle-down effect on the economy. Energy bonds constitute 14% of the U.S. high-yield bond market. This week, even nonenergy high-yield bonds have been hit as investors rushed to sell whatever debt they could to raise cash. Goldman Sachs Group Inc. is forecasting further downside in prices and lingering price volatility. It is a bad time to see weakness in high yield: Dealer middlemen, who traditionally cushioned any selling pressure, have been re-evaluating their willingness to buy and sell bonds for their clients since the financial crisis and they have been especially reluctant to step in around year-end, raising costs for investors trying to complete trades. In the week following bond market tumult on Oct. 15, dealer stockpiles of high-yield corporate bonds called "inventories" dipped below one-fifth of their average for the year, according to data from the Federal Reserve Bank of New York. (See related article: "Crude Falls Below $60 a Barrel, Pressuring Stocks in U.K., Middle East; Oil-Linked Currencies Sink" -- WSJ December 12, 2014)
Credit: By Katy Burne
Subject: High yield investments; Bond markets; Junk bonds
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 12, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635203486
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203486?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop Spills Into Other Assets --- Crude Falls Below $60 a Barrel, Pressuring Stocks in U.K., Middle East; Oil-Linked Currencies Sink
Author: Hong, Nicole; Cox, Josie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Dec 2014: C.1.
Abstract:
The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action. Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis.
Full text: The benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years, intensifying the pain across financial markets and jolting the central banks of some oil-dependent economies into action. The decline in oil weighed on U.S. stocks on Thursday. The Dow Jones Industrial Average was up as much as 225 points on strong U.S. economic data before paring gains amid a renewed descent in crude. The blue-chip index ended up 63.19 points, or 0.4%, to 17596.34. Stocks of oil-producing companies and currencies of oil-exporting countries dropped as investors braced for sharply lower revenue, a result of the fastest selloff in oil prices since the 2008 financial crisis. The drop in crude oil comes as policy makers are grappling with low inflation and sluggish global growth, although it is proving to be a boon to consumers who are benefiting from the lower cost of gasoline and other fuels. Officials are concerned about the prospect of deflation, a damaging spiral of falling prices and slowing spending, in some regions of the world such as Japan and Europe. "I don't want to say this is Wall Street versus Main Street, but Main Street will see the positive effects in their pocketbooks while Wall Street's more focused on the clouds rather than the silver lining," said Drew Matus, an economist at UBS. Currencies of big oil exporters, from Norway to Russia to Mexico, hit multiyear lows against the dollar. London's FTSE 100 index, a large proportion of which is exposed to the oil and gas sector, fell 0.6%, while indexes in the Middle East, a big crude producer, took a dive. The front-month oil contract for January delivery fell 99 cents, or 1.6%, to settle at $59.95 a barrel, on the New York Mercantile Exchange, the lowest settlement level since July 2009, when the world was in the midst of recession. This year, oil has lost 39%. Although the U.S. doesn't export crude, its oil-output boom has helped drive economic growth since the crisis. The prospect of slowing investment into the energy sector helped offset some of the optimism spurred by better-than-expected November retail sales figures, which were released on Thursday. Energy companies have been the worst-performing sector in the S&P 500 over the past month, down 13% compared with a 0.2% decline for the broader index. And if gasoline prices fall too much, that could slow already-tepid inflation in the U.S. and potentially disrupt any plans by the Federal Reserve to raise interest rates next year, some economists said. Still, the impact of the decline in crude in the U.S. economy is limited. Energy investment accounts for 1% of U.S. growth, while consumer spending makes up 70%, according to UBS. Other countries face more difficult challenges. In response to oil's fall, Norway's central bank unexpectedly cut a key interest rate to 1.25% from 1.5%, its first rate cut since March 2012. As the world's second-biggest oil exporter outside of the Organization of the Petroleum Exporting Countries, Norway's economy is reliant on oil. Norges Bank, which made the move to combat slowing domestic growth, said "activity in the petroleum industry is set to be weaker than projected earlier." The rate cut sent the Norwegian krone to a five-year low against the euro and an 11-year low against the dollar. Russia, meanwhile, raised interest rates to shore up the ruble. The currency, which has repeatedly hit record lows against the dollar this year, has been battered by geopolitical tensions and resulting sanctions, but its decline has been exacerbated in recent months. About 50% of Russia's annual budget revenue stems from oil and gas exports. Tim Ash, head of emerging-market research for Standard Bank, said Russia was "a rabbit caught in the headlights." The central bank doesn't want to further spend down reserves by propping up the ruble and is only reluctantly raising rates for fear of pushing the economy deeper into recession, Mr. Ash said. Mexico's central bank intervened in currency markets to bolster the peso for the first time in 2 1/2 years. The action came just two days after the country reactivated an auction system to support the peso, which on Thursday dropped to its weakest level against the dollar since March 2009. Oil-related revenue makes up a significant part of Mexico's federal coffers, although oil accounts for less than 10% of the country's exports. In the Middle East, Dubai's market fell 7.4%. The main index in Abu Dhabi dropped 4.7%, Qatar slid 4.3% and Oman declined 4.2%. Driving the decline in oil prices is a global supply glut, caused by the combination of rapidly rising production in the U.S. and elsewhere and modest demand growth. The decline in oil prices accelerated late last month after OPEC opted to maintain its output target. --- Chiara Albanese and Anthony Harrup contributed to this article. (See related article: "Junk-Bond Funds See Large Outflow As Investors Run From Risky Debt" -- WSJ December 12, 2014) Credit: By Nicole Hong and Josie Cox
Subject: Crude oil; Dow Jones averages; Economic conditions -- United States--US
Location: United States--US
Classification: 9190: United States; 8510: Petroleum industry; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 12, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635203514
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635203514?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Tumble; Dow Falls More Than 300 Points; Drop in Oil Prices Revives Growth Concerns
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Highlighting the weakness in economies outside of the U.S. on Friday was the latest report from the International Energy Agency, which cut its estimate for global oil-demand growth. The drop in oil prices should give consumers and companies a break on energy costs, said Will Braman, chief investment officer at Waltham, Mass. wealth management firm Ballentine Partners, which oversees $5 billion.
Full text: U.S. stocks closed Friday with their biggest weekly decline in years, as the sustained drop in oil prices revived growth concerns. The Dow Jones Industrial Average slid 315.51 points, or 1.8%, to 17280.83. For the week, the Dow has lost 3.8%, the biggest weekly loss in percentage terms since 2011, when an unusually severe winter in the U.S. tamped growth. Highlighting the weakness in economies outside of the U.S. on Friday was the latest report from the International Energy Agency, which cut its estimate for global oil-demand growth. The benchmark U.S. oil price settled 3.6% lower at $57.81 a barrel. Investors fret that the 46% plunge in oil prices since June could be signaling that the global economy is slowing more quickly than data currently suggest. Growth in China, a major energy importer, has been slowing. The continued slide in oil prices also exacerbates worries about deflation in Europe and Japan, where policy makers are grappling with low inflation amid sluggish growth. Worried that the slowdown could spill over into the U.S., money managers on Friday sold stocks and piled into relatively safe assets such as Treasurys. "We have increasing concerns about the global drag on the U.S. economy," said Jerry Braakman, chief investment officer of First American Trust, which manages $1.1 billion. Mr. Braakman said he refrained from buying stocks during this week's losses, unlike previous selloffs this year, when he stepped in. "This time, there is some reason for...fear," he said. "If global growth continues to spiral [lower], there could be a correction in the U.S. if we get dragged in." The S&P 500 declined 33.00 points, or 1.6% to 2002.33, for its biggest weekly loss since 2012. The Nasdaq Composite Index fell 54.57 points, or 1.2%, to 4653.60. Treasury prices staged their biggest weekly rally since 2012, pushing down the yield on the 10-year note to 2.102%. Strategists and investors said stocks were vulnerable to bad news after a seven-week rally that took major U.S. benchmarks to record highs. "It's been a really healthy rally in U.S. stocks," said Michael Fredericks, who manages $9.9 billion in the BlackRock Multi-Asset Income Fund. "Valuations are expensive...and probably will stay expensive, as long as growth in the U.S. is superior to most other global markets." Mr. Fredericks has been buying risky assets during the selloff--but since he deems stocks pricey, he is picking up high-yield bonds instead. That sector has sold off recently, as investors fret about potential defaults from energy companies with high levels of debt. Other indicators also spooked traders. China on Friday reported lower-than-expected industrial production figures. The materials sector, which is closely tied to global economic growth, posted the steepest declines to close with a 2.9% loss. "People are worried about what the collapse in crude oil shows about global demand," said Colin Cieszynski, senior market analyst with CMC Markets. The persistent decline in oil prices sparked losses in the stocks of international oil producers. The Stoxx Europe 600 fell 2.6%, with the subindex of oil and gas companies staging the most severe declines. The currencies of Russia and Norway, both oil producers, were also under pressure. Even with Friday's declines, the S&P 500 closed less than 4% below its record highs hit earlier this month. It had rallied 10% over the past seven weeks. And many investors point out that the U.S. economy, powered largely by its own consumers, could continue to hold up amid global weakness. The drop in oil prices should give consumers and companies a break on energy costs, said Will Braman, chief investment officer at Waltham, Mass. wealth management firm Ballentine Partners, which oversees $5 billion. "The fact that oil has come down so much makes us more optimistic on the world at large," said Mr. Braman. "I don't see why I would be taking risk off the table if I'm more optimistic on growth." Consumer stocks outperformed the S&P 500 Friday, after a better-than-expected reading of consumer sentiment. The University of Michigan/Thomson Reuters consumer sentiment gauge rose to 93.8 from November's final reading of 88.8, above forecasts for 90.0. On Thursday, stocks gained after the Commerce Department said that retail sales climbed 0.7% in November, the biggest jump in eight months. Falling oil prices have weighed down inflation, a key metric for the Federal Reserve in its interest-rate decisions. Strategists say that low interest rates in the U.S. have helped support the yearslong bull market in stocks. Investors are looking ahead to the Fed's meeting next week to determine the outlook for short-term interest rates. On Friday, the Labor Department reported that a measure of U.S. inflation fell slightly more than expected. The producer-price index fell 0.2% in November, while a drop of 0.1% was forecast. Excluding volatile food and energy costs, producer prices were unchanged, while economists had expected a rise of 0.1%. In Asia, Japan's Nikkei Stock Average gained 0.7% ahead of a weekend election that is expected to serve as a referendum on Prime Minister Shinzo Abe 's efforts to spur on economic growth. Gold futures slipped 0.3% to $1222.00 an ounce. In corporate news, MetLife Inc. shares fell 4.2% after it made another move to shore up its capital reserves, as it expects to soon be subject to stiffer capital rules from regulators. The company said it would buy back another $1 billion of shares. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Petroleum industry; Prices; Stocks; Economic indicators; Financial executives; Energy industry; Natural gas utilities
Location: United States--US China
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635252212
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635252212?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fall in Oil Prices Threatens Africa's Economic Growth; Drop in Cost of Crude Depresses Currencies, Energy Revenues
Author: McGroarty, Patrick; Hinshaw, Drew; Stevis, Matina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Total SA, Exxon Mobil Corp. and other companies are at work on a $16-billion oil project in Angola that will be profitable only if oil prices average more than $70 a barrel, Citigroup analysts estimate. Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields.
Full text: Plunging oil prices are threatening Africa's economic ascent. Recent oil and gas discoveries were hailed as a godsend for African nations aspiring to middle-income status. But billions of investment dollars are moving into projects just as crude prices have tumbled, raising fears that some may be put on hold. Total SA, Exxon Mobil Corp. and other companies are at work on a $16-billion oil project in Angola that will be profitable only if oil prices average more than $70 a barrel, Citigroup analysts estimate. The price of Brent crude closed at a new five-year low on Thursday, falling nearly 1%, or 56 cents, to $63.68 a barrel. Anadarko Petroleum Corp. and Eni SpA have spent more than $5 billion developing natural-gas fields in Mozambique that threaten to become much less profitable if global supply expands too rapidly. Ugandan officials say they fear lower oil prices could deter companies, including Tullow Oil PLC and China's Cnooc Ltd., from following through on plans to invest up to $15 billion to develop the country's oil fields. Cheaper fuel will help many African countries suppress inflation by keeping energy import costs down. But the continent's biggest economies have staked their futures on robust prices for oil and gas. Pumping high-price crude has generated rapid economic growth and spending that spilled across borders. Now, those flows are set to slow sharply. Capital Economics says falling commodity prices will cut growth across sub-Saharan Africa by one percentage point next year, to around 4%, the slowest rate since the late 1990s. "It's bad for all of Africa," said Jack Allen, an economist at the research firm. Nigeria is a case in point. Africa's top economy and crude producer has grown 7% a year for the past decade. As retail and telecommunications companies have taken off, the oil industry has shrunk to a more balanced 14% of economic activity. But Nigeria's government revenue hasn't evolved with its economy. Oil still fuels more than 70% of the budget, leaving public institutions dependent on the ebb and flow of global energy prices. As Brent crude prices fell below $70 a barrel this month, Nigeria's naira currency plummeted to record lows. Nigeria's Finance Minister Ngozi Okonjo-Iweala says the drop in oil prices could drag economic growth down by a percentage point to 5.3% in 2015. Earlier this month, the central bank raised interest rates to draw back investors as the currency fell. The higher rates will now make it more expensive for the government to borrow. Now Ms. Okonjo-Iweala is scrounging for new revenue to hold elections in February and fight the Islamist insurgency Boko Haram. She plans to raise taxes on yachts, private planes and sparkling wine. She has said she may even impose a mansion tax--small steps toward filling a big hole. "Undoubtedly, it's going to be tough times," she said in an interview. Cheaper oil is also complicating nearby Ghana's efforts to dig out from deep trade and budget deficits. Ghana's cedi currency was tumbling even before oil prices started dropping. In August, the country requested a bailout from the International Monetary Fund that could be worth around $500 million. To meet the IMF's terms, Ghana is taxing oil at the pump, which Ghanaians won't notice, since the tax is being rolled in as prices fall. But the long-term picture is murkier. Ghana is set to nearly double oil production from around 100,000 barrels a day to 190,000 by 2016--output the government hoped would finance road, power and port expansions to help the economy grow. Now it isn't clear where that revenue will come from. "We are woefully short," said Sydney Casely-Hayford, a financial consultant and former adviser to Ghana's treasury. Countries along Africa's Indian Ocean coast fear oil and natural-gas projects that have drawn more than $25 billion to the region over the past five years could look less attractive as energy prices fall. Officials in Mozambique are speeding up legislation backing natural-gas projects by Texas-based Anadarko Petroleum and Italy's Eni. The Anadarko project alone could add more than $30 billion to the country's gross domestic product by 2035, according to Johannesburg-based Standard Bank Ltd. "The recent fall in oil prices seems to be increasing the sense of urgency to close the deal," said Paul Eardley-Taylor, Standard Bank's head of oil and gas for southern Africa. The head of Anadarko's business in Mozambique didn't respond to requests for comment, and an Eni spokesman declined to comment. Exxon Mobil referred questions about the Angolan project to Total, its partner in the development, which also declined to comment. A Tullow Oil spokesman in London said the company has no plans to change its investment plans in Uganda or elsewhere in Africa. "We believe that such fluctuations in the oil price do not fundamentally change the value of these projects," said spokesman George Cazenove. East African neighbors Kenya and Tanzania have signed exploration and extraction deals with Tullow as well as Statoil ASA, Exxon Mobil and others on the heels of substantial discoveries. But until those projects start pumping fuel, both countries remain net energy importers. That's not a bad spot to be in as oil prices are sinking. Many governments spend billions of dollars a year subsidizing fuel prices for their citizens. High oil prices can push up inflation and the portion of meager incomes that many Africans devote to the fuel they depend on for transport and cooking. Citing the global oil-price slump, Tanzania cut the price of gasoline, diesel and kerosene last week by about 7%. But for countries banking on large oil projects, such benefits will be wiped out if prospective investors pause or retreat from exploration and production plans. "With decreasing oil prices, companies will now have to examine the opportunity costs even more so with respect to new frontier markets," says Ahmed Salim, a Dubai-based senior associate at Teneo Intelligence consultancy. Falling prices for oil and other commodities are hurting African economies in other ways, too. South Africa's central bank said Monday that falling fuel prices cut the country's import bill in the third quarter. But slack demand from China and Europe is pushing down the price of many minerals and crops, in addition to oil. That dragged down South Africa's gold and iron exports from the previous quarter. As a result, South Africa's current-account deficit was wider than expected, sending South Africa's currency to a six-year low as investors retreated from the slowing economy. Persistent weakness in the rand undermines any lift from cheap oil, said Nico Bezuidenhout, acting chief executive of South African Airways. "You've got the break on the fuel price," he said. "But the currency has gone to the dogs." Nicholas Bariyo in Kampala, Uganda, and Inti Landauro in Paris contributed to this article. Write to Patrick McGroarty at , Drew Hinshaw at and Matina Stevis at Credit: Patrick McGroarty, Drew Hinshaw, Matina Stevis
Subject: Petroleum industry; Natural gas; Crude oil prices; Petroleum production; Economic growth; Gross Domestic Product--GDP
Location: Ghana Nigeria Mozambique
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Tullow Oil PLC; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: CNOOC Ltd; NAICS: 211111; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635252362
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635252362?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Repsol Advances in Takeover Talks With Talisman; Falling Oil Prices Putting Pressure on Smaller Energy Companies to Sell Assets, Consider Buyout Offers
Author: Bjork, Christopher; Dummett, Ben; Shayndi Raice
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
[...]it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk.
Full text: MADRID--Spanish oil company Repsol SA is circling beleaguered Canadian exploration firm Talisman Energy Inc., said people familiar with the matter, a sign that falling prices may be rekindling big energy mergers. Repsol executives have traveled to Calgary, Alberta, to discuss a takeover bid in the range of C$6 to C$8 per share, one of the people said. A deal could be for as much as 8 billion Canadian dollars ($6.93 billion), that person said. On Monday, Talisman said it has been approached by "a number of parties" including Repsol about various unspecified transactions. Talisman shares jumped 16% to $4.29 at 4 p.m. in New York Stock Exchange trading on Friday. The Financial Times earlier reported the two were close to a deal. A near-halving of oil prices since June has pressured smaller energy companies to sell assets or consider takeover bids as they face trouble funding new exploration. Meantime, big companies have an increasing incentive to cut their spending on exploration, and instead use their stock or spare cash to acquire the already-producing assets of smaller companies. For small producers facing an approach by big rivals, "there is no bargaining power they have," said Fadel Gheit, an energy analyst with Oppenheimer & Co. The value of oil and gas deals this year is up nearly 24% from last year to more than $300 billion, according to data tracker Dealogic. Last year's $242.54 billion of oil and gas deals was the lowest since 2009. Oil-price crashes have historically led to a flurry of deal making. In the late 1990s, the industry was reshaped as BP PLC acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco. Talisman is one of the energy companies facing takeover pressure. Even after rising by more than a third on Friday, its share price is off 63% this year, compared with a 29% fall for Canada's main energy-stock index. Talisman has struggled to pay off debt its previous management loaded up on to aggressively pursue overseas expansion. Now it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk. Repsol, on the other hand, has money to spend. It received $5 billion in compensation earlier this year, after Argentina's government nationalized YPF SA in 2012, in which Repsol held a majority stake. Repsol and Talisman said in July they were negotiating a possible deal. That came nearly a year after The Wall Street Journal , and that Talisman was one potential seller. Talisman Chief Executive Hal Kvisle said last month that he , though he didn't specify a likely buyer by name. Talisman said it plans to sell off more assets this year to meet a $2 billion divestiture goal by mid-2015. Chester Dawson and Justin Scheck contributed to this article. Write to Christopher Bjork at , Ben Dummett at and Shayndi Raice at Credit: By Christopher Bjork, Ben Dummett and Shayndi Raice
Subject: Petroleum industry; Acquisitions & mergers; Executives
Location: Calgary Alberta Canada
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Talisman Energy Inc; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: YPF SA; NAICS: 211111; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: Financial Times; NAICS: 511110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635285523
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635285523?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
How Crude Oil's Global Collapse Unfolded; Tracing the Plunge In Oil Prices Back to Texas
Author: Gold, Russell
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day. [...]American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada.
Full text: Since the 1970s, Nigeria has sent a steady stream of high-quality crude oil to North American refineries. As recently as 2010, tankers delivered a million barrels a day. Then came the U.S. energy boom. By July of this year, oil imports from Nigeria had fallen to zero. Displaced by surging U.S. oil production, millions of barrels of Nigerian crude now head to India, Indonesia and China. But Middle Eastern nations are trying to entice the same buyers. This has set up a battle for market share that could reshape the Organization of the Petroleum Exporting Countries and fundamentally change the global market for oil. On Friday, crude prices in five years after the International Energy Agency for the fifth time in six months. That signaled to investors that the world economy would struggle in the coming year, sending the Dow Jones Industrial Average , or 1.8%, to 17280.83. That's the Dow's biggest weekly percentage loss in three years. Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day. The drop in global oil prices from over $110 a barrel to under $62 on Friday has been portrayed as a showdown between Saudi Arabia and the U.S., two of the world's biggest oil producers. But the reality is more complex, involving Libyan rebels and Indonesian cabdrivers as well as Texas roughnecks and Middle Eastern oil ministers. It reflects both the surging supply of crude and the crumbling demand for oil. And the oil-price plunge may not end soon. Bank of America Merrill Lynch says U.S. oil prices could drop to $50 in 2015. The roots of the price collapse go back to 2008 near Cotulla, Texas, a tiny town between San Antonio and the Mexican border. This was where the first well was drilled into the Eagle Ford Shale. At the time, the U.S. pumped about 4.7 million barrels a day of crude oil. In 2009 and 2010, the global economy improved, demand for oil increased and crude prices rose, creating a large incentive to find new supplies. In Cotulla and elsewhere, U.S. drillers answered the call. "There was, for lack of a better term, an arms race for oil, and we found a ton of oil," says Dean Hazelcorn, an oil trader at Coquest in Dallas. Today, two hundred drilling rigs blanket South Texas, steering metal bits deep underground into the rock. Once drilled and hydraulically fractured, these wells yield large volumes ofhigh-quality oil; at the moment, the U.S. is producing 8.9 million barrels a day, thanks to the Eagle Ford and other new oil fields. Americans aren't pumping more gasoline or otherwise using up all that new crude, and under U.S. laws dating back to the 1970s, it has been almost impossible to export. As a result, American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada. OPEC sent the U.S. 180.6 million barrels in August 2008, a month before the first Eagle Ford well; in September 2014, it shipped about half that, 87 million barrels. That is about 100 fewer tankers of crude arriving in U.S. ports. They went elsewhere. For a long time, it seemed like the world's growing appetite for oil would soak up all the displaced crude. By 2011 prices began to hover between $90 and $100 a barrel and mostly stayed in that range. But earlier this year, another trend began to come into focus, catching Wall Street energy analysts and other market watchers by surprise. In March, many analysts predicted global demand for crude oil would grow by 1.4 million barrels a day in 2014, to 92.7 million barrels a day. That prediction proved wildly optimistic. Vikas Dwivedi, energy strategist with Macquarie Research, says a widespread deceleration of global economic growth sapped some demand. At the same time, several Asian currencies weakened against the U.S. dollar. The cost of filling up a gas tank in Indonesia, Thailand, India and Malaysia rose, just as these countries were phasing out fuel subsidies. In Jakarta and Mumbai, drivers cut back. "The fact that supply growth was strong shouldn't have taken anybody by surprise," Mr. Dwivedi says. But demand for oil "just fell off a cliff. And bear markets are fed by negative surprises." Rising supply and falling demand both put downward pressure on prices. Throughout the summer, however, fears of violence in Iraq kept oil prices high as traders worried Islamic State fighters could cut the countrys oil output. Then two events tipped the market. In late June, The Wall Street Journal reported the U.S. government had given permission for the first exports of U.S. oil in a generation. While the ruling was limited in scope, the market saw it as the first crack in a long-standing ban on crude exports. Not only was the U.S. importing fewer barrels of oil, it could soon begin exporting some, too. This news jolted oil markets; prices began to edge down from their summer peaks. On July 1, Libyan rebels agreed to open Es Sider and Ras Lanuf, two key oil-export terminals that had been closed for a year. Libyan oil sailed across the Mediterranean Sea into Europe. Already displaced from the U.S. Gulf Coast and eastern Canada, Nigerian oil was soon replaced in Europe, too. Increasingly, shipments of Nigerian crude headed toward China. Oil prices began to decline. By the end of July, a barrel of U.S. crude fell below $100. In early September, the IEA, a Paris-based energy watchdog, noted there had been a "pronounced slowdown in demand growth." A month later, oil prices fell below $90 a barrel. By the middle of September, Petroleum Intelligence Weekly, a widely read industry newsletter, said both sides of the Atlantic Ocean were "awash in oil." Nigeria, it declared, "needs to find new customers for its light, sweet crude streams in Asia." Saudi Arabia didn't want Nigeria to develop long-term relationships with refinery buyers in Asia. In late September, the kingdom decided to shore up its hold on them by, effectively, holding a sale. The Saudis cut their official crude price in Asia by $1 a barrel; within a week, Iran and Kuwait did the same. Two weeks later, the IEA again lowered its full-year projection of demand growth by 200,000 barrels a day to a meager annual increase of 700,000 barrels, nearly half of what it expected at the beginning of the year. Oil prices fell nearly $4 a barrel on the news. At this point, the oil market appeared to be in free fall. Of the 23 trading days in October, the price of crude fell by more than $1 on eight days. It rose by $1 on one day. Traders' attention turned to OPEC, which has traditionally played the role of market stabilizer by cutting production when prices fall and raising production when prices rise. Many OPEC members, reliant on the cash oil brings in to pay for generous social programs, didn't want to cut. Saudi Arabia's powerful oil minister, Ali al-Naimi, was silent for weeks. The country had been burned in the past when it cut its oil output, only to see other countries continue to pump--and steal its customers. And it was already feeling competition, says Abudi Zein, chief operating officer of ClipperData, a New York firm that tracks global crude movement. Colombia, which historically has sent most of its oil to the U.S., is finding its biggest buyer this year is China, a critical market for OPEC, he said. "For the Saudis, Asia is their growth market," Mr. Zein says. "The Nigerians and Colombians are being kicked out of their natural markets in North America. Saudi had to do something." At its regular meeting in Vienna in late November, the cartel kept production unchanged. U.S. and European oil prices fell another $7 per barrel. On Wednesday, Mr. al-Naimi, the Saudi Arabian oil minister, was asked whether OPEC would soon act to cut exports. "Why should we cut production?" he asked. "Why?" Write to Russell Gold at Credit: By Russell Gold
Subject: Petroleum refineries; Petroleum industry; Supply & demand; Crude oil; Crude oil prices; Petroleum production
Location: Texas Nigeria India China Indonesia
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635292332
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635292332?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Inflation Forecasts Will Drown in Oil; Investors Should Be Wary of Relying on Current Forecasts
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
Robert Barbera, co-director for the Center for Financial Economics at Johns Hopkins University, thinks economists are similarly underestimating gasoline's effect on consumer spending, and that they will be even more surprised by the strength of the December retail sales report than they were by this week's November report.
Full text: The oil market rout could have a much more powerful influence on prices and spending in the U.S. than economists are letting on. The continued slide in energy prices has led economists to revise their forecasts. With regular gasoline averaging $2.60 a gallon, and flagged to fall further, they have got inflation cooling in the months ahead. And since lower fuel prices will give people more money to spend on other stuff, they have got consumer spending going up. But knowing how quickly the price environment can shift, economists can be a little cautious about how much they change their forecasts. That looks like the situation today. Consider the Labor Department's consumer-price index. Economists generally estimate that after rising about 1.4% in the fourth quarter from a year earlier, inflation will soften to a little less than 1% in the first quarter. But a back-of-the-envelope calculation suggests it could cool a lot more. Evercore ISI estimates that futures now point to gasoline at $2.31 a gallon in January, down 30% year over year. Assume it stays there through the first quarter, and that gets reflected in the Labor Department's index of consumer energy good prices (which is 93% gasoline). Assume also that prices for energy services like electricity merely stay flat with their October level. And have food, and other consumer goods and services change at the same year-over-year rates as they did in October. The result: The CPI will rise about 0.2% in January and 0.1% in February--and slip 0.3% in March. Robert Barbera, co-director for the Center for Financial Economics at Johns Hopkins University, thinks economists are similarly underestimating gasoline's effect on consumer spending, and that they will be even more surprised by the strength of the December retail sales report than they were by this week's November report. Investors relying on economists' estimates could be pretty surprised, as well. Write to Justin Lahart at Credit: By Justin Lahart
Subject: Gasoline prices; Consumer Price Index; Statistical data
Location: United States--US
Company / organization: Name: Johns Hopkins University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635292378
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635292378?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norway's Central Bank Slips on Oil; Uncertainty About Growth Tops Agenda for Policy Makers
Author: Barley, Richard
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Dec 2014: n/a.
Abstract:
The rate path set out in the Norges Bank monetary policy report shows a 50% chance of another 0.25 percentage-point reduction, SEB notes.
Full text: The plunging oil price is putting the skids under central bank policy. Norway is an example. Norges Bank delivered to 1.25% from 1.5% this week due to fears about the potential damage that slumping oil could cause to the country's non-oil economy. Rates in the country are now back at the lows seen in the depths of the crisis in 2009. That is despite a falling Norwegian krone that should deliver higher inflation and a relatively benign economic outlook, coupled with high consumer debt levels that are cause for concern. Norway's economy has been performing well recently. The non-oil economy expanded 2.7% in the year to September, an above-trend performance, Citigroup notes. Core inflation has run at 2.4% year-to-date and unemployment is low at 3.7%.--Brent crude is now down 44% year-to-date and shows few signs of halting its decline--clearly pose a challenge to an economy heavily reliant on hydrocarbons. Reduced oil-related investment could hurt firms and consumers. But the Norwegian krone, down 8.8% against the euro so far this year, offers some cushion. For Norges Bank, however, concerns about growth and heightened economic uncertainty are clearly in the driving seat. In effect, the central bank is taking out insurance against a potentially worse outcome with its rate cut. More could be on the way: The rate path set out in the Norges Bank monetary policy report shows a 50% chance of another 0.25 percentage-point reduction, SEB notes. And yet Norges Bank revised its inflation forecast up and thinks it will run above the 2.5% target in the near term; the weaker currency will push up import costs. The central bank is also assuming that the krone will once again appreciate, reducing upward pressure on inflation. If that appreciation doesn't materialize, inflation could become a serious issue, J.P. Morgan notes. It also puts into focus the central bank's use of so-called macroprudential policy tools to rein in financial stability risks: With rates being cut, non-interest-rate policies will have to do more. As a big energy producer and exporter, Norway clearly faces a particular challenge around the oil price. For other central banks, the lower oil price should boost growth. But Norges Bank's rate cut fits into a broader pattern of central banks that are unwilling to take any risks around growth in the postcrisis world. With uncertainty about the outlook heightened, a move back to a more-normal rate environment will prove a slower process than thought. Write to Richard Barley at Credit: By Richard Barley
Subject: Central banks; Monetary policy; Banking
Location: Norway
Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Norges Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 12, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635304226
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635304226?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Overheard: Dropping Oil Demand
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Dec 2014: n/a.
Abstract:
Since 2000, oil demand growth has rested increasingly on emerging economies--not just China, but also big oil exporters themselves such as Russia and Middle Eastern countries.
Full text: An oil-industry truism is that the cure for low prices is low prices, as they discourage supply and tighten the market. But oil bulls pinning their hopes on this risk ignoring a big change on the demand side that was highlighted in Friday's report from the International Energy Agency. Even as oil dropped below $58 a barrel, the IEA cut its forecast for global demand growth next year by 230,000 barrels a day. Fully 85% of that relates to Russia, where even the government expects a recession next year. Sanctions over Ukraine play a part, but the bigger factor is a feedback loop from lower oil prices, which drive the Russian economy. This is part of a wider trend. Since 2000, oil demand growth has rested increasingly on emerging economies--not just China, but also big oil exporters themselves such as Russia and Middle Eastern countries. Looking ahead, it is worth bearing in mind that of the 910,000 barrels a day of global demand growth the IEA still forecasts for 2015, a third relates to the Middle East and Brazil. Both regions could suffer more pain as commodities prices slide--and thereby undermine them further.
Subject: Supply & demand; Petroleum industry; Recessions
Location: China Ukraine Russia Brazil Middle East
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 13, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635366078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635366078?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Petrobras Reports Some Financials, Delays Full Release Amid Probe; Oil Firm Also Says It Will Cut Back Ambitious Spending Project
Author: Kiernan, Paul; Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Dec 2014: n/a.
Abstract:
RIO DE JANEIRO--Brazilian state-run oil company Petroleo Brasileiro SA delayed for a second time the release of its third-quarter financial results Friday and said it would cut back on an ambitious spending program as fallout from a widening corruption scandal spreads.
Full text: RIO DE JANEIRO--Brazilian state-run oil company Petroleo Brasileiro SA delayed for a second time the release of its third-quarter financial results Friday and said it would cut back on an ambitious spending program as fallout from a widening corruption scandal spreads. Instead, Petrobras reported "some economic-financial information" that it said wasn't affected by the investigation. Among the indicators released Friday was sales revenue, which rose to 88.38 billion Brazilian reais ($33.3 billion) in the third quarter, up from 77.7 billion reais a year earlier, Petrobras said. With its by uncertainty related to the investigation, Petrobras said it approved a series of measures aimed at preserving cash and shoring up liquidity. Among the measures is "the reduction in the pace of investments in projects," a potential setback in the company's efforts to continue developing huge oil reserves off Brazil's coast. The company didn't say by how much it would reduce its investment pace. Previously, the company said it would spend more than $220 billion by 2018, primarily on ramping up offshore oil production. "These actions ensure positive cash flow in the next year, considering oil prices around $70 a barrel and an exchange rate around 2.60 reais per dollar, and eliminate the necessity to raise capital in the market next year," Petrobras said. Petrobras shares closed down 4.2%, to $7.11, in New York on Friday. Shares are down almost 57% over the last three months. Petrobras also said Friday that it postponed to January 31 a series of covenants allowing creditors to anticipate the maturity of some of its debt if it fails to report unaudited earnings for the third quarter. Those covenants previously obliged the company to report earnings by the end of this year. The company originally delayed its third-quarter results last month after its auditor PricewaterhouseCoopers declined to sign off on the results in light of the probe. Petrobras is at the center of a widespread corruption scandal, in which from some of Brazil's biggest construction companies are alleged to have formed a cartel to artificially inflate the price of Petrobras contracts. . In addition to Brazilian authorities, the and the U.S. Justice Department are conducting their own investigations into alleged wrongdoing at Petrobras. Petrobras is also the target of a handful of class-action lawsuits in New York, where Petrobras shares are traded. The suits allege that Petrobras willfully misled investors about the alleged corruption. Petrobras says it is cooperating with these investigations, and has set up an internal compliance division to deal with possible issues of impropriety going forward. The compliance division will be operational by the end of January, the company said Friday. Light, sweet crude for January delivery fell $2.14, or 3.6%, to $57.81 a barrel on the New York Mercantile Exchange on Friday, the lowest settlement price since May 15, 2009. Prices slid 12.2% this week and are down 41% year-to-date. Brent, the global benchmark, fell $1.83, or 2.9%, to $61.85 a barrel on ICE Futures Europe, the lowest level since July 14, 2009. Prices are down 10.5% on the week and 44% on the year. Write to Paul Kiernan at and Will Connors at Credit: By Paul Kiernan And Will Connors
Subject: Petroleum industry; Prices; Petroleum production
Location: Brazil New York
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: Department of Justice; NAICS: 922130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 13, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635366263
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635366263?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Tumble After Weak Oil Forecast --- Dow Drops 300 Points on Growth Fears As U.S. Boom Shuffles Export Markets
Author: Gold, Russell
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Dec 2014: A.1.
Abstract:
Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day. [...]American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada.
Full text: Since the 1970s, Nigeria has sent a steady stream of high-quality crude oil to North American refineries. As recently as 2010, tankers delivered a million barrels a day. Then came the U.S. energy boom. By July of this year, oil imports from Nigeria had fallen to zero. Displaced by surging U.S. oil production, millions of barrels of Nigerian crude now head to India, Indonesia and China. But Middle Eastern nations are trying to entice the same buyers. This has set up a battle for market share that could reshape the Organization of the Petroleum Exporting Countries and fundamentally change the global market for oil. On Friday, crude prices dropped to their lowest level in five years after the International Energy Agency cut its forecast for global oil demand for the fifth time in six months. That signaled to investors that the world economy would struggle in the coming year, sending the Dow Jones Industrial Average tumbling by 315.51 points, or 1.8%, to 17280.83. That's the Dow's biggest weekly percentage loss in three years. Since June, the IEA has cut its demand forecast for 2015 by 800,000 barrels, while it says U.S. oil output will rise next year by 1.3 million barrels a day. The drop in global oil prices from over $110 a barrel to under $62 on Friday has been portrayed as a showdown between Saudi Arabia and the U.S., two of the world's biggest oil producers. But the reality is more complex, involving Libyan rebels and Indonesian cabdrivers as well as Texas roughnecks and Middle Eastern oil ministers. It reflects both the surging supply of crude and the crumbling demand for oil. And the oil-price plunge may not end soon. Bank of America Merrill Lynch says U.S. oil prices could drop to $50 in 2015. The roots of the price collapse go back to 2008 near Cotulla, Texas, a tiny town between San Antonio and the Mexican border. This was where the first well was drilled into the Eagle Ford Shale. At the time, the U.S. pumped about 4.7 million barrels a day of crude oil. In 2009 and 2010, the global economy improved, demand for oil increased and crude prices rose, creating a large incentive to find new supplies. In Cotulla and elsewhere, U.S. drillers answered the call. "There was, for lack of a better term, an arms race for oil, and we found a ton of oil," says Dean Hazelcorn, an oil trader at Coquest in Dallas. Today, two hundred drilling rigs blanket South Texas, steering metal bits deep underground into the rock. Once drilled and hydraulically fractured, these wells yield large volumes ofhigh-quality oil; at the moment, the U.S. is producing 8.9 million barrels a day, thanks to the Eagle Ford and other new oil fields. Americans aren't pumping more gasoline or otherwise using up all that new crude, and under U.S. laws dating back to the 1970s, it has been almost impossible to export. As a result, American refineries snapped up inexpensive crude from Texas and North Dakota, using it to replace oil from Nigeria, Algeria, Angola and Brazil, and almost every other oil-producing nation except Canada. OPEC sent the U.S. 180.6 million barrels in August 2008, a month before the first Eagle Ford well; in September 2014, it shipped about half that, 87 million barrels. That is about 100 fewer tankers of crude arriving in U.S. ports. They went elsewhere. For a long time, it seemed like the world's growing appetite for oil would soak up all the displaced crude. By 2011 prices began to hover between $90 and $100 a barrel and mostly stayed in that range. But earlier this year, another trend began to come into focus, catching Wall Street energy analysts and other market watchers by surprise. In March, many analysts predicted global demand for crude oil would grow by 1.4 million barrels a day in 2014, to 92.7 million barrels a day. That prediction proved wildly optimistic. Vikas Dwivedi, energy strategist with Macquarie Research, says a widespread deceleration of global economic growth sapped some demand. At the same time, several Asian currencies weakened against the U.S. dollar. The cost of filling up a gas tank in Indonesia, Thailand, India and Malaysia rose, just as these countries were phasing out fuel subsidies. In Jakarta and Mumbai, drivers cut back. "The fact that supply growth was strong shouldn't have taken anybody by surprise," Mr. Dwivedi says. But demand for oil "just fell off a cliff. And bear markets are fed by negative surprises." Rising supply and falling demand both put downward pressure on prices. Throughout the summer, however, fears of violence in Iraq kept oil prices high as traders worried Islamic State fighters could cut the countrys oil output. Then two events tipped the market. In late June, The Wall Street Journal reported the U.S. government had given permission for the first exports of U.S. oil in a generation. While the ruling was limited in scope, the market saw it as the first crack in a long-standing ban on crude exports. Not only was the U.S. importing fewer barrels of oil, it could soon begin exporting some, too. This news jolted oil markets; prices began to edge down from their summer peaks. On July 1, Libyan rebels agreed to open Es Sider and Ras Lanuf, two key oil-export terminals that had been closed for a year. Libyan oil sailed across the Mediterranean Sea into Europe. Already displaced from the U.S. Gulf Coast and eastern Canada, Nigerian oil was soon replaced in Europe, too. Increasingly, shipments of Nigerian crude headed toward China. Oil prices began to decline. By the end of July, a barrel of U.S. crude fell below $100. In early September, the IEA, a Paris-based energy watchdog, noted there had been a "pronounced slowdown in demand growth." A month later, oil prices fell below $90 a barrel. By the middle of September, Petroleum Intelligence Weekly, a widely read industry newsletter, said both sides of the Atlantic Ocean were "awash in oil." Nigeria, it declared, "needs to find new customers for its light, sweet crude streams in Asia." Saudi Arabia didn't want Nigeria to develop long-term relationships with refinery buyers in Asia. In late September, the kingdom decided to shore up its hold on them by, effectively, holding a sale. The Saudis cut their official crude price in Asia by $1 a barrel; within a week, Iran and Kuwait did the same. Two weeks later, the IEA again lowered its full-year projection of demand growth by 200,000 barrels a day to a meager annual increase of 700,000 barrels, nearly half of what it expected at the beginning of the year. Oil prices fell nearly $4 a barrel on the news. At this point, the oil market appeared to be in free fall. Of the 23 trading days in October, the price of crude fell by more than $1 on eight days. It rose by $1 on one day. Traders' attention turned to OPEC, which has traditionally played the role of market stabilizer by cutting production when prices fall and raising production when prices rise. Many OPEC members, reliant on the cash oil brings in to pay for generous social programs, didn't want to cut. Saudi Arabia's powerful oil minister, Ali al-Naimi, was silent for weeks. The country had been burned in the past when it cut its oil output, only to see other countries continue to pump -- and steal its customers. And it was already feeling competition, says Abudi Zein, chief operating officer of ClipperData, a New York firm that tracks global crude movement. Colombia, which historically has sent most of its oil to the U.S., is finding its biggest buyer this year is China, a critical market for OPEC, he said. "For the Saudis, Asia is their growth market," Mr. Zein says. "The Nigerians and Colombians are being kicked out of their natural markets in North America. Saudi had to do something." At its regular meeting in Vienna in late November, the cartel kept production unchanged. U.S. and European oil prices fell another $7 per barrel. On Wednesday, Mr. al-Naimi, the Saudi Arabian oil minister, was asked whether OPEC would soon act to cut exports. "Why should we cut production?" he asked. "Why?" Credit: By Russell Gold
Subject: Stock prices; Economic impact; Crude oil prices; Securities markets
Location: United States--US
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 9180: International; 3400: Investment analysis & personal finance; 1510: Energy resources
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 13, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635392874
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635392874?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Spain's Repsol Circles Beleaguered Canadian Oil Firm Talisman
Author: Bjork, Christopher; Dummett, Ben; Shayndi Raice
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Dec 2014: B.3.
Abstract:
[...]it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk.
Full text: MADRID -- Spanish oil company Repsol SA is circling beleaguered Canadian exploration firm Talisman Energy Inc., said people familiar with the matter, a sign that falling prices may be rekindling big energy mergers. Repsol executives have traveled to Calgary, Alberta, to discuss a takeover bid in the range of C$6 to C$8 per share, one of the people said. A deal could be for as much as 8 billion Canadian dollars ($6.93 billion), that person said. On Monday, Talisman said it has been approached by "a number of parties" including Repsol about various unspecified transactions. Talisman shares jumped 16% to $4.29 at 4 p.m. in New York Stock Exchange trading on Friday. The Financial Times earlier reported the two were close to a deal. A near-halving of oil prices since June has pressured smaller energy companies to sell assets or consider takeover bids as they face trouble funding new exploration. Meantime, big companies have an increasing incentive to cut their spending on exploration, and instead use their stock or spare cash to acquire the already-producing assets of smaller companies. For small producers facing an approach by big rivals, "there is no bargaining power they have," said Fadel Gheit, an energy analyst with Oppenheimer & Co. The value of oil and gas deals this year is up nearly 24% from last year to more than $300 billion, according to data tracker Dealogic. Last year's $242.54 billion of oil and gas deals was the lowest since 2009. Oil-price crashes have historically led to a flurry of deal making. In the late 1990s, the industry was reshaped as BP PLC acquired Amoco and Arco, Exxon bought Mobil, and Chevron Corp. snared Texaco. Talisman is one of the energy companies facing takeover pressure. Even after rising by more than a third on Friday, its share price is off 63% this year, compared with a 29% fall for Canada's main energy-stock index. Talisman has struggled to pay off debt its previous management loaded up on to aggressively pursue overseas expansion. Now it faces a $900 million annual drain to keep operating in areas including the North Sea and Iraqi Kurdistan, according to Standard & Poor's, which in October cut the company's credit rating to triple-B-minus, one notch above junk. Repsol, on the other hand, has money to spend. It received $5 billion in compensation earlier this year, after Argentina's government nationalized YPF SA in 2012, in which Repsol held a majority stake. Repsol and Talisman said in July they were negotiating a possible deal. That came nearly a year after The Wall Street Journal reported that Repsol had begun shopping for a North American oil company or assets, and that Talisman was one potential seller. Talisman Chief Executive Hal Kvisle said last month that he expects to sell "one or two" assets by Dec. 31, though he didn't specify a likely buyer by name. Talisman said it plans to sell off more assets this year to meet a $2 billion divestiture goal by mid-2015. --- Chester Dawson and Justin Scheck contributed to this article. Credit: By Christopher Bjork, Ben Dummett and Shayndi Raice
Subject: Acquisitions & mergers; Bids
Location: Canada Spain
Company / organization: Name: Talisman Energy Inc; NAICS: 211111; Name: RepsolYPF SA; NAICS: 213111, 213112, 324110
Classification: 9180: International; 8510: Petroleum industry; 2330: Acquisitions & mergers
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Dec 13, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635393034
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635393034?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Take Winners and Losers on a Wild Ride
Author: Zuckerman, Gregory
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Dec 2014: WSJ.1.
Abstract:
Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016.
Full text: For most Americans, this year's sudden collapse of oil prices appears to be unqualified good news. Oil prices have dropped 45% since June, amid surging output from U.S. shale fields, strong Saudi Arabian production and weak demand from Asia and elsewhere. They dropped 12.2% just last week, closing Friday at $57.81 a barrel. Analysts at Credit Suisse and other banks say it will take years before oil prices return to $100-a-barrel levels. For drivers and those who rely on oil to heat their homes, falling crude prices act as an unexpected bonus or tax refund. But for investors? It gets a bit more complicated. Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds. A Boost for Retailers But there are also potential winners, such as retail stocks. Last week, the Commerce Department reported that retail sales grew 0.7% in November, the sharpest rise in eight months. With gas prices below $2.50 a gallon in many parts of the country and oil continuing to weaken, that growth could continue. An improving employment outlook also helps. Not all retail sectors are benefiting. While automobiles and parts sales are strong, as are clothing and accessories, food and beverage, along with sporting goods, don't seem to be getting much of an uptick. Some analysts say the best bets are lower-end retailers like Wal-Mart Stores, Costco Wholesale and Big Lots. Falling gas prices provide big benefits to customers of these stores, analyst say, because they give low-wage earners more to spend on household goods and other items. Last month, Wal-Mart reported its first quarterly sales increase since 2012, citing falling gasoline prices as a factor. Big Lots, under new management since last year, also could benefit. Falling fuel prices could hurt Costco, one of the country's largest fuel retailers. But analysts predict higher earnings for the company, partly because cheaper driving makes it more appealing to make longer shopping trips to warehouse stores such as Costco and Wal-Mart. Airline profits will also rise, analysts say. Fuel represents about half of airline costs, and few are expected to pass the savings to customers through lower fares. American Airlines shares are up 25% in the past six months, less than Delta Air Lines's 35% jump, and some say American is a more reasonable value. But a growing number of analysts warn investors to beware of the downside to falling oil prices. The energy industry, of course, will remain under pressure as long as prices drop. Some are adjusting their businesses. Last week, British oil giant BP said it would cut jobs and take $1 billion in restructuring charges, and others are trimmings spending plans. But some investors, such as Doug Kass, author of "Doug Kass on the Market: A Life on The Street," warn that contagion from energy weakness can be unpredictable. "Most are underestimating the negative consequences of oil's spill," says Mr. Kass, who worries about energy loans from banks. Banks exposed to energy include Oklahoma lender BOK Financial Corp. (BOKF), which has extended 19% of its loans, by value, to energy-related companies, according to BMO Capital Markets. Cullen/Frost Bankers (CFR) has extended 14%, Zions Bancorp (ZION) 8% and Prosperity Bancshares (PB) 7%. Loan demand for these banks could drop, some investors say. Already, the junk-bond market is being crippled because 14% of those bonds are energy-related. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016." "You can't sell just the energy portion of a high-yield mutual fund, so you have to sell the whole thing...and that puts downward pressure on the high-yield market as a whole," he says. "Many think the fall in oil is good for the economy as gas prices fall and the consumer benefits," says Douglas Rothschild, president of PT Asset Management. "But the speed of the fall is bad because many companies can't adjust quickly enough...leading to layoffs, borrower defaults and trouble for the lenders." Energy companies often hedge at least some of their oil production at higher prices and don't face repayment of the principal on their junk bonds for several years, suggesting there won't be an immediate wave of bankruptcies. Nonetheless, tumbling oil prices have "created the largest new supply of distressed debt in a number of years...Almost overnight there's been more than 100 stressed and distressed credits," says Andrew Herenstein, co-founder of Monarch Alternative Capital, among the largest investors in distressed debt. Oh Canada The Canadian economy could get hurt if oil remains weak, because of the country's important energy industry. That's why newsletter writer Jared Dillian predicts weakness for Canadian Imperial Bank of Commerce (CIBC) and Toronto-Dominion Bank (TD). Blaze Tankersley, chief market strategist at BayCrest Partners, says investors should be wary of manufacturer Dover (DOV), which has seen growth in its energy segment, and General Electric (GE), which also sells to energy companies. Still, energy prices are just one factor in an investment outlook and shouldn't be the sole reason to adjust a portfolio. Falling prices can help consumers, for example, but if the housing market's recent weakness continues it could offset some of the benefits. Credit: By Gregory Zuckerman
Subject: Junk bonds; Petroleum industry; Retail stores; Discount department stores; Crude oil prices; Tax refunds
Location: United States--US Asia
Company / organization: Name: Big Lots Inc; NAICS: 452112; Name: Costco Wholesale Corp; NAICS: 452910; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Delta Air Lines Inc; NAICS: 481111; Name: Credit Suisse Group; NAICS: 522110; Name: American Airlines Inc; NAICS: 481111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Source details: Sunday Edition
Pages: WSJ.1
Publication year: 2014
Publication date: Dec 14, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635580078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635580078?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permissio n.
Last updated: 2017-11-21
Database: The Wall Street Journal
How Cheap Oil Complicates Investing; While Retail Stocks Benefit, Others Take It on the Chin
Author: Zuckerman, Gregory
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract:
Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016.
Full text: For most Americans, this year's sudden collapse of oil prices appears to be unqualified good news. Oil prices have dropped 45% since June, amid surging output from U.S. shale fields, strong Saudi Arabian production and weak demand from Asia and elsewhere. They dropped 12.2% just last week, closing Friday at $57.81 a barrel. Analysts at Credit Suisse and other banks say it will take years before oil prices return to $100-a-barrel levels. For drivers and those who rely on oil to heat their homes, falling crude prices act as an unexpected bonus or tax refund. But for investors? It gets a bit more complicated. Sure, energy stocks are taking it on the chin, as are companies that seem far removed from the oil patch--among them debt-laden North Dakota oil drillers, energy-service companies and junk bonds. A Boost for Retailers But there are also potential winners, such as retail stocks. Last week, the Commerce Department reported that retail sales grew 0.7% in November, the sharpest rise in eight months. With gas prices below $2.50 a gallon in many parts of the country and oil continuing to weaken, that growth could continue. An improving employment outlook also helps. Not all retail sectors are benefiting. While automobiles and parts sales are strong, as are clothing and accessories, food and beverage, along with sporting goods, don't seem to be getting much of an uptick. Some analysts say the best bets are lower-end retailers like Wal-Mart Stores, Costco Wholesale and Big Lots. Falling gas prices provide big benefits to customers of these stores, analyst say, because they give low-wage earners more to spend on household goods and other items. Last month, Wal-Mart reported its first quarterly sales increase since 2012, citing falling gasoline prices as a factor. Big Lots, under new management since last year, also could benefit. Falling fuel prices could hurt Costco, one of the country's largest fuel retailers. But analysts predict higher earnings for the company, partly because cheaper driving makes it more appealing to make longer shopping trips to warehouse stores such as Costco and Wal-Mart. Airline profits will also rise, analysts say. Fuel represents about half of airline costs, and few are expected to pass the savings to customers through lower fares. American Airlines shares are up 25% in the past six months, less than Delta Air Lines's 35% jump, and some say American is a more reasonable value. But a growing number of analysts warn investors to beware of the downside to falling oil prices. The energy industry, of course, will remain under pressure as long as prices drop. Some are adjusting their businesses. Last week, British oil giant BP said it would cut jobs and take $1 billion in restructuring charges, and others are trimmings spending plans. But some investors, such as Doug Kass, author of "Doug Kass on the Market: A Life on The Street," warn that contagion from energy weakness can be unpredictable. "Most are underestimating the negative consequences of oil's spill," says Mr. Kass, who worries about energy loans from banks. Banks exposed to energy include Oklahoma lender BOK Financial Corp. (BOKF), which has extended 19% of its loans, by value, to energy-related companies, according to BMO Capital Markets. Cullen/Frost Bankers (CFR) has extended 14%, Zions Bancorp (ZION) 8% and Prosperity Bancshares (PB) 7%. Loan demand for these banks could drop, some investors say. Already, the junk-bond market is being crippled because 14% of those bonds are energy-related. "If you participate in high yield through a fund or an ETF, you have substantial exposure to energy that probably won't be fully offset by the benefits to other industries of lower oil prices," says Marty Fridson, chief investment officer at Lehmann Livian Fridson Advisors, adding that the market anticipates an "oil-patch recession in 2016." "You can't sell just the energy portion of a high-yield mutual fund, so you have to sell the whole thing...and that puts downward pressure on the high-yield market as a whole," he says. "Many think the fall in oil is good for the economy as gas prices fall and the consumer benefits," says Douglas Rothschild, president of PT Asset Management. "But the speed of the fall is bad because many companies can't adjust quickly enough...leading to layoffs, borrower defaults and trouble for the lenders." Energy companies often hedge at least some of their oil production at higher prices and don't face repayment of the principal on their junk bonds for several years, suggesting there won't be an immediate wave of bankruptcies. Nonetheless, tumbling oil prices have "created the largest new supply of distressed debt in a number of years...Almost overnight there's been more than 100 stressed and distressed credits," says Andrew Herenstein, co-founder of Monarch Alternative Capital, among the largest investors in distressed debt. Oh Canada "The benefits of lower oil prices will not be evenly distributed, and it is important to think about countries that stand to benefit more because of higher consumption and/or less economic dependence on oil exports," according to a report by bond powerhouse Pimco. "The losers are oil exporters, including Norway, for whom commodity exports are some 20% of GDP, and Russia. On the other hand Korea, China, Japan, India and Thailand are net oil importers and will benefit from the sharply lower prices." The Canadian economy could get hurt if oil remains weak, because of the country's important energy industry. That's why newsletter writer Jared Dillian predicts weakness for Canadian Imperial Bank of Commerce (CIBC) and Toronto-Dominion Bank (TD). Blaze Tankersley, chief market strategist at BayCrest Partners, says investors should be wary of manufacturer Dover (DOV), which has seen growth in its energy segment, and General Electric (GE), which also sells to energy companies. Still, energy prices are just one factor in an investment outlook and shouldn't be the sole reason to adjust a portfolio. Falling prices can help consumers, for example, but if the housing market's recent weakness continues it could offset some of the benefits. "The energy sector's effect on either market trend or earnings is not as significant as many might perceive," says Tobias Levkovitch, chief U.S. equity strategist at Citigroup. "While many investors have been raising the issue of the plunge in oil prices and its potential influence on earnings, capital spending, employment trends, equity markets and consumer activity, reviewing the data suggests that it is not the end all." Write to Gregory Zuckerman at Credit: By Gregory Zuckerman
Subject: Junk bonds; Petroleum industry; Retail stores; Discount department stores; Crude oil prices; Tax refunds
Location: United States--US
Company / organization: Name: Big Lots Inc; NAICS: 452112; Name: Costco Wholesale Corp; NAICS: 452910; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Delta Air Lines Inc; NAICS: 481111; Name: Credit Suisse Group; NAICS: 522110; Name: American Airlines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635582866
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635582866?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Libya Declares Force Majeure on Two Key Oil Ports; Armed Clashes Disrupt About Half of Country's Crude Export Capacity
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract: None available.
Full text: Libya has declared force majeure on two key oil ports, a top oil official said Sunday, as armed clashes disrupted about half of the country's crude export capacity. Speaking to The Wall Street Journal, Samir Kamal, head of planning at Libya's state-run National Oil Co., said force majeure has been declared for the terminals of Es Sider and Ras Lanuf as oil flows from fields supplying them have been interrupted. The force majeure--which protects against any claims from oil buyers for the disruption--comes after Islamist militias that control Tripoli launched an offensive in the area against forces loyal to an internationally-recognized government based in Eastern Libya. Es Sider and Ras Lanuf normally ship 560,000 barrels a day combined, nearly half of the country's export capacity of 1.3 million barrels a day. The two terminals had reopened this summer after a one-year interruption following . Libya's oil production has been frequently disrupted by strikes and unrest since the fall of leader Moammar Gadhafi in 2011. Write to Benoît Faucon at Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635736793
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635736793?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC Head Says No Oil Target Price Set; Abdalla Salem el-Badri Calls for Continued Investment From Gulf Producers
Author: Parasie, Nicolas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract:
DUBAI--The head of the Organization of the Petroleum Exporting Countries on Sunday said the group hasn't set a fixed oil-price target, and urged exporters from the Gulf region to continue to invest in exploration and production even as a crimps revenue.
Full text: DUBAI--The head of the Organization of the Petroleum Exporting Countries on Sunday said the group hasn't set a fixed oil-price target, and urged exporters from the Gulf region to continue to invest in exploration and production even as a crimps revenue. "No target price," said Abdalla Salem el-Badri, speaking at an event in Dubai, in comments translated to English from Arabic by an interpreter. Mr. el-Badri's comments come after crude prices dropped to their , and mark his first public remarks since OPEC decided last month to . Mr. el-Badri dismissed interpretations from some quarters that November's OPEC decision was aimed at undermining the U.S., Iran or Russia. "All of this is incorrect," he said. Global oil prices have dropped below $62 from $110 several months ago, reflecting lower demand and concerns about the slowing global economy. Lower prices are likely to curb the spending power of some of the world's biggest oil producers. The OPEC secretary-general said he isn't concerned about the Gulf countries in particular, even though lower prices will likely shrink their government budgets next year, because they will have built up sufficient capital buffers. However, he said those countries must continue to invest in exploration and production or oil prices are likely to rise again. "If there's no new investments and new supplies to the market, prices will end up over $100," Mr. el-Badri said. Write to Nicolas Parasie at Credit: By Nicolas Parasie
Subject: Petroleum industry; Crude oil prices; Price increases
Location: Russia Iran United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635752039
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635752039?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gulf Stock Markets Tumble Again on Oil, Economic Jitters
Author: Jones, Rory
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract:
[...]the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years.
Full text: DUBAI--Stocks in the Persian Gulf slumped again on Sunday, mirroring a similarly sharp selloff last week and all but wiping out year-to-date gains for some of the world's best performing equity markets this year. again spooked investors in Dubai where the DFM General Index finished down 7.6%, extending Thursday's 7.4% rout. The gauge is now down 1.4% for 2015, after doubling in value last year. The market rout extended across the region. The main index in Abu Dhabi dropped 3.6% on Sunday, Qatar slid 5.9% and Kuwait fell 2.9%. Saudi Arabia's market, the largest bourse in the region, retreated 3.3%. Real-estate developers were particularly hard hit on Sunday. Emaar Properties, the region's biggest developer, fell 8% and Abu Dhabi's Aldar Properties fell nearly 10%. Dubai Parks and Resorts listed on the Dubai Financial Market on Wednesday and has since fallen 25% in three days of trading. Saudi Basic Industries Corporation, or SABIC, one of the world's biggest petrochemical firms, lost 1.3%. The Organization of the Petroleum Exporting Countries--of which Saudi Arabia is the de facto leader-- not to cut current crude output levels and maintain a glut of supply in the market. Saudi oil minister Ali al-Naimi last week reiterated that the oil producer wouldn't cut production despite the falling price of crude. As a result, the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years. Adding to the bearish mood, the International Energy Agency cut its forecast for oil demand growth in 2015. "Unless there is a positive catalyst for an increase in the oil price the market may continue to stay weak during the coming week," Dubai-based Al Masah Capital said in a note. "The severity of this decline could very well be explained by investors covering margin calls as leverage was used on the way up over the past year," it added. Capital Economics said while oil's slump has caused anxiety among stock market investors, large foreign exchange reserves built up over the years means public spending by regional governments should continue. "While we expect growth to soften in 2015-16, we don't think it will collapse," the consultancy firm said in a note to clients. Write to Rory Jones at Credit: By Rory Jones
Subject: Petroleum industry; Stock exchanges; Investments; Crude oil prices
Location: Qatar Kuwait Abu Dhabi United Arab Emirates Saudi Arabia Persian Gulf
Company / organization: Name: Aldar Properties; NAICS: 236220; Name: Emaar Properties; NAICS: 237210; Name: Dubai Financial Market; NAICS: 523210; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635817081
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635817081?acco untid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
We Must Transport Our Shale-Oil Bounty With Safety; Each year railroads train more than 20,000 first responders in their communities on railroad hazmat emergency response.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract:
[...]the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment.
Full text: The article (page one, Dec. 4) makes several references to a refinery owned by a subsidiary of PBF Energy Inc. PBF has had an open and informative relationship with the local community and governmental agencies regarding our rail operations. In addition to our efforts with the community, since earlier this year the company has followed a policy that it will allow only the much safer, new-design railcars to discharge at our facility. While we don't have control over rail movement in the oil fields or outside our facilities, we have been in continuous discussions with the railroads that service the Delaware community to emphasize our interest in running the safest operation possible. Thomas D. O'Malley Executive Chairman PBF Energy Inc. Parsippany, N.J. In the Hudson River Valley, 1.6 billion gallons of Bakken crude oil travels via Albany, N.Y., annually by barge, tanker and rail, along one of America's most populous and biologically diverse estuaries. Empty tank cars have derailed in three accidents, and a tanker carrying Bakken crude downriver punctured in 2012, but luckily lost none of its 12-million-gallon cargo. Scenic Hudson, an environmental organization, has called for a ban on the transport of crude oil on the Hudson River until safe conditions can be established. Government officials have dismissed this as impractical. Immediate steps are needed to prevent a catastrophic accident. New York's legislature must raise fees on transported crude to increase the Oil Spill Fund. And the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment. The state should also require the companies profiting from crude transport to berth a response vessel upriver. Ned Sullivan President Scenic Hudson Inc. Poughkeepsie, N.Y. Each year railroads train more than 20,000 first responders in their communities on railroad hazmat emergency response, as well as offer advanced crude oil-by-rail training at a specialized facility in Colorado. Railroads also maintain detailed emergency response plans, and in November the industry called on the federal government to issue railroad spill plan regulations similar to those governing pipelines. In addition, the rail industry has launched a mobile application that provides emergency responders immediate access to accurate, real-time information about railcars carrying hazardous materials on a train. Edward R. Hamberger Chief Executive Association of American Railroads Washington
Subject: Railroad transportation; Railroad accidents & safety
Location: Delaware
People: O Malley, Thomas D
Company / organization: Name: Scenic Hudson; NAICS: 813410; Name: PBF Energy; NAICS: 324110; Name: Coast Guard-US; NAICS: 928110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635890740
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635890740?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Commodities Go From Hoard to Floored; Oil and Iron Woes May Be Far From Over
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract: None available.
Full text: In understanding the latest commodities selloff centered on oil, consider a raw material lurking in your kitchen: rice. Economists think stockpiling plays a big role in commodity bubbles, but are only now getting the evidence needed to understand exactly how it works. One implication of what they are learning: Prices haven't bottomed yet. A standard theory of how commodity bubbles form begins with an imbalance between supply and demand. This raises prices and prompts some stockpiling, due either to worries about having enough or hopes of selling for more in the future. This curbs supply further, pushing prices higher still. Cautionary stockpiling morphs into hoarding, and the bubble inflates. Yet it is hard to see exactly how these bubbles play out, says Princeton University economist Harrison Hong, as commodity markets are complex networks of suppliers, middlemen and consumers. When highs in 2011, it was clear hoarding was happening, but nobody knew how much. Big producers including India and Brazil didn't provide stockpile data. When The Wall Street Journal visited China's Shandong province that January, farmers were storing thousands of pounds of cotton in their homes. Cotton has fallen about 70% from its peak. Recently, though, researchers have accessed a huge data set on consumer behavior. For the Nielsen Homescan Panel, a partnership between Nielsen and the University of Chicago Booth School of Business, 100,000 U.S. households record the bar codes on every packaged item they buy. Working with University College London economist Áureo de Paula and New York University economist Vishal Singh, Mr. Hong used the Homescan data to , in rice. This started in late 2007 when India, worried about food security, banned rice exports. Fears of shortages emerged and panic buying ensued. The U.S. didn't face a rice shortage, but prices still shot higher, and people started to hoard. Costco Wholesale and Sam's Club even bulk purchases. The economists found some surprises. For example, while one might think lower-income households are more prone to panic over rising prices, those with higher incomes hoarded the most. Maybe they watched the news more closely or just had more money to buy rice. The really odd thing was that a bunch of households who hadn't bought rice before did so during the crisis, then never did again. They may have been reselling it, but more likely is that they just got swept up by the situation. Rice prices have fallen by roughly half since early 2008. The takeaway: Commodity bubbles feed on irrational behavior and don't last forever. Eventually, high prices encourage lower consumption and more supply. Prices ease, and stockpiles are run down. Middlemen who were looking to profit on perceived shortages start selling to limit losses. Maybe they weren't in a bubble, but the two largest commodity producing industries, oil and steel, are seeing something like that now as prices for crude and iron ore, used to make steel, tumble. Now, imagine there was a bit more than just ordinary stockpiling going on. Driven by expectations that rising global consumption would keep outstripping supply, people got swept up into the same sort of scarcity mind-set as those peculiar rice hoarders. Certainly, iron ore and other metals played a significant part as speculative collateral in the rapid boom in "shadow lending" in China that Beijing is now squeezing. In the U.S., there was an expensive land grab by exploration and production companies, financed by everyone from regional banks to private-equity firms, convinced that triple-digit oil was a given. That is now teeing up a potential crisis in the high-yield bond market. As reality sinks back in, it is possible prices have a lot further to fall. Write to Justin Lahart at Credit: By Justin Lahart
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635914512
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635914512?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed Likely to Stare Down Oil-Price Drop; Officials Poised to Put More Weight on Economic Strength Than Low Inflation
Author: Zumbrun, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Dec 2014: n/a.
Abstract:
Fed Vice Chairman Stanley Fischer, speaking at a recent Wall Street Journal event, said that "if the labor market continues to strengthen and if we see some signs of inflation beginning to increase, then the natural thing is to get the interest rate up." The low inflation associated with falling oil prices could add to pressure on the European Central Bank and Bank of Japan to amp up easy-money policies, even as the Fed moves toward tightening.
Full text: Much has changed in the U.S. economy since Federal Reserve officials last issued their economic projections, in September. Oil prices have fallen by more than one-third, the dollar has climbed 5.3% against a broad basket of currencies and about 800,000 more Americans have found jobs. These developments present overlapping challenges as Fed Chairwoman Janet Yellen and her central-bank colleagues wrestle with shifting fundamentals at home and mounting jitters overseas. She will hold a news conference Wednesday, after the Fed's two-day policy meeting, to discuss the central bank's outlook and plans going into 2015. Falling oil prices are a boost to the U.S. consumer. But lower prices also are putting downward pressure on already low inflation, potentially moving the nation further away from the Fed's objective of 2% annual increases in consumer prices. If Ms. Yellen and her colleagues put more weight on the looming inflation drop, they will hold off on interest-rate increases, which are expected by mid-2015. If they put more weight on underlying economic strength, they will proceed as planned, or even accelerate their move. The signs so far are that the Fed will proceed as planned. "Falling energy prices are beneficial for our economy," New York Fed President William Dudley said in a speech earlier this month. Fed Vice Chairman Stanley Fischer, speaking at a recent Wall Street Journal event, said that "if the labor market continues to strengthen and if we see some signs of inflation beginning to increase, then the natural thing is to get the interest rate up." Paul Edelstein, director of financial economics at IHS Global Insight, forecasts that if oil averages $60 a barrel next year--roughly its current level--the economy would grow 2.7% and unemployment would end the year at 5.5%, within the Fed's range of estimates for its longer-run goal. But under that scenario, inflation would average just slightly above zero next year. The Fed has stared down swings in the oil market before. Prices soared in 2008 and 2011, driving the consumer-price index as high as 5.6% in 2008 and 3.9% three years later. But the Fed ignored calls to tighten policy to tamp down prices. An important wild card that could change the Fed's mind this time is not what happens to inflation today, but what the public expects it to do in the future. In the past, the Fed has put great emphasis on changing inflation expectations, the theory being that if households and businesses expect inflation to rise substantially or fall substantially, it will become a self-fulfilling prophesy when individuals and executives lock in price or wage contracts. Market measures of inflation expectations have softened. One measure watched closely by the Fed, which tracks expected inflation starting five years from now and running five years from that date, has fallen below 2% for the first time since 2008. Minneapolis Fed President Narayana Kocherlakota dissented from the Fed's October decision to end a long-running bond-buying program, citing lower inflation expectations as potentially raising "doubts in households and businesses." Of late, however, most Fed officials seem prepared to look through this development, noting that surveys of households suggest inflation expectations remain stable. The globe's response to low oil prices presents another challenge for Ms. Yellen. The rest of the world, particularly the troubled eurozone, might not enjoy the same benefits because "oil is more important to our economy than it is to Europe," said Jay Bryson, global economist for Wells Fargo. "There's much more public transportation in Europe than there is here." For the world's leading advanced economies, "it's clearly a benefit, but it's not like it's going to cause the eurozone to grow," said Mr. Bryson. The low inflation associated with falling oil prices could add to pressure on the European Central Bank and Bank of Japan to amp up easy-money policies, even as the Fed moves toward tightening. That divergence in monetary policy could drive the dollar higher still, putting new strains on American exports. There is a recent historical parallel. In the late 1990s, in an environment of economic stress in emerging markets, including Russia, Thailand and Korea, oil prices fell by more than half, from over $26 in early 1997 to under $11 by the end of 1998. The dollar strengthened, interest rates stayed low, and U.S. inflation remained muted. All the while, the U.S. labor market heated up, pushing the unemployment rate below 4% for the only time since the 1960s. It's hard to imagine another American boom like that now, after so many years of slow growth. And it's worth remembering that if the U.S. gets one, the last round created a technology and stock-market bubble that burst by 2001, leading to more than a decade of economic turbulence from which the Fed and Americans are still recovering. Write to Josh Zumbrun at Credit: By Josh Zumbrun
Subject: Central banks; Monetary policy; Inflation; Consumer Price Index; Eurozone; Households
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 14, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635914581
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635914581?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Emerging Markets See Equity Markets, Currencies Decline; Jitters Rise Over Falling Oil Prices, Fed Policy Outlook
Author: Hong, Nicole; Trivedi, Anjani
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
"If the Fed indicates that interest rates are going to be raised earlier rather than later...that's likely to have a further negative impact on emerging markets," said Clem Miller, a portfolio manager at Wilmington Trust in Baltimore, which oversees $80 billion and has bearish bets on emerging-market stocks and bonds.
Full text: Markets across the developing world fell on Monday, on heightened jitters over falling oil prices and U.S. monetary tightening. Currencies were especially hard hit, with the Russian ruble and Turkish lira plunging to record lows against the dollar. The Brazilian real, South African rand and Indonesian rupiah also sank to fresh multiyear lows. Analysts say there was no specific catalyst for the selloff, but a number of factors converged to put downward pressure on emerging markets. Global oil prices continued to tumble, exacerbating problems for oil-exporting countries like Russia and Colombia. The Federal Reserve is also scheduled to issue a statement on Wednesday, which could signal that the central bank is closer to raising interest rates. That would deliver a blow to emerging markets that have benefited from years of easy money from the Fed. As investors scrambled to dump their risky assets, the selloff in emerging markets spread beyond oil exporters into countries like India and Indonesia, which had been relatively resilient in recent weeks. "There's just a lot going on in emerging markets, and investors are having some difficulty absorbing that information and figuring out what will happen next," said Lucas Turton, chief investment officer of Windham Capital Management LLC in Boston, which manages $1.8 billion and cut back on its exposure to emerging-market stocks two months ago. In afternoon trading in New York, the dollar was up 3.1% against the lira, with the Turkish currency trading at 2.3706 to the greenback. The real was off more than 1% at 2.6884 to the dollar, while the ruble plunged by more than 10% to trade recently at 65.615 to the dollar. Investors may be pre-emptively selling emerging-market assets ahead of the Fed statement on Wednesday. The statement is likely to "reinforce the divergence between the policy stance of the Fed and other major central banks," said Mitul Kotecha, head of foreign exchange strategy at Barclays in Singapore. The Fed is expected to raise interest rates next year as the economy improves, while central banks in Europe and Japan are pursuing strategies to stimulate growth and inflation. This divergence has caused the dollar to soar against currencies around the world in recent months. "If the Fed indicates that interest rates are going to be raised earlier rather than later...that's likely to have a further negative impact on emerging markets," said Clem Miller, a portfolio manager at Wilmington Trust in Baltimore, which oversees $80 billion and has bearish bets on emerging-market stocks and bonds. Mr. Miller said he hasn't had such a small exposure to emerging markets since the early 2000s. Thai stocks were one of the biggest victims of the broader selloff on Monday, collapsing over 9% at one point before recovering. The plunge prompted the country's finance minister, Sommai Phasee, to urge investors to remain calm. "The fall is in line with overseas market movement," Mr. Sommai told reporters. "Trust me, if it can go down, it can go up." Many investors are bracing for turmoil in emerging markets as the dollar strengthens, making it more expensive for these countries to pay back international debt, and as U.S. growth beats much of the rest of the world. For instance, Indonesian companies have issued $11.4 billion of foreign-currency debt so far this year, according to Dealogic, putting them at risk for what analysts call a "currency mismatch." This means these companies could struggle to pay off their dollar debts as their local currency, the rupiah, weakens in value against the greenback. Stephen Jen, founding partner of hedge fund SLJ Macro Partners, said emerging-market currencies could "melt down" as investors accelerate their selling. "Nothing the [emerging market] economies can do will stop these potential outflows, as long as the U.S. economy recovers," Mr. Jen said. Write to Nicole Hong at and Anjani Trivedi at Credit: By Nicole Hong And Anjani Trivedi
Subject: Emerging markets; American dollar; Interest rates; Stocks; Currency
Location: United States--US Russia Colombia
People: Abe, Shinzo
Company / organization: Name: Windham Capital Management LLC; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635996296
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635996296?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner . Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Junk-Bond Worries Spread Beyond Oil; A Pullback From Junk Bonds Can Be Harbinger That Risk Is Being Reassessed
Author: Burne, Katy; Zuckerman, Gregory; Copeland, Rob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said. Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper.
Full text: The oil bust is exposing cracks in the $1.3 trillion junk-bond market, putting pressure on a key source of corporate financing and potentially crimping economic growth. U.S. junk-bond prices have fallen 8% since late June, according to data from Barclays PLC. One-third of that drop has come this month alone, putting the market on track for its worst annual performance since the financial crisis. While much of the stress has been in the energy sector on the heels of the sharp decline in oil prices, lately the woe is spreading across the junk market. Each of the 21 high-yield sectors in a U.S. junk-bond index tracked by J.P. Morgan Chase & Co. registered losses in the five days ended Dec. 9. "Oil prices have crushed the energy sector and it's leaking elsewhere," said Andrew Herenstein, co-founder of Monarch Alternative Capital LP, which manages $5 billion and is among the largest investors in distressed debt. Debt is generally deemed to be distressed when investors view it as at high risk of missing bond payments or of a restructuring, at least at some point. A pullback from junk bonds is often a harbinger of a broader reassessment of risk across financial markets, raising the possibility that investors could turn more wary of stocks and other assets. Skeptics warned earlier this year that the junk market was becoming overheated, pointing to the risk of a larger-than-expected retreat. A raft of postcrisis rules have hit securities-dealing banks, hampering the ability of those middlemen to cushion a selloff, especially in risky assets. Many say the changing role of those dealers is exaggerating the price drops, raising the risk of indiscriminate selling, or "fire sales." "The problem with high yield is often that investors have to sell what they can, not what they want to," said Peter Tchir, managing director at Brean Capital LLC, an investment bank and asset manager. The junk selloff comes as investors are uneasy about the global economy and Federal Reserve interest-rate increases that many expect to begin next year. Junk bonds, like stocks, have mostly proved resilient, bouncing back after modest pullbacks. Both these bonds, and stocks, could again resist a deep drop. But some are betting this current junk-bond decline will deepen, if investors are caught off guard by a slowdown in growth, a corresponding rise in defaults and dealer difficulty in absorbing all the selling. Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents. Some investors worry the selling could feed on itself, sending up yields, stalling issuance and prompting restructurings or bankruptcies, analysts said. Weakening demand for junk bonds has investors demanding a more generous yield to purchase these bonds rather than safer debt. Junk bonds now trade at a yield of 5.28 percentage points above yields of comparable U.S. Treasurys, up from 3.23 points at their June low for the year. Investors' "panicky logic" also includes some "nervousness" ahead of a meeting this week when the Fed may provide updated signals on interest rates, said Anthony Valeri, investment strategist at LPL Financial, which directly oversees or advises on $415 billion of assets. U.S. high-yield bonds have returned just 0.78% this year, including price action and dividends, according to Barclays, putting the debt on track for its worst showing since 2008. Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said. Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper. Investors withdrew an additional $1.9 billion in the latest week ended Wednesday. To be sure, the factors that have supported the junk-market rally since 2009 remain largely in place. The U.S. economy is growing, with job creation expanding last month at the fastest clip since the tech boom of the late 1990s, and interest rates and defaults remain low. Despite the issuance slowdown, financing remains broadly available and defaults are low. What's more, high-returning investments remain scarce amid low yields on safer bonds, meaning that many investors retain the "reach for yield" mentality that favors risk taking in income-generating securities. "These bonds have been beaten up tremendously and they're not all going to default," said Brendan Dillon, senior investment manager at Aberdeen Asset Management Inc. Mr. Dillon said he has added 1% to 2% to the firm's energy exposure within its high-yield funds because those bonds were oversold. Still, traders are scurrying to reposition. Daily high-yield trading volumes earlier this month reached an average of $8.2 billion, said J.P. Morgan, just shy of their October record and up from the daily average of $5.6 billion in 2013. Junk-bond issuance has slowed. Companies such as Dallas refiner Alon USA Energy Inc. have pulled deals. Units of casino and resorts operator Parq Holdings LP and food and beverage giant JBS USA also canceled planned bond sales this month, according to Leveraged Commentary & Data. JBS didn't respond to a request for comment. Parq had no comment. Still, some see a buying opportunity at hand. Investors will "try to sell all or a lot of their energy holdings somewhat indiscriminately...and when the dust settles some investors have an opportunity," said David Breazzano, chief investment officer at money manager DDJ Capital Management LLC, which oversees about $8 billion. Matt Wirz contributed to this article. Write to Katy Burne at , Gregory Zuckerman at and Rob Copeland at Credit: By Katy Burne, Gregory Zuckerman And Rob Copeland
Subject: Junk bonds; High yield investments; Interest rates; Prices; Economic crisis; Stocks
Location: United States--US
People: Birnbaum, Joshua
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Tilden Park Capital Management LP; NAICS: 525990; Name: Monarch Alternative Capital LP; NAICS: 523920, 523930; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1635997343
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1635997343?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
We Must Transport Our Shale-Oil Bounty With Safety
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Dec 2014: A.12.
Abstract:
[...]the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment.
Full text: The article "Shale Oil's Secret Routes to Market" (page one, Dec. 4) makes several references to a refinery owned by a subsidiary of PBF Energy Inc. PBF has had an open and informative relationship with the local community and governmental agencies regarding our rail operations. In addition to our efforts with the community, since earlier this year the company has followed a policy that it will allow only the much safer, new-design railcars to discharge at our facility. While we don't have control over rail movement in the oil fields or outside our facilities, we have been in continuous discussions with the railroads that service the Delaware community to emphasize our interest in running the safest operation possible. Thomas D. O'Malley Executive Chairman PBF Energy Inc. Parsippany, N.J. --- In the Hudson River Valley, 1.6 billion gallons of Bakken crude oil travels via Albany, N.Y., annually by barge, tanker and rail, along one of America's most populous and biologically diverse estuaries. Empty tank cars have derailed in three accidents, and a tanker carrying Bakken crude downriver punctured in 2012, but luckily lost none of its 12-million-gallon cargo. Scenic Hudson, an environmental organization, has called for a ban on the transport of crude oil on the Hudson River until safe conditions can be established. Government officials have dismissed this as impractical. Immediate steps are needed to prevent a catastrophic accident. New York's legislature must raise fees on transported crude to increase the Oil Spill Fund. And the U.S. Coast Guard must dramatically ramp up its spill-response capability throughout the Hudson estuary. Since every minute counts in a spill in a tidal river, the existing vessel in New York Harbor must be supplemented with upriver boats and equipment. The state should also require the companies profiting from crude transport to berth a response vessel upriver. Ned Sullivan President Scenic Hudson Inc. Poughkeepsie, N.Y. --- Each year railroads train more than 20,000 first responders in their communities on railroad hazmat emergency response, as well as offer advanced crude oil-by-rail training at a specialized facility in Colorado. Railroads also maintain detailed emergency response plans, and in November the industry called on the federal government to issue railroad spill plan regulations similar to those governing pipelines. In addition, the rail industry has launched a mobile application that provides emergency responders immediate access to accurate, real-time information about railcars carrying hazardous materials on a train. Edward R. Hamberger Chief Executive Association of American Railroads Washington
Subject: Railroad transportation; Railroad accidents & safety
Location: Delaware
People: O Malley, Thomas D
Company / organization: Name: Scenic Hudson; NAICS: 813410; Name: PBF Energy; NAICS: 324110; Name: Coast Guard-US; NAICS: 928110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2014
Publication date: Dec 15, 2014
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636094206
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636094206?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
UAE Minister Sees Emergency OPEC Meeting as Premature; Average OPEC Members' Crude Oil Price Stood at $58.65 on Friday
Author: Said, Summer; Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: DOHA, Qatar--OPEC won't have an emergency meeting unless something drastic happens in the market, and the group won't cut its production now as the move would only provide a temporary fix to the price drop, the United Arab Emirates' oil minister said Monday. "I think it's premature personally to have a meeting," minister Suhail Al Mazrouei told reporters on the sidelines of an energy event in Doha. "We haven't even started 2015. We said earlier that we need to be patient and that we are not targeting a certain price." The Organization of the Petroleum Exporting Country's basket of crudes fell below $60 a barrel on Friday for the first time since oil prices began sliding this summer. The average price of crude oils from the 12 members of the Organization of the Petroleum Exporting Countries stood at $58.65 a barrel Friday, the group said. Meanwhile, and were close to fresh multiyear intraday lows. "We are all in pain because we don't like what we are seeing," Mr. Mazrouei said. "We don't like the fall in prices. This is not something someone is enjoying and the others are not enjoying. Everyone is in pain." The majority of OPEC members need prices at $100 a barrel or above to balance their government budgets. Despite the drops world-wide, Mr. Mazrouei remained firm in his resolve not to have an emergency meeting. "It's not fair and does not make sense for someone to reduce his production and others are enjoying [higher prices], because then I'm subsidizing that, and that does not make sense in any market," he said. Mr. Mazrouei said that higher-cost oil producers such as U.S. shale oil producers should act as the swing producer in oil markets rather than OPEC members. "We cannot just cut production every time someone oversupplies the market," he said. "It's not sustainable in my view....We took the right decision in my view and that right decision is to let the market stabilize itself." Benoît Faucon contributed to this article. Write to Summer Said at and Asa Fitch at Credit: By Summer Said And Asa Fitch
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16361 37031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636137031?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
European Stocks Extend Losses; Renewed Slump in Oil Prices Drags Down Stocks, Currencies Linked to Energy Prices
Author: Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: The fallout from a renewed slump in oil prices jolted European markets Monday, dragging down stocks and hammering currencies linked to energy prices. The slump in crude prices--the Brent benchmark is down more than 44% this year--is partly the result of supply glut, but has also stoked fears about weak growth in global demand prompting investors to retreat from risky assets. On Monday, the Russian ruble, the most notable victim, by more than 10% to a fresh low of more than 65 to the dollar. In equity markets, the Stoxx Europe 600 closed 2.2% lower after an early rebound faded. The index had slumped more than 5% last week amid jitters over and concerns that a is a sign of global economic weakness. Those losses continued as an early , with mining companies and oil producers leading the declines. "The relentless decline in oil prices continues to unsettle markets," said analysts at Barclays. Also rumbled by the decline in commodities prices, the Indonesian rupiah hit its in a sharp slide. India's rupee also hit its lowest point since January. With the recent declines further dragging on already-weak inflation, global central banks are coming under increasing pressure to stick to looser monetary policies for longer. The U.S. Federal Reserve will meet Wednesday. "Investors will be hoping that the Fed can prove a calming influence," said Ian Williams, economist and strategist at brokerage Peel Hunt. European indexes plunged, with Germany's DAX losing 2.7%, France's CAC 40 falling 2.5%, and London's FTSE 100 down 1.9%. Earlier, worries about a had weighed on In the U.S., the S&P 500 gave up early gains to trade 0.3% lower. Greece's Athex index, which plummeted last week after the government brought forward a parliamentary vote for a new president, bucked the trend, climbing 1.5%. The first round takes place Wednesday, with that a failure by the government to secure victory for its nominee could trigger a general election--a worry while radical left party Syriza leads in the polls, although the most recent suggests . Yields on Greek government bonds eased from their recent, highs having surged last week. The 10-year bond yield fell to 8.68%, reflecting a rise in prices. French 10-year yields were a touch lower at 0.89%, showing little reaction to by Fitch Ratings. In currency markets, the Japanese yen advanced after Prime Minister Shinzo Abe's in Sunday's snap election. The dollar was down 0.8% against the yen at ¥117.85. In commodities markets, gold was 0.7% lower at $1,214.60 an ounce. Write to Tommy Stubbington at Credit: By Tommy Stubbington
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636137341
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636137341?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Junk-Bond Worries Spread Beyond Oil
Author: Burne, Katy; Zuckerman, Gregory; Copeland, Rob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Dec 2014: C.1.
Abstract:
Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said. Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper.
Full text: The oil bust is exposing cracks in the $1.3 trillion junk-bond market, putting pressure on a key source of corporate financing and potentially crimping economic growth. U.S. junk-bond prices have fallen 8% since late June, according to data from Barclays PLC. One-third of that drop has come this month alone, putting the market on track for its worst annual performance since the financial crisis. While much of the stress has been in the energy sector on the heels of the sharp decline in oil prices, lately the woe is spreading across the junk market. Each of the 21 high-yield sectors in a U.S. junk-bond index tracked by J.P. Morgan Chase & Co. registered losses in the five days ended Dec. 9. "Oil prices have crushed the energy sector and it's leaking elsewhere," said Andrew Herenstein, co-founder of Monarch Alternative Capital LP, which manages $5 billion and is among the largest investors in distressed debt. Debt is generally deemed to be distressed when investors view it as at high risk of missing bond payments or of a restructuring, at least at some point. A pullback from junk bonds is often a harbinger of a broader reassessment of risk across financial markets, raising the possibility that investors could turn more wary of stocks and other assets. Skeptics warned earlier this year that the junk market was becoming overheated, pointing to the risk of a larger-than-expected retreat. A raft of postcrisis rules have hit securities-dealing banks, hampering the ability of those middlemen to cushion a selloff, especially in risky assets. Many say the changing role of those dealers is exaggerating the price drops, raising the risk of indiscriminate selling, or "fire sales." "The problem with high yield is often that investors have to sell what they can, not what they want to," said Peter Tchir, managing director at Brean Capital LLC, an investment bank and asset manager. The junk selloff comes as investors are uneasy about the global economy and Federal Reserve interest-rate increases that many expect to begin next year. Junk bonds, like stocks, have mostly proved resilient, bouncing back after modest pullbacks. Both these bonds, and stocks, could again resist a deep drop. But some are betting this current junk-bond decline will deepen, if investors are caught off guard by a slowdown in growth, a corresponding rise in defaults and dealer difficulty in absorbing all the selling. Joshua Birnbaum, the ex-Goldman Sachs Group Inc. trader who made bets against subprime mortgages during the financial crisis, now has more than $2 billion in wagers against high-yield bonds at his Tilden Park Capital Management LP hedge-fund firm, according to investor documents. Some investors worry the selling could feed on itself, sending up yields, stalling issuance and prompting restructurings or bankruptcies, analysts said. Weakening demand for junk bonds has investors demanding a more generous yield to purchase these bonds rather than safer debt. Junk bonds now trade at a yield of 5.28 percentage points above yields of comparable U.S. Treasurys, up from 3.23 points at their June low for the year. Investors' "panicky logic" also includes some "nervousness" ahead of a meeting this week when the Fed may provide updated signals on interest rates, said Anthony Valeri, investment strategist at LPL Financial, which directly oversees or advises on $415 billion of assets. U.S. high-yield bonds have returned just 0.78% this year, including price action and dividends, according to Barclays, putting the debt on track for its worst showing since 2008. Junk bonds returned 7.44% last year and 15.8% in 2012, Barclays said. Since June, investors have yanked more than $22 billion from funds dedicated to junk bonds, according to fund tracker Lipper. Investors withdrew an additional $1.9 billion in the latest week ended Wednesday. To be sure, the factors that have supported the junk-market rally since 2009 remain largely in place. The U.S. economy is growing, with job creation expanding last month at the fastest clip since the tech boom of the late 1990s, and interest rates and defaults remain low. Despite the issuance slowdown, financing remains broadly available and defaults are low. What's more, high-returning investments remain scarce amid low yields on safer bonds, meaning that many investors retain the "reach for yield" mentality that favors risk taking in income-generating securities. "These bonds have been beaten up tremendously and they're not all going to default," said Brendan Dillon, senior investment manager at Aberdeen Asset Management Inc. Mr. Dillon said he has added 1% to 2% to the firm's energy exposure within its high-yield funds because those bonds were oversold. Still, traders are scurrying to reposition. Daily high-yield trading volumes earlier this month reached an average of $8.2 billion, said J.P. Morgan, just shy of their October record and up from the daily average of $5.6 billion in 2013. Junk-bond issuance has slowed. Companies such as Dallas refiner Alon USA Energy Inc. have pulled deals. Units of casino and resorts operator Parq Holdings LP and food and beverage giant JBS USA also canceled planned bond sales this month, according to Leveraged Commentary & Data. JBS didn't respond to a request for comment. Parq had no comment. --- Matt Wirz contributed to this article. Credit: By Katy Burne, Gregory Zuckerman and Rob Copeland
Subject: High yield investments; Interest rates; Prices; Economic crisis; Stocks; Junk bonds
Location: United States--US
People: Birnbaum, Joshua
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Tilden Park Capital Management LP; NAICS: 525990; Name: Monarch Alternative Capital LP; NAICS: 523920, 523930; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 15, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636139176
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636139176?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Fall to Fresh Lows; Concerns Over Glut of Oil Outweigh News of Reduced Libyan Exports
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: Oil prices tumbled for a fourth straight session, extending this year's steep losses fueled by a persistent surplus of crude supplies. The spate of declines has sent the benchmark price for U.S. oil 48% lower in the past six months, underscoring how investors and traders see few signs of pullback in production big enough to stabilize the market. "The sellers are still in charge, and it seems like the market really hasn't bottomed," said Gene McGillian, senior analyst at Tradition Energy. Oil for January delivery fell $1.90, or 3.3%, to close at $55.91 a barrel, the lowest level since May 2009 on the New York Mercantile Exchange. Brent crude, the global benchmark, slid 1.3% to $61.06 a barrel, the lowest level since July 2009, on ICE Futures Europe. Prices had risen earlier in Monday's session after armed clashes in Libya over the weekend disrupted oil exports. A quadrupling of Libya's oil output in a matter of months earlier this year is a major factor behind the global supply glut that has weighed on prices. But some previous disruptions to Libyan shipments were quickly resolved. Any interruption would have to be sustained to set even a temporary floor under prices, analysts said. "The market gave, basically, an over-the-shoulder glance [to the Libya news] and left it in the rearview mirror," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Oil has a lot of moving pieces moving against it right now." In addition to Libya's supplies, the U.S. is pumping oil at the fastest rate in almost 30 years. These barrels are hitting the market in an environment of sluggish demand growth. On Friday, the International Energy Agency in 2015 for the fifth time in six months. And the Organization of the Petroleum Exporting Countries is signaling that it's holding fast to its November decision to maintain its production target. Nymex crude plummeted 10% on the day after the last OPEC meeting, which fell on the U.S. Thanksgiving holiday. The United Arab Emirates' oil minister said Monday that OPEC won't call an emergency meeting unless something "drastic" happens, without elaborating. The cartel's next scheduled meeting is in June. The head of OPEC, Abdalla Salem el-Badri, said Sunday that the group hasn't set a target for the oil price, and analysts said he appeared to imply the organization would tolerate much lower prices. "No target price," said Mr. Badri, speaking at an event in Dubai. The price basket of 12 OPEC crudes fell below $60 a barrel Friday for the first time since July 2009. The majority of OPEC members need prices at $100 a barrel or above to balance their government budgets. Falling oil prices have hurt the currencies of oil-producing nations, including Russia and Nigeria, and weighed on energy stocks and junk-bond prices. Relatively cheap oil is expected to boost global economic growth next year, as consumers will save money on petroleum products and be able to spend more elsewhere. Market watchers this week will be looking at data on the health of the major global economies to gauge whether sluggish demand will continue into 2015. The U.S., China and Europe are scheduled to release manufacturing data on Tuesday. The U.S. Federal Reserve will meet this week, with a monetary-policy statement due on Wednesday after the meeting. "The market will be looking for news to see whether we have found a bottom," said Tamas Varga, analyst at PVM. "We are probably not just there yet, but we are close." While many traders dismiss the potential impact of the latest Libya outage, a prolonged interruption could lead to tighter supplies of high-quality oil coveted by refiners. Libya told customers it might not be able to meet contractual obligations for crude deliveries from two key ports, a top oil official told The Wall Street Journal on Sunday, as armed clashes disrupted about half of the country's crude export capacity. Samir Kamal, head of planning at Libya's state-run National Oil Co., said oil flows from fields supplying the terminals have been interrupted. The two ports typically ship 560,000 barrels a day combined. The two terminals reopened this summer after a one-year interruption. January reformulated gasoline blendstock, or RBOB, fell 2.09 cents, or 1.3%, to $1.5764 a gallon. January diesel slipped 1.43 cents, or 0.7%, to $2.0017 a gallon. Benoît Faucon, Summer Said, Asa Fitch and Nicolas Parasie contributed to this article. Write to Nicole Friedman at and Georgi Kantchev at Credit: By Nicole Friedman And Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636163351
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636163351?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheap Oil Won't Drive China's Sluggish Cars; Price Drop Doesn't Affect Sales Like it Does in U.S.--Broader Economy Matters More
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
Auto sales in China skyrocketed in 2009 to make it the world's largest car market, as authorities cut taxes for cars, and the economy boomed.
Full text: The cheapest oil price in five years may be . Yet in the world's largest car market, sales are down to their slowest in almost two years. China's consumers bought just compared with the year earlier, a sharp slowdown from the 16% growth seen in 2013. Though China's car market is still maturing and hard to fully read, cheaper oil probably won't rekindle its romance for the road. One key difference in China is the price drivers see at the pump. China's retail fuel prices are partially regulated. Though they're supposed to track international prices every 10 days, they're subject to regulators' mercurial discretion. Last Friday, authorities lowered the price of gasoline but upped the tax. China's gasoline taxes also make up a bigger chunk of what consumers pay at the pump, meaning international prices pass through less. Retail gasoline prices are down 19% since crude began falling in June, according to Jefferies data. American drivers have seen a 27% drop in that period. Another difference is that Chinese don't use their cars as much--and therefore care less about oil. New cars in their first few months travel as much as 30% less in China than in the U.S., based on a 2014 survey of new car owners by J.D. Power, though the data aren't fully comparable because of differing survey techniques. Rather than operating affordability, broader trends drive Chinese car buyers. Auto sales in China skyrocketed in 2009 to make it the world's largest car market, as authorities cut taxes for cars, and the economy boomed. Car sales slowed in the past year, partially because of the economy, but also because of government restrictions on acquiring license plates to lessen traffic and pollution. More than the price of oil, Chinese car-sales growth seems to track closer to liquidity and credit creation, according to Sanford C. Bernstein. A recent interest-rate cut in theory could boost sales if it trickles through to car financing, which is slowly picking up in a nation that still has a lot of cash buyers. Still, like it did in the past. The world's largest car market will need to find a new source of fuel. Write to Abheek Bhattacharya at Credit: By Abheek Bhattacharya
Subject: Gasoline prices; Automobile industry; Automobile sales
Location: China
Company / organization: Name: J D Power & Associates; NAICS: 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636182537
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636182537?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Fall Along With Oil Prices; Long-Term Investors Hesitate to Make New Bets on Equities Before End of Year
Author: Scaggs, Alexandra; Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
Investors will be looking for any Fed reaction to the downturn in oil prices and weak inflation, as well as hints on the outlook for interest-rate increases, widely expected next year. In corporate news, shares of PetSmart Inc. rose 4.2% after the pet-supply retailer agreed to be bought by a group led by BC Partners Inc. for more than $8.2 billion, the biggest private-equity buyout this year.
Full text: U.S. stocks fell Monday amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting. The Dow Jones Industrial Average lost 99.99 points, or 0.6%, to 17180.84. The S&P 500 index declined 12.70 points, or 0.6%, to 1989.63. The Nasdaq Composite Index fell 48.44 points, or 1%, to 4605.16. Stocks swung lower alongside crude-oil prices during the session. Broadly, strategists and investors say the continuing drop in oil should be good for U.S. stocks, since it gives consumers and companies a break on energy costs. But investors who make broad, global bets worry the drop is a sign of slower-than-expected global demand. , its fourth-straight decline. Beyond those concerns, long-term investors are hesitating to make new bets on stocks before the end of this year, traders said. "It's been go-along buying and selling today. I don't see a lot of urgency," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. "No one's making any real bets." Money managers were selling some of their winning stocks, traders said, to cut back on risk in case U.S. stocks continue to fall into year-end. Utilities and health-care stocks, the best-performing sectors in the S&P 500 this year, slid more than the broader index. The Nasdaq Biotechnology Index, up 31% year-to-date, fell 2.8% on Monday. Shares of Apple, which are up 35% this year, fell 1.4%. "Momentum works in both directions," said Michael Antonelli, sales trader at brokerage firm Robert W. Baird. "When the market sells off, [fund managers] have to sell to reduce [their] risk." Stocks extended declines from last week, when the Dow made its steepest weekly drop since late 2011. But some investors said those losses were welcome, since stocks were previously trading at lofty prices. The S&P 500 is trading at 15.6 times its expected earnings for next year, according to FactSet, down from 16.2 early last week. "This correction has actually made me feel better," said Erin Gibbs, who oversees more than $10 billion for S&P Capital IQ. "We hit the top of the [valuation] range, then it started to come down." Ms. Gibbs said she hasn't made any new bets in recent sessions. In recent weeks, she bought energy stocks, since she thinks the sector's selloff has been overdone. But now, "I'm not doing anything for the rest of the year," she said. The drop in U.S. stocks was moderate compared with steep declines in emerging markets and European stocks. Europe's Stoxx 600 fell 2.2%, extending a 5% slide last week. ahead of a highly anticipated meeting of the Federal Reserve later this week, when officials could signal an increase in short-term interest rates next year. Currencies in Russia and Indonesia were hit Monday, along with markets in Malaysia and Thailand. The Fed's two-day meeting concludes Wednesday. Investors will be looking for any Fed reaction to the downturn in oil prices and weak inflation, as well as hints on the outlook for interest-rate increases, widely expected next year. Asian markets were mixed. Hong Kong's Hang Seng fell 1%. The Shanghai Composite rose 0.5%. Japan's Nikkei declined 1.6%, even as Prime Minister Shinzo Abe won an election seen as a referendum on his aggressive economic-reform efforts. Gold fell 1.2% to $1207.20 an ounce. The yield on the 10-year Treasury note rose to 2.117%. In corporate news, shares of PetSmart Inc. rose 4.2% after the pet-supply retailer agreed to be bought by a group led by BC Partners Inc. for more than $8.2 billion, the biggest private-equity buyout this year. Shares of American Realty Capital Properties tumbled 8.5% after the real-estate investment trust said its chairman and chief executive have stepped down amid an investigation into potential accounting irregularities. Write to Alexandra Scaggs at and Dan Strumpf at Credit: By Alexandra Scaggs And Dan Strumpf
Subject: Stock exchanges; Meetings; Statistical data
Location: United States--US
Company / organization: Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636182842
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636182842?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada Finance Minister Confident in Economy Amid Oil Decline; Doesn't Expect to Issue a Revised Fiscal and Economic Outlook Ahead of 2015 Budget Plan
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
Avery Shenfeld, chief economist at CIBC World Markets, said the Bank of Canada may delay an expected increase in its key interest rate next year unless crude-oil prices recover.
Full text: OTTAWA--The Canadian economy is in solid shape and the government remains on track to record a budget surplus next year amid the steep decline in oil prices, Finance Minister Joe Oliver said Monday. Mr. Oliver's comments, at a meeting here with provincial finance ministers, came as signs emerge that the energy swoon is starting to weigh on real-estate markets in resource-rich regions of the country. The has become a source of consternation in regions of Canada that rely on commodities to drive income growth. Crude oil, which fell below the $57 a barrel mark Monday, is Canada's top export, and the 40%-plus price fall from its recent peak has prompted economists to cut their growth and inflation forecasts. Mr. Oliver, though, remained bullish on the Canadian outlook. "We are confident we will achieve a budget balance next year," he said, adding that the uncertain economic outlook won't deter the government from delivering billions in promised tax relief to families. Mr. Oliver offered his upbeat view shortly before the Canadian Real Estate Association said falling crude--and the possibility of it staying low for an extended period--poses "something of a wild card" for the country's housing market. Data issued by the group on Monday indicated growth in sales in Calgary, Alberta, the financial nerve center of Canada's energy patch, slowed in November to 5.7% on a 12-month basis, compared with more standard gains of between 10% and 20% recently. Meanwhile, new listings in Calgary surged 15% in November from a year earlier. Markets generally tend to slow when listings outpace sales by a considerable margin. "We know the slowdown is coming," said Robert Kavcic, an economist at BMO Capital Markets. His firm forecasts the Alberta economy will expand at a tepid 1.8% pace in 2015, or below the projected 2.2% gain for all of Canada. The last time commodity-rich Alberta lagged behind the national economy was in 2009, during the global recession. Mr. Kavcic said also suggests inward migration into Alberta will slow from the roughly full percentage point other provinces have contributed to that province's population growth in recent years. In the oil patch, a number of companies have already announced dividend cuts and scaled-back capital spending in response to the oil-price plunge. That could be troubling to Canada's central bank, which is counting on exports and business investment to drive growth as consumption weakens. Energy companies account for over a third of nonresidential business spending in Canada. Avery Shenfeld, chief economist at CIBC World Markets, said the Bank of Canada may delay an expected increase in its key interest rate next year unless crude-oil prices recover. "The downdraft from oil is going to be significant enough to push back that timetable," he said. Last month, Mr. Oliver delivered a fall update in which Canada's for 2015 was upgraded to 2.6% and a budget surplus of 1.9 billion Canadian dollars ($1.64 billion) was projected for the fiscal year beginning April 1. However, he said the decline in crude--at a projected price of roughly $70 a barrel--would reduce the level of income from which the government derives tax revenue by C$3 billion in 2014 and C$16 billion in 2015. In Australia, lower commodity prices and tepid wage growth forced that country's government on Monday to reduce and forecast larger budget deficits than previously anticipated. Mr. Oliver, who along with his Conservative government colleagues faces re-election next year, said he doesn't expect to issue a revised fiscal and economic outlook before the government introduces its 2015 budget. Don Curren and Nirmala Menon contributed to this article. Write to Paul Vieira at Credit: By Paul Vieira
Subject: Prices; Capital expenditures; Budget deficits; Recessions; Energy industry
Location: Calgary Alberta Canada Canada
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: Canadian Real Estate Association; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636206516
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Lower Oil Prices on Canada Housing a 'Wild Card'; Declining Oil Prices Will Put Strains on Household Finances, Some Economists Say
Author: Curren, Don
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
There also is uncertainty about the impact of the recent decline in oil prices on Canada's economy and its housing market, with some economists arguing that declining oil will put additional strains on household finances, at least in some areas of the country.
Full text: TORONTO--Sales of existing homes in Canada were unchanged in November and prices continued to push higher, but the recent fall in oil prices poses "something of a wild card" for the market, the Canadian Real Estate Association said Monday. The national average sales price rose 5.7% on a year-over-year basis to 417,641 Canadian dollars ($360,035) in November, CREA said. The MLS Home Price Index, which takes into account changes in the composition of sales, rose 5.2% from a year earlier. The November data come amid heightened concern about Canada's housing market. The Bank of Canada said last Wednesday that housing is as much as 30% overvalued on a national basis, and the combination of high household debt and sky-high housing prices constitutes a significant risk to the country's financial system. Also on Monday, Statistics Canada reported that a key gauge of household debt in Canada climbed to a record high in the third quarter as Canadians accumulated debt faster than their incomes grew. There also is uncertainty about the impact of the recent decline in oil prices on Canada's economy and its housing market, with some economists arguing that declining oil will put additional strains on household finances, at least in some areas of the country. The effect of lower oil prices on Canada's housing markets is "something of a wildcard at the moment," CREA Chief Economist Gregory Klump said in a statement. "It's not clear how far oil prices may drop or for how long they'll stay down," he said. "How that plays out may affect the outlook for interest rates, job growth, consumer confidence, and sentiment about making major purchases." CREA said the number of newly listed homes edged down 0.4% from October to November, and that the market remains balanced. It said the national sales-to-new listings ratio was 56% in November. "While this is marginally tighter compared to the previous three months in which it averaged 55.7%, the broader trend for the ratio indicates that it has remained balanced and largely stable for the past four months," CREA said. November sales strengthened in half of all local markets, with monthly increases in areas such as Montreal, Edmonton, Alberta and Winnipeg, Manitoba tempered by a monthly decline in the Toronto area, CREA said. November sales were up from year-ago levels in about half all local markets. Write to Don Curren at Credit: By Don Curren
Subject: Real estate sales; Housing prices; Statistical data
Location: Canada
Company / organization: Name: Statistics Canada; NAICS: 926110; Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636206523
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636206523?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Need More Than a Crisis; Even Political Pressures Won't Address Structural Shifts in Prices
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
The International Energy Agency forecasts that global oil stocks will build by 300 million barrels in the first half of 2015.
Full text: Can Libya save Russia? With Russia's central bank announcing an increase in its key rate to 17% to try to halt the ruble's slide, the country could use a rally in oil prices. As rising supply and weaker demand have pushed Brent crude toward $60 a barrel, the market has focused on how quickly U.S. producers will pull back. That is likely to be a slow process, though, so it may take something else to rebalance oil in 2015: political crises. The market got a taste of this with news that renewed clashes in Libya could disrupt the country's oil exports, causing crude prices to rally briefly Monday morning. The increase in Libyan production to almost 900,000 barrels a day in October from roughly 250,000 in June helped spark the recent tumble in prices. Supply disruptions helped keep oil prices in triple digits until recently. They represent one big factor that could support prices now. Take two particularly vulnerable countries: Libya and Venezuela. Libya's output has fluctuated between virtually zero and 1.5 million barrels a day since 2011. In November, it produced 690,000 barrels a day. Say it went back to the lows of early summer and held there next year. That would be around half Libya's average output so far this year, meaning around 250,000 barrels less across the whole of 2015. For Venezuela, lower oil revenue adds to existing political tensions. So far this year, it has produced about 2.5 million barrels daily. In 2003, amid a general strike, output dropped briefly to less than a million barrels a day, yet still averaged just under 2.3 million barrels a day that year. Say a crisis took half a million barrels a day of Venezuelan oil off the market, combining with Libya to take out 750,000 altogether. The International Energy Agency forecasts that global oil stocks will build by 300 million barrels in the first half of 2015. Such disruptions would knock almost half off that, but still wouldn't prevent stocks from building. Granted, disruptions could be even more pronounced as falling oil prices destabilize various regimes--they are called "supply shocks" for a reason. But maybe not: Libya's output surprised in the other direction this year, after all. The bigger point for Russia, and anyone else banking on higher oil prices, is that delivering shocks might well jolt prices momentarily. But as the shale boom and energy-conservation efforts of recent years have shown, disruption can cut both ways. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Supply & demand; Crude oil prices
Location: Russia Libya Venezuela United States--US
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636218961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636218961?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Market Isn't Getting Fed's Message on Rates; Cheap Oil Is Muddying the Picture on Rate Increases
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract:
Economists polled by The Wall Street Journal see November's headline consumer-price index, out Wednesday morning, having risen by just 1.4% year over year and dropping 0.1% from October.
Full text: What happens in Riyadh stays in Riyadh. That's the message from many economists considering the effect of slumping oil prices on the Federal Open Market Committee's message to markets. Not only should the rate-setting body drop the phrase "considerable time" from its statement at the end of its two-day meeting Wednesday, but it is seen nudging the market into taking a mid-2015 end to zero rates seriously. It might seem the only fly in the ointment is inflation. Economists polled by The Wall Street Journal see November's headline consumer-price index, out Wednesday morning, having risen by just 1.4% year over year and dropping 0.1% from October. But the core figure that strips out volatile food and energy prices should be a more normal 1.74%. Economists at UBS figure gasoline prices alone subtracted 0.3 percentage points from the headline figure in November and think the same will happen this month. They see the core inflation measure favored by the Fed averaging 1.9% in 2015, just shy of its 2% target. Unfortunately, market expectations are more sanguine on interest rates, suggesting one of two things: Investors will be disappointed when the Fed sticks to its plan, or policy makers are, once again, being too optimistic. Interest-rate contracts tracked by CME Group Inc. imply only a 25% chance of a rate increase by the Fed's June 2015 meeting. The difference between what the Fed says it will do and what the market thinks may be indirectly related to crude prices. All of a sudden, global equity markets--even those countries and sectors that should be rejoicing about cheaper energy--are looking soft. Could the reason be that such an epic drop is explained by more than simply discord among large oil exporters and booming shale production in North America? If so, will cheaper oil give industrial economies a shot in the arm to offset any slow spell? It is too early to say whether there has been a worse-than-expected slowdown, perhaps in Asia or Europe or both, exacerbating oil-price weakness; real-time economic data are hazy. If so, the Fed could err on the side of caution in 2015 even if the U.S. economy keeps humming. What happens in Tokyo, Frankfurt or Beijing, after all, gets noticed in Washington. Write to Spencer Jakab at Credit: By Spencer Jakab
Subject: Consumer Price Index; Statistical data; Economists; Inflation
Location: Riyadh Saudi Arabia
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: CME Group; NAICS: 523210; Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636218968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636218968?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Yen Gains Against Dollar, Euro on Global Market Jitters; Tumbling Oil Prices Have Provoked Uncertainty and Volatility; Investors Worry About Effect on Growth
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: The yen gained against most major currencies Monday as uncertainty over falling oil prices outweighed victory by Japanese Prime Minister Shinzo Abe's Liberal Democratic Party in Sunday's general election. The dollar slid 0.9% to ¥117.76, falling 3.1% since reaching a seven-year high on Dec. 5. The euro tumbled 1.1% to ¥146.46, dropping 1.9% from a six-year high it reached on Dec. 5. The yen also strengthened at least 1.1% versus the British pound and the Australian, Canadian and New Zealand dollars. Tumbling oil prices have provoked uncertainty and volatility in many markets, as investors worry what effect the drop will have on already low inflation in many developed markets and on growth in the world's largest economies. The Russian ruble, linked to the nation's dependence on oil sales, has lost 12.7% against the dollar on the day, while the Turkish lira has tumbled 3.4%. Many equity markets across Europe declined by more than 2%, while the Nikkei benchmark stock index shed 1.6%. U.S. stock markets fell by at least 0.5% Monday. Consequently, investors are moving out of the dollar and into the yen, in the belief that the Japanese currency will retain its value until the markets regain their calm. "Anxiety is creeping back into the market, which is pushing volatility back up," said Shaun Osborne, chief currency strategist at TD Securities. "There's safe-haven buying outright, and the yen remains a haven currency." Investors were more concerned about protecting their wealth than the longer-term implications of Japan's election. The LDP's landslide win secured a fresh mandate for Mr. Abe's efforts to revitalize the nation's economy, although his policies are likely to weaken the currency, analysts said. Looking ahead, the Federal Reserve concludes its two-day policy-setting meeting Wednesday, which is expected to shed light on timing for higher interest rates in the U.S. and provide direction for the dollar. Investors have piled into bets that the dollar's value will rise, particularly against the yen and the euro, as the Fed is likely to increase rates sooner than rival central banks. Higher interest rates make the dollar more attractive, as they boost returns on assets denominated in the currency. Investors currently expect the central bank to raise U.S. rates around the middle of next year. In other trade, the euro edged 0.2% lower versus the dollar, to $1.2434. Write to James Ramage at Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636218970
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636218970?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Morning Briefing: Oil Prices Resume Slide
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG DJIA 17180.8 -99.99 -0.58% Nasdaq 4605.16 -48.44 -1.04% S&P 500 1989.63 -12.7 -0.63% Japan: Nikkei 225 17099.4 -272.18 -1.57% Hang Seng 23027.9 -221.35 -0.95% Shanghai Composite 2953.42 15.25 0.52% S&P BSE Sensex 27319.6 -31.12 -0.11% Australia: S&P/ASX 5186.1 -33.5 -0.64% UK: FTSE 100 6182.72 -117.91 -1.87% PRICE CHG YIELD% U.S. 2 Year -2/32 0.580 U.S. 5 Year -9/32 1.574 U.S. 10 Year -11/32 2.120 Australia 10 Year 3/32 2.883 China 10 Year -8/32 3.830 India 10 Year 0/32 7.836 Japan 10 Year 6/32 0.379 German 10 Year -1/32 0.629 LAST(MID) CHANGE Australia $ (AUD/USD) 0.8215 0.0004 Yen (USD/JPY) 117.94 0.11 S. Korean Won (USD/KRW) 1097.61 -0.16 Chinese Yuan (USD/CNY) 6.1902 0.0007 Euro (EUR/USD) 1.2439 0 WSJ Dollar Index 82.1 0 LAST CHANGE % CHG Crude Oil 55.32 -2.49 -4.31% Brent Crude 60.68 -1.47 -2.37% Gold 1193.6 -28.9 -2.36% SNAPSHOT Oil prices resumed their slide, settling at fresh multiyear lows on concerns about ample supplies. U.S. stocks also declined amid the continued slump in oil prices. Treasurys and gold pulled back ahead of this week's Fed meeting, which will be the last policy meeting of the year. The yen gained against the dollar and euro on global market jitters. OPENING CALL On tap Tuesday is China's HSBC Markit December preliminary "flash" purchasing managers' index. This indicator's fall to a six-month low in November was one of the pieces of data that triggered a rate cut by the People's Bank of China. If there are no other signs of a rebound, speculation will grow that the PBOC and central government will take further measures to stimulate the economy. EQUITIES U.S. stocks fell amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting. Broadly, strategists and investors say the continuing drop in oil should be good for U.S. stocks, since it gives consumers and companies a break on energy costs. But investors who make broad, global bets worry the drop is a sign of slower-than-expected global demand. Crude oil fell 3.3% to settle at $55.91 a barrel, its fourth-straight decline. Beyond those concerns, long-term investors are hesitating to make new bets on stocks before the end of this year, traders said. "It's been go-along buying and selling today. I don't see a lot of urgency," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. "No one's making any real bets." Money managers were selling some of their winning stocks, traders said, to cut back on risk in case U.S. stocks continue to fall into year-end. Utilities and health-care stocks, the best-performing sectors in the S&P 500 this year, slid more than the broader index. The Nasdaq Biotechnology Index, up 31% year-to-date, fell 2.8%. Shares of Apple, which are up 35% this year, fell 1.4%. "Momentum works in both directions," said Michael Antonelli, sales trader at brokerage firm Robert W. Baird. "When the market sells off, [fund managers] have to sell to reduce [their] risk." In corporate news, shares of PetSmart rose 4.2% after the pet-supply retailer agreed to be bought by a group led by BC Partners for more than $8.2 billion, the biggest private-equity buyout this year. Shares of American Realty Capital Properties tumbled 8.5% after the real-estate investment trust said its chairman and chief executive have stepped down amid an investigation into potential accounting irregularities. Shares of Boeing rose 2% in late trading after the company said its board authorized the repurchase of $12 billion of shares over the next two to three years and raised its quarterly dividend by 25%. In Asian trading Monday, stocks weakened as worries about a suspected terrorist attack in Australia added to pressure from declining oil prices, and slower growth in the region kept investors at bay. FOREX The yen gained against most major currencies as uncertainty over falling oil prices outweighed victory by Japanese Prime Minister Shinzo Abe's Liberal Democratic Party in Sunday's general election. Tumbling oil prices have provoked uncertainty and volatility in many markets, as investors worry what effect the drop will have on already low inflation in many developed markets and on growth in the world's largest economies. Consequently, investors are moving out of the dollar and into the yen, in the belief that the Japanese currency will retain its value until the markets regain their calm. "Anxiety is creeping back into the market, which is pushing volatility back up," said Shaun Osborne, chief currency strategist at TD Securities. "There's safe-haven buying outright, and the yen remains a haven currency." Investors were more concerned about protecting their wealth than the longer-term implications of Japan's election. The LDP's landslide win secured a fresh mandate for Mr. Abe's efforts to revitalize the nation's economy, although his policies are likely to weaken the currency, analysts said. Looking ahead, the Federal Reserve concludes its two-day policy-setting meeting Wednesday, which is expected to shed light on timing for higher interest rates in the U.S. and provide direction for the dollar. BONDS U.S. Treasury bonds pulled back on after the biggest weekly rally in more than two years as investors cashed in some chips from the haven bond market. The price decline came ahead of the Federal Reserve's two-day interest-rate-policy meeting which starts on Tuesday. It will be the central bank's last policy meeting in 2014. "There has been some decent profit-taking," said Anthony Cronin, a Treasury bond trader at Société Générale. "Also given where yields are, the risk is that the Fed isn't as dovish as the market needs them to be to sustain these levels." Some analysts said that with lower oil prices reducing inflation expectations, the Fed will continue to be patient in raising interest rates, which would encourage investors to buy bonds. The Fed is scheduled to release its policy statement at 2 p.m. Wednesday, followed by a news conference by Fed Chairwoman Janet Yellen. Some traders say bond yields would rise if the Fed highlighted the benefits of lower oil prices to the economy and signaled that the oil market's impact on inflation expectations would be temporary. COMMODITIES Oil prices fell to fresh multiyear lows as concerns about a global glut of oil outweighed news of reduced Libyan exports. "The sellers are still in charge, and it seems like the market really hasn't bottomed," said Gene McGillian, senior analyst at Tradition Energy. Prices had risen earlier in the session after armed clashes in Libya over the weekend disrupted oil exports. Libya declared force majeure on two key oil ports, a top oil official told The Wall Street Journal on Sunday, as armed clashes disrupted about half of the country's crude export capacity. Samir Kamal, head of planning at Libya's state-run National Oil Co., said oil flows from fields supplying the terminals have been interrupted. The two ports typically ship 560,000 barrels a day combined, nearly half the country's export capacity. The two terminals reopened this summer after a one-year interruption, and increased Libyan oil exports are a key reason prices have plunged in recent months. Libyan ports have closed before only to quickly reopen, Mr. McGillian said, so the closures would need to be sustained for prices to stay higher. "The market gave, basically, an over-the-shoulder glance [to the Libya news] and left it in the rearview mirror," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Oil has a lot of moving pieces moving against it right now," including ample supplies, sluggish demand and the Organization of the Petroleum Exporting Countries' November decision to maintain its production quota. Gold prices finished lower, as the dollar firmed ahead of a Federal Reserve meeting later in the week. TODAY'S HEADLINES Russia's Central Bank Raises Key Rate to 17% Russia announced it raised its key rate to 17%, effective immediately. The news comes on the heels of Russia's currency losing more than one-tenth its value Monday--and Russian firms including Sberbank and Gazprom hitting new lows--as oil gave back earlier gains to end lower. Police Say Three Dead in Sydney Cafe Siege A siege that shut down a large part of central Sydney for more than 16 hours ended in bloodshed after two hostages and their armed captor were killed when police stormed the cafe behind volleys of bullets. U.S. Industrial Production Surpasses Prerecession Peak U.S. manufacturing output climbed past its prerecession peak this fall, suggesting the American economy is on solid footing despite growing signs of weakness abroad. Separately, the New York Fed's manufacturing index sank in December, and U.S. home-builder confidence slipped. American Realty Capital's Chairman, CEO Resign American Realty Capital Properties, the real-estate investment trust under investigation for accounting irregularities, said that Chairman Nicholas Schorsch and CEO David Kay have stepped down. PetSmart to Be Acquired by BC Partners-Led Group PetSmart agreed to be bought by a group led by BC Partners for about $8.25 billion, in the largest private-equity buyout of the year. BC prevailed in the auction over rival buyout firm Apollo Global Management. Riverbed to be Acquired by Thoma Bravo Riverbed Technology agreed to be acquired by private-equity firm Thoma Bravo for about $3.6 billion, following more than a year of pressure from activist investor Elliott Management. Boeing Unveils $12 Billion Buyback Plan, Boosts Dividend Boeing said its board authorized the repurchase of $12 billion of the aerospace and defense company's shares over the next two to three years and raised its quarterly dividend by 25%. BT Group in Exclusive Talks to Buy EE BT Group said it has entered exclusive talks to buy U.K. mobile operator EE for $19.6 billion in cash and stock from Germany's Deutsche Telekom and France's Orange. UAE Minister Sees Emergency OPEC Meeting as Premature OPEC won't have an emergency meeting unless something drastic happens in the market and the group won't cut its production now as the move would provide only a temporary fix, United Arab Emirates' oil minister said. SEC Files to Drop Herbalife Insider Case The Securities and Exchange Commission moved to dismiss insider-trading charges against a man accused of profiting from privileged information tied to Herbalife. RECENT DJ DOMINANTS Boutique Hotel Operator Kimpton Hotels Seeking to Sell the Company Google Enhancing Shopping Site in Challenge to Amazon KCG Europe Offices in London Without Electrical Power for Three Hours Canada's Beacon Securities Adds Cooke to Institutional Equity Sales Desk Polish MPC Hausner: Spring Deflation Would Speak for Rate Cut TODAY'S CALENDAR (Times in GMT, followed by country and event) 0030 AUS Dec Reserve Bank Board Monetary Policy Meeting Minutes 0135 JPN Dec Japan Flash Manufacturing PMI 0145 CHN Dec HSBC China Flash Manufacturing PMI 0200 CHN Nov FDI Foreign Direct Investment 0700 UK Bank of England's Financial Stability Report 0700 UK Bank of England publishes UK stress testing results 0800 FRA Dec France Flash PMI 0830 HK Oct External Merchandise Trade: Volume & Price Statistics 0830 GER Dec Germany Flash PMI 0900 EU Dec Eurozone Flash PMI 0900 ITA Oct Foreign Trade EU 0930 UK Oct ONS House Price Index 0930 UK Nov UK producer prices 0930 UK Nov UK monthly inflation figures 1000 GER Dec ZEW Indicator of Economic Sentiment 1000 EU Oct Foreign trade 1045 UK BoE Governor Mark Carney participates in the Inspiring Women event 1100 ITA Q3 Labour Cost Index 1245 US ICSC-Goldman Sachs Chain Store Sales Index 1330 US Nov New Residential Construction - Housing Starts and Building Permits 1330 CAN Oct International transactions in securities 1330 CAN Oct Monthly Survey of Manufacturing 1355 US Johnson Redbook Retail Sales Index 1445 US Dec US Flash Manufacturing PMI 2130 US API Weekly Statistical Bulletin 2350 JPN Nov Provisional Trade Statistics for the Month
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636256662
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636256662?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tax Disputes Flare as Africa Fights 'Secret' Oil Deals; From Guinea to Uganda, Clashes Slow Key Projects
Author: Stevis, Matina; Bariyo, Nicholas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Dec 2014: n/a.
Abstract: None available.
Full text: Sitting before a parliamentary oversight committee last month, two top executives from Tanzania Petroleum Development Corp. declined to reveal details of billions of dollars in gas contracts that the state company had signed with foreign investors. Parliamentarians had a sharp riposte: They called the police. The two company board members had argued they needed permission from their investors before they disclosed details of the deal. But soon after a police officer showed up, the executives were fumbling with their paperwork, according to lawmakers who attended the hearing--but in the end, they didn't release any documents. The executives were escorted out of the parliamentary building and into a police truck. They were briefly taken into custody, detained for a few hours and released without charges. "Companies must accept the era of secrecy is over," says Zitto Kabwe, the head of the Tanzanian parliament's public-accounts committee, who witnessed the scene. TPDC declined to comment on the police detention of its executives, and Tanzania's ministry of energy and minerals didn't respond to requests for comment. Battles over contract transparency are brewing across Africa, touching on sensitive tax issues among energy and mineral giants trying to tap into a new frontier of the global economy. The clashes show how once-malleable African governments are fighting for a bigger share of earnings in sometimes-secretive deals, often following the advice of Western groups such as the Soros Foundation and the African Governance Initiative, which is headed by former British Prime Minister Tony Blair. The upshot: A raft of legal disputes that have stalled production of some key projects and frayed relationships between African governments and foreign investors. Uganda remains embroiled in a litany of tax disputes with Tullow Oil PLC and Heritage Oil Corp., nearly a decade after oil reserves were discovered. The country had amended its income-tax law to introduce a capital-gains tax on the sale of oil rights shortly after the discoveries, prompting Heritage and Tullow to contest the new tax assessments. Zambia's mining industry is faltering after the government in October decided to more than triple mine royalties to 20%, following the advice of Western groups. This compelled miners such as First Quantum Minerals Ltd. and Glencore PLC to suspend $2 billion in expansion projects. And in Guinea, disputes stemming from government changes to a lease for the Simandou iron-ore mine are dogging the project. Some experts argue the disputes reveal a blurring between demands for more disclosure from investors and more tax revenue from governments. "It's about negotiating to get a better deal in terms of money ... income, but not necessarily transparency," says Carlos Lopes, the chief of the United Nations Economic Commission for Africa. African governments have found ready partners for both endeavors. Western organizations such as the Soros Foundation, founded by hedge-fund billionaire George Soros, and international institutions like the United Nations and the World Bank are providing advisory services to resource-rich nations on how to adjust ownership structures and rejigger tax laws for a bigger slice of revenues. Some analysts say this is a necessary tilting of the scales toward African governments. "The deals often favor the companies which have access to vast experience and capital, while the governments do not have the experience, institutions or laws in place to manage their natural resources," says George Boden, an analyst with U.K.-based anticorruption group Global Witness. The African Governance Initiative--headed by Mr. Blair--has helped Rwanda become the region's first country to issue mining certificates at the point of export, in an effort to keep conflict minerals out of the supply chain. In Guinea, Mr. Soros, through his foundations, played a key role in advising the government on its review of mining deals struck by previous governments. This led to the ouster of BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz's family-owned conglomerate, from the country earlier this year and the ushering in of Rio Tinto PLC. Mr. Steinmetz has since sued Global Witness--partly funded by the Soros Foundation--which accused his company of obtaining mining rights in the country through corruption. BSG also is in international arbitration with Guinea in a bid to win compensation for being stripped of the Simandou mine. BSG Resources has denied wrongdoing and accused President Alpha Condé's government of seeking to expropriate its rights by stealth--a claim the government rejects. Simandou's current operator Rio Tinto has also sued rival Vale SA and Mr. Steinmetz, alleging that they colluded to rob the Anglo-Australian company of the highly prized iron-ore concession, further complicating the legal battles around the mine. Both parties denied Rio Tinto's allegations, which a BSG Resources spokesman called "baseless and bizarre." In Tanzania, the recent police detention of the oil-company executives capped months of a simmering row at the local parliament over whether the East African nation is getting a fair deal for its newfound vast natural-gas resources. Mr. Kabwe's fight to make all contracts public kicked off in August, when part of the contract with Norway's Statoil ASA and ExxonMobil Corp. was leaked to the local press, showing that the state-run Tanzania Petroleum Development Corporation, or TPDC, had agreed to terms yielding 30%-50% of the revenue for state coffers--well below the 50%-80% yields recommended by the World Bank and the International Monetary Fund. Tanzania in 2009 signed the Extractive Industries Transparency Initiative, an effort led by non-governmental organizations to bring contracts to light. Though most of Africa's other mineral-rich nations also are signatories, implementation has been uneven. Mr. Kabwe, who heads the parliament's public-accounts committee, ordered TPDC to bring all contracts to parliament for scrutiny, but the state-run company cited investor reluctance to publicize the terms. It didn't comply with a Nov. 3 deadline--at which point the two senior TPDC board members were briefly taken into custody. An official with TPDC said that confidentiality clauses in the deals prevent the state company from revealing them to third parties. ExxonMobil, the minority partner in the venture, referred questions to Statoil. Knut Rostad, a spokesman for Statoil, said the deal was "balanced and comparable to commercial terms in other places with similar risks." He added that his company was making a long-term commitment to the country and has already spent over $1.5 billion on exploration. But Mr. Rostad said he wouldn't comment on parliamentary debates or police detention of TPDC executives. He confirmed his company didn't release the contracts but declined to answer why, given the demands of the Tanzanian parliament. Write to Matina Stevis at and Nicholas Bariyo at Credit: Matina Stevis, Nicholas Bariyo
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 15, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636452525
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636452525?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
GE's Oil and Gas Gambit Falters; After Bulking Up Through Billions in Acquisitions, CEO Immelt to Address Impact of Crude's Collapse
Author: Mann, Ted
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Chief Executive Jeff Immelt is expected to address what the global collapse in crude oil prices means for GE's Oil and Gas unit when he briefs investors Tuesday at the company's annual outlook meeting in New York.
Full text: Oil and gas has been an exclamation point for General Electric Co. in recent years, as the company assembled a $17 billion division to take advantage of global demand for new energy resources. All of a sudden, it's starting to look like a question mark. Chief Executive Jeff Immelt is expected to address what the global collapse in crude oil prices means for GE's Oil and Gas unit when he briefs investors Tuesday at the company's annual outlook meeting in New York. The issue highlights how a company that has long been known as a maker of power generators, aircraft engines and medical devices is now a substantial energy company at a difficult time. GE has built up its oil and gas business, doing more than $14 billion worth of acquisitions since 2007 and putting one of its , Lorenzo Simonelli, in charge of the unit. But to around $60 a barrel has thrown the company's economic assumptions into question. Just three months ago, Mr. Simonelli told investors that GE's "base case assumptions" included Brent crude oil at around $100 a barrel over the next three years. January at $61.06, down another 79 cents. Already, the world's energy companies are under pressure to reconsider projects, with ConocoPhillips saying last week its capital spending would fall 20% next year. "Given what we're seeing now, if they can break even over the next 12 months, that would be a positive," said David Nelson, chief strategist at Belpointe Asset Management. "I don't see where they get the growth out of this." The dramatic shift in the oil market is putting up a new challenge for GE's efforts to shift its focus away from its giant finance business and toward industrial operations that its investors value more highly. Roughly 21% of GE's industrial revenue is exposed to the oil and gas business, analysts at J.P. Morgan Chase & Co. said earlier this month. The impact is mainly in units that provide equipment for customers that drill, pump, measure and transport oil. But GE's healthcare and power generation businesses could also feel the sting if oil prices remain depressed and weigh on the fortunes of oil-producing countries where GE has been pushing to grow its business. GE's shares have fallen about 7% in the past month. Mr. Immelt will provide more information about the effects of oil prices on GE when he speaks Tuesday, a spokesman said. On the company's in October, Chief Financial Officer Jeffrey Bornstein said the oil and gas unit had $4.9 billion in orders, a 10% increase over the previous period, but was also lowering its expectations for future growth. The company cut its outlook for order growth to a mid-single digit percentage from high single or low double digits, Mr. Bornstein said at the time. "Orders in this space are very volatile, and we continue to see some big projects pushed to the right," Mr. Bornstein said, meaning farther off into the future. Mr. Immelt said at the time that GE was monitoring the business with caution. "The underlying activity is still reasonably healthy," he said. "There are some parts that are clearly stronger than others." Some parts of the company could benefit from a drop in oil prices. Its jet engine business, for example, could benefit indirectly if fuel savings prod airlines to boost their spending on service and engine upgrades, people from the company have said. And cheaper fuel could boost other GE industrial units in areas like Europe and the U.S., offsetting declines in resource-rich developing economies more exposed to oil prices. Still, investors are concerned. "I'm afraid we're going to get a little bit of bad news on the forward look tomorrow," said Jack De Gan, chief investment officer at Harbor Advisory in New Hampshire, which owns GE stock on behalf of clients. The company could maintain its sales projections, given the business it has already lined up supporting existing oil and gas projects, he said, but in future orders projections for 2015 and 2016, "I have to believe we're going to hear some moderation." GE believes that it will be shielded in part because many of its revenues in the oil business are from services, and that wells that are already in production will stay active despite the price drop. The company has relatively less exposure, compared with peers, to onshore alternative-oil operations, like oil sands and shale, where new exploration could be expected to slow. The company also thinks it will be able to help customers pump oil and gas more efficiently, which could be at a premium as prices fall. The drop in price also could give GE an opportunity to pick up more assets at a better price if it wants to expand the business. But with the oil price rout still in its early stages, it's hard to tell where things might shake out. "It's really hard to get your arms around, because you don't know the duration," said Scott Davis, an analyst who covers GE for Barclays Capital. "If oil is low for six months, it's one thing. But if it's low for three years, that's another thing entirely." Write to Ted Mann at Credit: By Ted Mann
Subject: Crude oil prices; Petroleum industry; Crude oil; Investments; Capital expenditures
People: Simonelli, Lorenzo
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636282005
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636282005?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
GE's Oil and Gas Gambit Falters --- After Bulking Up Through Billions in Acquisitions, CEO Immelt to Address Impact of Crude's Collapse
Author: Mann, Ted
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Dec 2014: B.1. [Duplicate]
Abstract:
Chief Executive Jeff Immelt is expected to address what the global collapse in crude oil prices means for GE's Oil and Gas unit when he briefs investors Tuesday at the company's annual outlook meeting in New York.
Full text: Oil and gas has been an exclamation point for General Electric Co. in recent years, as the company assembled a $17 billion division to take advantage of global demand for new energy resources. All of a sudden, it's starting to look like a question mark. Chief Executive Jeff Immelt is expected to address what the global collapse in crude oil prices means for GE's Oil and Gas unit when he briefs investors Tuesday at the company's annual outlook meeting in New York. The issue highlights how a company that has long been known as a maker of power generators, aircraft engines and medical devices is now a substantial energy company at a difficult time. GE has built up its oil and gas business, doing more than $14 billion worth of acquisitions since 2007 and putting one of its most promising young executives, Lorenzo Simonelli, in charge of the unit. But oil's plunge to around $60 a barrel has thrown the company's economic assumptions into question. Just three months ago, Mr. Simonelli told investors that GE's "base case assumptions" included Brent crude oil at around $100 a barrel over the next three years. January Brent futures settled Monday at $61.06, down another 79 cents. Already, the world's energy companies are under pressure to reconsider projects, with ConocoPhillips saying last week its capital spending would fall 20% next year. "Given what we're seeing now, if they can break even over the next 12 months, that would be a positive," said David Nelson, chief strategist at Belpointe Asset Management. "I don't see where they get the growth out of this." The dramatic shift in the oil market is putting up a new challenge for GE's efforts to shift its focus away from its giant finance business and toward industrial operations that its investors value more highly. Roughly 21% of GE's industrial revenue is exposed to the oil and gas business, analysts at J.P. Morgan Chase & Co. said earlier this month. The impact is mainly in units that provide equipment for customers that drill, pump, measure and transport oil. But GE's healthcare and power generation businesses could also feel the sting if oil prices remain depressed and weigh on the fortunes of oil-producing countries where GE has been pushing to grow its business. GE's shares have fallen about 7% in the past month. Mr. Immelt will provide more information about the effects of oil prices on GE when he speaks Tuesday, a spokesman said. On the company's third quarter earnings call in October, Chief Financial Officer Jeffrey Bornstein said the oil and gas unit had $4.9 billion in orders, a 10% increase over the previous period, but was also lowering its expectations for future growth. The company cut its outlook for order growth to a mid-single digit percentage from high single or low double digits, Mr. Bornstein said at the time. "Orders in this space are very volatile, and we continue to see some big projects pushed to the right," Mr. Bornstein said, meaning farther off into the future. Mr. Immelt said at the time that GE was monitoring the business with caution. "The underlying activity is still reasonably healthy," he said. "There are some parts that are clearly stronger than others." Some parts of the company could benefit from a drop in oil prices. Its jet engine business, for example, could benefit indirectly if fuel savings prod airlines to boost their spending on service and engine upgrades, people from the company have said. And cheaper fuel could boost other GE industrial units in areas like Europe and the U.S., offsetting declines in resource-rich developing economies more exposed to oil prices. "I'm afraid we're going to get a little bit of bad news on the forward look tomorrow," said Jack De Gan, chief investment officer at Harbor Advisory in New Hampshire, which owns GE stock on behalf of clients. The company could maintain its sales projections, given the business it has already lined up supporting existing oil and gas projects, he said, but in future orders projections for 2015 and 2016, "I have to believe we're going to hear some moderation." GE believes that it will be shielded in part because many of its revenues in the oil business are from services, and that wells that are already in production will stay active despite the price drop. The company has relatively less exposure, compared with peers, to onshore alternative-oil operations, like oil sands and shale, where new exploration could be expected to slow. The company also thinks it will be able to help customers pump oil and gas more efficiently, which could be at a premium as prices fall. The drop in price also could give GE an opportunity to pick up more assets at a better price if it wants to expand the business. Credit: By Ted Mann
Subject: Petroleum industry; Investments; Impact analysis; Energy industry; Crude oil prices
People: Simonelli, Lorenzo Immelt, Jeffrey R
Company / organization: Name: GE Oil & Gas; NAICS: 333249
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Dec 16, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636383448
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636383448?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permis sion of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Repsol to Buy Talisman Energy for $8.3 Billion; Repsol to Assume $4.7 Billion in Debt; Deal to Almost Double Company's Oil Output
Author: Bjork, Christopher; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Michael Hulme, who manages a commodities fund for French asset management giant Carmignac Gestion, said that tumbling oil prices are a buying opportunity for Repsol, but "it adds lots of debt, poor cash generation, and a ragbag of assets," adding that Talisman's Asian holdings are "not a good fit" for Repsol.
Full text: MADRID--Repsol SA's $8.3 billion deal Tuesday to take over Talisman Energy Inc. brings new production capacity and risk for a company that less than three years ago saw a large portion of itself wrested away by a populist Argentine government. The move by Repsol is a high-stakes bet on a recovery of crude-oil prices and a crucial piece of the Spanish company's strategy to convert a string of recent successes in oil exploration into gushing wells. Folding in Talisman, a Canadian owner of shale acreage and offshore oil rigs, will nearly double Repsol's daily oil output and establish the Spanish company among the top 15 producers in the world. Just as important for Repsol: It will lower the company's reliance on volatile Latin American economies by increasing its exposure to North America. The two companies said on Tuesday that their boards would recommend a bid valuing Talisman's equity at $8.3 billion. Under the bid's terms, Repsol will assume $4.7 billion in debt. Repsol agreed to pay US$8, or 9.33 Canadian dollars, for each Talisman share, a 60% premium to the average price over the past month. A nearly 50% drop in crude oil prices since the summer drained the debt-laden Calgary-based company of cash and was starting to hurt its ability to fund continuing projects. That, in turn, pushed down the value of Talisman's shares by more than half. "It was the right moment" to make a deal, Repsol Chairman Antonio Brufau told a news conference Tuesday. "From the beginning, Talisman was in our sights." Talisman Chief Executive Hal Kvisle said the company had failed to sell off enough assets in a piecemeal fashion to service its debts, and that the company faced a cash crunch exacerbated by the plunge in oil prices. The two companies began their discussions in May, but those by late summer, Talisman Chief Financial Officer Paul Smith said. Negotiations resumed a couple of weeks ago, he said, prompted by a steep drop in oil prices this fall, which pulled down the market capitalization of Talisman and many other energy companies. But continued crude price instability made it hard to settle on terms, and threatened to push the talks into next year. "The deal could have slipped away from us," Mr. Smith said. With Talisman, Repsol's output would rise by 76%, to 680,000 barrels of oil equivalent a day, and its proven reserves by 55% to more than 2.3 billion barrels of oil equivalent. It will add shale acreage in Texas, New York and Alberta, Canada, oil rigs in the North Sea where Repsol is already present, and off the coasts of Indonesia and Malaysia, where it has no presence. Repsol executives said they made the deal expecting prices to trend back toward $100 a barrel of Brent within three years but said the company could manage if prices stay below $80. Bankers involved in the deal said Repsol wanted to act before Talisman's Mr. Kvisle stepped down, something he had pledged to do as soon as this month after taking over as a caretaker CEO in 2012. "There was a window," one banker said. "A new CEO would be a lot less likely to be supportive of a transaction," he said. Repsol's shares slipped Tuesday as investors took stock of the purchase. Aside from uncertainty over oil prices, some analysts saw a risk in the geographical spread and uneven quality of Repsol's new assets. "Buying assets at trough valuation is attractive, even if the price agreed is toward the top of our expected range," said Oswald Clint, a senior oil analyst at Bernstein. But he said he had concerns about the value of some Talisman assets, particularly its loss-making rigs in the North Sea. Michael Hulme, who manages a commodities fund for French asset management giant Carmignac Gestion, said that tumbling oil prices are a buying opportunity for Repsol, but "it adds lots of debt, poor cash generation, and a ragbag of assets," adding that Talisman's Asian holdings are "not a good fit" for Repsol. The purchase, which requires approval by shareholders and Canadian regulators, is the largest corporate transaction by any Spanish company in the past five years, Repsol said. The Spanish company will fund part of the takeover with $8 billion it holds in cash on its balance sheet. The bulk of the cash came as for its nationalization of Repsol unit YPF SA. In addition, Repsol said it may issue up to $5 billion in hybrid bonds to avoid a downgrade of its credit ratings. The 2012 YPF nationalization made Repsol executives wary of betting the company's future on unstable economies, and last year it began looking for ways of increasing its exposure to the U.S., Canada and other developed countries. Repsol looked at more than 100 assets world-wide before settling on a deal with Talisman, said Repsol CEO Josu Jon Imaz. Taking on Talisman's roughly 2,800 employees almost doubles Repsol's exploration and production staff. While Repsol has a market value five times that of Talisman, it lacked scale in oil production, having historically invested more in its oil refining operations. Mr. Imaz, a chemical engineer and former politician who once ran Repsol's refining operation, said he wants to take advantage of the Canadian company's expertise in offshore oil production to run platforms in deep waters off Brazil and in the Gulf of Mexico, where Repsol has made several oil finds in recent years. Since taking the job in May, Mr. Imaz has spent much of his time reading up on the oil extraction business, a person familiar with the effort said. Write to Christopher Bjork at and Chester Dawson at Credit: By Christopher Bjork and Chester Dawson
Subject: Crude oil prices; Petroleum industry; Crude oil; Asset acquisitions; Production capacity; Executives
Location: United States--US
People: Kvisle, Hal Brufau, Antonio
Company / organization: Name: Talisman Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636384152
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636384152?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner . Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shockwaves From Oil Plunge Hit Stocks, Currencies; No Respite for Ruble Despite Rate Rise
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
"Investors are scaling back risk exposure as year-end approaches, and beginning to realize that the economic scenario priced into historically low bond yields and collapsing commodity prices is hardly consistent with the growth required for an improvement in corporate profits," said Ian Williams, economist and strategist at brokerage Peel Hunt. of its manufacturing sector added to the gloom, as investors awaited manufacturing data in the eurozone.
Full text: Shockwaves from collapsing oil prices continued to reverberate through markets on Tuesday, sparking bouts of volatility across a slew of assets classes and sending investors scrambling to position as 2014 fades. Although stocks and currencies closely linked to commodity prices remained under fierce pressure all day--crushed by the price of Brent crude slumping to a yet another five-and-a-half year low of just $58.50 per barrel--the sell-off proved temporary elsewhere, keeping investors on edge. Having earlier in the session tumbled to new two-month lows, extending Monday's sharp falls, the Stoxx Europe 600 ended the session up 1.7%. Since the start of the month, the index has depreciated more than 5% and some traders said that some investors were now seeing an attractive entry point. François Savary, who oversees about $10 billion of assets as chief investment officer at Swiss bank Reyl, however, attributed the recovery to the prospect of cheaper oil eventually providing a boost to growth and stock prices by putting more money in consumers' pockets. Even London's FTSE 100, vastly exposed to the oil and gas sector through names like BP PLC and Royal Dutch Shell PLC, closed Tuesday up 2.4%--its largest one-day point and percentage gain since July 2013--having earlier in the session hovered around its 2014 low. "This underlines the fact markets still don't know whether to charge or retreat, and suggests we can expect further volatility to come," said Laith Khalaf, a senior analyst at broker Hargreaves Lansdown. In Russia on Tuesday, . The ruble plummeted to a fresh all-time low of above 80 against the U.S. dollar, dealing a hefty blow to the country's central bank which late Monday by 6.5 percentage points to 17% in a dramatic attempt to stem seemingly relentless outflows. In late European trade, the ruble recovered somewhat to around 67.75 against the greenback, but it nonetheless remains around 50% lower on the year, additionally battered by Western sanctions. "Russia is in the midst of a perfect storm," said Heinz Rüttimann, emerging market strategist at Swiss private bank Julius Baer. "Western sanctions hurt, the oil price is down, interest rates high and the economy falling back into recession. It cannot get much worse for Russia," he added. Jason Pidcock, a fund manager at Newton, which manages around £50.9 billion ($80.1 billion) in assets, said that--barring a very rapid rebound in the oil price--he doesn't think that there is anything that will "stop Russia going into a very sharp and deep recession". The CBOE Volatility Index, commonly considered a fear gauge of global markets, rose more than 8% on the day, briefly peaking above 23 before receding to just above 20. Less than two weeks ago it was at trading below 12. "We are not prone to adding risk at this time of year, especially on illiquid markets [such as Russia]," said Didier Lambert, an executive director at J.P. Morgan Asset Management which looks after around $1.7 trillion in assets. In light of the major swings in the ruble rate on Tuesday, he says it's simply not tradeable. "It's a market you want to stay out of." The Turkish lira fell 1.5%, also to an all-time low against the dollar, before retracing, while the Polish zloty and Hungarian forint weakened too. The Norwegian krone, another currency closely correlated with the price of oil, fell more than 5% against the dollar before reversing those moves. Earlier in the session it also hit parity with its Swedish counterpart. Further afield, stocks in the Persian Gulf suffered, while the German government bonds clocked yet another all-time high, fueled by surging demand for safe-haven assets. The yield on Germany's 10-year bond sank to 0.57%. Bond yields fall as prices rise. "Investors are scaling back risk exposure as year-end approaches, and beginning to realize that the economic scenario priced into historically low bond yields and collapsing commodity prices is hardly consistent with the growth required for an improvement in corporate profits," said Ian Williams, economist and strategist at brokerage Peel Hunt. A contraction of added to the gloom, while business activity in the eurozone picked up only modestly in December, data showed. Like European equity markets, however, stocks in the U.S. brushed off any negative implications of weaker oil in late European trade Tuesday--the S&P rose almost 1%. Mr. Savary at Reyl also attributed that move to the potential upside of cheaper commodities, but like many of his counterparts he said that he was nonetheless holding back from adding to his stock investments against the backdrop of financial turmoil in Russia. "The oil price is reinforcing the possibility of a default by Russia," he said. "That would have an impact on financial institutions and economic activity in Europe, and it is making people nervous." Christopher Whittall contributed to this article. Write to Tommy Stubbington at and Josie Cox at Credit: By Tommy Stubbington and Josie Cox
Subject: Central banks; Manufacturing; Investments; Eurozone
Location: Germany United Kingdom--UK
Company / organization: Name: Bank of England; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636404401
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636404401?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Prices Snap Losing Streak; Global Benchmark Brent Crude Remains Down
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Analysts expect the U.S. Energy Information Administration to report that oil supplies fell by 1.9 million barrels last week, while gasoline stocks rose by 2 million barrels and distillate inventories rose by 1 million barrels.
Full text: U.S. oil prices broke a four-session losing streak Tuesday after posting big swings earlier in the session, as traders wagered on shrinking supplies and jockeyed to detect a bottom in a market that has plunged nearly 50% since June. The benchmark U.S. oil price settled 2 cents higher at $55.93 a barrel on the New York Mercantile Exchange. Prices traded as low as $53.90 a barrel and as high as $57.15 a barrel in the session. Brent crude, a global price gauge, settled down 2% at $59.86 a barrel, its lowest settlement since May 19, 2009. Few traders believe the recent strength in the oil market suggests a sustained rebound. Oil prices have sunk in recent months on concerns that ample global supplies are outweighing tepid demand growth. "It's not surprising for there to be people trying to bottom-fish" after oil prices hit a succession of five-year lows, said Anthony Lerner, senior vice president of industrial commodities at brokerage R.J. O'Brien & Associates LLC. Some market watchers expected that weekly U.S. data on the nation's petroleum markets, due out on Wednesday, will show a decline in crude-oil supplies last week. Analysts expect the U.S. Energy Information Administration to report that oil supplies fell by 1.9 million barrels last week, while gasoline stocks rose by 2 million barrels and distillate inventories rose by 1 million barrels. They also expect that refineries ran at 95.3% of capacity, an unusually high rate, to take advantage of cheap domestic crude supplies. "The refiners are still cranking it out," said John Kilduff, founding partner of Again Capital, a fund that invests in energy commodities. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 1.9-million-barrel build in crude supplies, a 2.8-million-barrel increase in gasoline stocks and a 1-million-barrel draw in distillate inventories, industry sources said. U.S. oil prices fell about 60 cents on the news. Contract expirations could also be causing volatility in the market, as traders close out positions. The front-month Brent contract for January delivery expired at settlement Tuesday. Nymex options for January crude oil also expired Tuesday, with a large number of positions around the level where the market settled. Traders who had used options to bet on lower prices may have had to buy futures contracts ahead of expiration, said Oliver Sloup, director of managed futures at brokerage iiTrader in Chicago. "A lot of traders have definitely been on the short side," meaning they have bet on lower prices, Mr. Sloup said. "We're seeing some of those shorts starting to cover those positions." Prices at the pump have dropped as well. Retail gasoline on average cost $2.53 a gallon in the U.S. on Tuesday, according to AAA, down from $3.23 a gallon a year ago. Gasoline prices haven't fallen to the same degree in other countries due to currency conversions, taxes and fuel subsidies in some places. The drop in oil prices earlier Tuesday rattled financial markets and currencies around the globe. In a dramatic overnight move, the Russian central bank raised its key interest rate to 17% from 10.5% after the ruble's sharpest daily drop against the dollar in more than a decade. In Tuesday's early trading, oil prices tumbled on weak economic data out of Europe and China, with Brent crude falling below $60 a barrel for the first time since May 2009. Concerns about what slowing economic growth means for oil demand are compounded by a steady flow of supplies. The Organization of the Petroleum Exporting Countries won't call for an emergency meeting unless something drastic happens in the oil market, the United Arab Emirates' oil minister said Monday. On Tuesday, Russian Energy Minister Alexander Novak said that his country would maintain its current level of oil production next year. "Not only are we having an increase in supply, but we're having a decrease in demand" from previous estimates, Mr. Sloup said. "You look at Economics 101, and that's a terrible scenario." January reformulated gasoline blendstock, or RBOB, fell 3.54 cents, or 2.2%, to $1.5410 a gallon, the lowest settlement since May 1, 2009. January diesel slid 4.17 cents, or 2.1%, to $1.96 a gallon, the lowest level since Aug. 24, 2010. Georgi Kantchev, Eric Yep, Asa Fitch and Summer Said contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; American dollar; Inventory; Gasoline prices
Location: United States--US
People: Novak, Alexander
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636404979
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Last updated: 2017-11-21
Database: The Wall Street Journal
Energy Market: Oil Prices Plummet After Short-Lived Bounce
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Dec 2014: C.7.
Abstract:
Falling oil prices have hurt the currencies of oil-producing nations, including Russia and Nigeria, and weighed on energy stocks and junk-bond prices.
Full text: Oil prices tumbled for a fourth session in a row, extending this year's steep losses fueled by a persistent surplus of crude supplies. The spate of declines has sent the benchmark price for U.S. oil 48% lower in the past six months, underscoring how investors and traders see few signs of pullback in production big enough to stabilize the market. "The sellers are still in charge, and it seems like the market really hasn't bottomed," said Gene McGillian, senior analyst at Tradition Energy. Oil for January delivery fell $1.90, or 3.3%, to close at $55.91 a barrel, the lowest level since May 2009 on the New York Mercantile Exchange. Brent crude, the global benchmark, slid 1.3% to $61.06 a barrel, the lowest level since July 2009, on ICE Futures Europe. Prices had risen earlier in Monday's session after armed clashes in Libya over the weekend disrupted oil exports. A quadrupling of Libya's oil output in a matter of months earlier this year is a major factor behind the global supply glut that has weighed on prices. But some previous disruptions to Libyan shipments were quickly resolved. Any interruption would have to be sustained to set even a temporary floor under prices, analysts said. "The market gave, basically, an over-the-shoulder glance [to the Libya news] and left it in the rearview mirror," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "Oil has a lot of moving pieces moving against it right now." In addition to Libya's supplies, the U.S. is pumping oil at the fastest rate in almost 30 years. These barrels are hitting the market in an environment of sluggish demand growth. On Friday, the International Energy Agency reduced its forecast for demand growth in 2015 for the fifth time in six months. And the Organization of the Petroleum Exporting Countries is signaling that it's holding fast to its November decision to maintain its production target. Nymex crude plummeted 10% on the day after the last OPEC meeting, which fell on the U.S. Thanksgiving holiday. The United Arab Emirates' oil minister said Monday that OPEC won't call an emergency meeting unless something "drastic" happens, without elaborating. The cartel's next scheduled meeting is in June. The head of OPEC, Abdalla Salem el-Badri, said Sunday that the group hasn't set a target for the oil price, and analysts said he appeared to imply the organization would tolerate much lower prices. The price basket of 12 OPEC crudes fell below $60 a barrel Friday for the first time since July 2009. The majority of OPEC members need prices at $100 a barrel or above to balance their government budgets. Falling oil prices have hurt the currencies of oil-producing nations, including Russia and Nigeria, and weighed on energy stocks and junk-bond prices. The dollar has strengthened amid the selloff in other currencies. Oil-consuming industries such as airlines have also gained, along with retail companies, which are benefiting from increased consumer spending. Relatively cheap oil is expected to boost global economic growth next year, as consumers will save money on petroleum products and be able to spend more elsewhere. Market watchers this week will be looking at data on the health of the major global economies to gauge whether sluggish demand will continue into 2015. The U.S., China and Europe are scheduled to release manufacturing data on Tuesday. The U.S. Federal Reserve will meet this week, with a monetary-policy statement due on Wednesday after the meeting. "The market will be looking for news to see whether we have found a bottom," said Tamas Varga, analyst at PVM. "We are probably not just there yet, but we are close." While many traders dismiss the potential impact of the latest Libya outage, a prolonged interruption could lead to tighter supplies of high-quality oil coveted by refiners. Also Monday, January reformulated gasoline blendstock, or RBOB, fell 2.09 cents, or 1.3%, to $1.5764 a gallon. January diesel slipped 1.43 cents, or 0.7%, to $2.0017 a gallon. --- Benoit Faucon, Summer Said, Asa Fitch and Nicolas Parasie contributed to this article. Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum industry; Petroleum production; Crude oil prices
Location: United States--US Libya
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Classification: 8510: Petroleum industry; 3400: Investment analysis & personal finance; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.7
Publication year: 2014
Publication date: Dec 16, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636405048
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright ow ner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Africa Targets 'Secret' Oil Deals --- Tax Disputes Flare and Slow Key Resources Projects as Governments Seek Bigger Piece of the Pie
Author: Stevis, Matina; Bariyo, Nicholas
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Dec 2014: B.7.
Abstract:
Mr. Kabwe's fight to make all contracts public kicked off in August, when part of the contract with Norway's Statoil ASA and ExxonMobil Corp. was leaked to the local press, showing that the state-run Tanzania Petroleum Development Corporation, or TPDC, had agreed to terms yielding 30%-50% of the revenue for state coffers -- well below the 50%-80% yields recommended by the World Bank and the International Monetary Fund.
Full text: Sitting before a parliamentary oversight committee last month, two top executives from Tanzania Petroleum Development Corp. declined to reveal details of billions of dollars in gas contracts that the state company had signed with foreign investors. Parliamentarians had a sharp riposte: They called the police. The two company board members had argued they needed permission from their investors before they disclosed details of the deal. But soon after a police officer showed up, the executives were fumbling with their paperwork, according to lawmakers who attended the hearing -- but in the end, they didn't release any documents. The executives were escorted out of the parliamentary building and into a police truck. They were briefly taken into custody, detained for a few hours and released without charges. "Companies must accept the era of secrecy is over," says Zitto Kabwe, the head of the Tanzanian parliament's public-accounts committee, who witnessed the scene. TPDC declined to comment on the police detention of its executives, and Tanzania's ministry of energy and minerals didn't respond to requests for comment. Battles over contract transparency are brewing across Africa, touching on sensitive tax issues among energy and mineral giants trying to tap into a new frontier of the global economy. The clashes show how once-malleable African governments are fighting for a bigger share of earnings in sometimes-secretive deals, often following the advice of Western groups such as the Soros Foundation and the African Governance Initiative. The upshot: A raft of legal disputes have stalled production of some key projects and frayed relationships between African governments and foreign investors. Uganda remains embroiled in a litany of tax disputes with Tullow Oil PLC and Heritage Oil Corp., nearly a decade after oil reserves were discovered. The country had amended its income-tax law to introduce a capital-gains tax on the sale of oil rights shortly after the discoveries, prompting Heritage and Tullow to contest the new tax assessments. Zambia's mining industry is faltering after the government in October decided to more than triple mine royalties to 20%, following the advice of Western groups. This compelled miners such as First Quantum Minerals Ltd. and Glencore PLC to suspend $2 billion in expansion projects. And in Guinea, disputes stemming from government changes to a lease for the Simandou iron-ore mine are dogging the project. Some experts argue the disputes reveal a blurring between demands for more disclosure from investors and more tax revenue from governments. "It's about negotiating to get a better deal in terms of money . . . income, but not necessarily transparency," says Carlos Lopes, the chief of the United Nations Economic Commission for Africa. African governments have found ready partners for both endeavors. Western organizations such as the Soros Foundation, founded by hedge-fund billionaire George Soros, and international institutions like the United Nations and the World Bank are providing advisory services to resource-rich nations on how to adjust ownership structures and rejigger tax laws for a bigger slice of revenues. Some analysts say this is a necessary tilting of the scales toward African governments. "The deals often favor the companies which have access to vast experience and capital, while the governments do not have the experience, institutions or laws in place to manage their natural resources," says George Boden, an analyst with U.K.-based anticorruption group Global Witness. The African Governance Initiative -- headed by Mr. Blair -- has helped Rwanda become the region's first country to issue mining certificates at the point of export, in an effort to keep conflict minerals out of the supply chain. In Guinea, Mr. Soros, through his foundations, played a key role in advising the government on its review of mining deals struck by previous governments. This led to the ouster of BSG Resources, the mining arm of Israeli tycoon Beny Steinmetz's family-owned conglomerate, from the country earlier this year and the ushering in of Rio Tinto PLC. BSG Resources has denied wrongdoing and accused President Alpha Conde's government of seeking to expropriate its rights by stealth -- a claim the government rejects. In Tanzania, the recent police detention of the oil-company executives capped months of a simmering row at the local parliament over whether the East African nation is getting a fair deal for its newfound vast natural-gas resources. Mr. Kabwe's fight to make all contracts public kicked off in August, when part of the contract with Norway's Statoil ASA and ExxonMobil Corp. was leaked to the local press, showing that the state-run Tanzania Petroleum Development Corporation, or TPDC, had agreed to terms yielding 30%-50% of the revenue for state coffers -- well below the 50%-80% yields recommended by the World Bank and the International Monetary Fund. Mr. Kabwe ordered TPDC to bring all contracts to parliament for scrutiny, but the state-run company cited investor reluctance to publicize the terms. It didn't comply with a Nov. 3 deadline -- at which point the two senior TPDC board members were briefly taken into custody. An official with TPDC said that confidentiality clauses in the deals prevent the state company from revealing them to third parties. ExxonMobil, the minority partner in the venture, referred questions to Statoil. Knut Rostad, a spokesman for Statoil, said the deal was "balanced and comparable to commercial terms in other places with similar risks." He added that his company was making a long-term commitment to the country and has already spent over $1.5 billion on exploration. Credit: Matina Stevis, Nicholas Bariyo
Subject: Mining industry; Mineral royalties; Tax assessments; Government contracts; Foreign investment; Mineral rights
Location: Africa
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120; Name: Soros Foundation; NAICS: 813211
Classification: 9177: Africa; 8500: Extractive industries; 1300: International trade & foreign investment
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.7
Publication year: 2014
Publication date: Dec 16, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636408656
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636408656?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Persian Gulf Stock Markets Tumble Again as Oil Plunge Stokes Economic Fears; Dubai Stocks Lead Regionwide Rout, Extending Recent Losses
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
"The stocks decline is justified due to the magnitude of the fall of oil prices which have lost almost 45% since June after a long period of low oil price volatility," said Sebastien Henin, head of asset management at Abu Dhabi-based The National Investor. [...]following the Arab Spring, the break-even point for many public budgets across the region has increased a lot and some countries are now under pressure," he added.
Full text: DUBAI--Stock markets in the Persian Gulf tumbled again on Tuesday as a sustained drop in oil prices heightened concerns about the region's petrodollar-fueled economies. Most Gulf states spend the hundreds of billions of dollars they earn from oil sales to boost their economies. But as supply outstrips demand growth, sparking concerns that crude may remain weak for a while and curb the Gulf's ability to run expansionary budgets. "The stocks decline is justified due to the magnitude of the fall of oil prices which have lost almost 45% since June after a long period of low oil price volatility," said Sebastien Henin, head of asset management at Abu Dhabi-based The National Investor. "Moreover, and following the Arab Spring, the break-even point for many public budgets across the region has increased a lot and some countries are now under pressure," he added. Dubai stocks, among the top performers globally just a few months back, led the regionwide rout on Tuesday, extending recent losses that have erased all of 2014's gains. The main stock index finished 7.3% lower at 3,083.69, and has now lost about 34% since mid-November. "The selloff has been driven by a combination of strong de-risking by Western institutions and heavy margin calls on local [high net worth] investors," with the latter the key drivers of the rally over the past two years," said Fahd Iqbal, head of Middle East research at Credit Suisse. He noted that Dubai has fallen by the most, despite having the economy least exposed to oil prices, as it is the market with the highest level of margin trading. And "recent IPOs, which have been extremely oversubscribed, have served to drain liquidity from the market in recent months, thus exacerbating the current selloff," Mr. Iqbal said. Emaar Malls Group--whose $1.6 billion was strongly oversubscribed and listed at a premium to its issue price of 2.9 dirhams ($0.79) each--on Tuesday closed at 2.46 dirhams. Not surprisingly, Emaar Properties, Dubai's biggest developer and majority owner of EMG, told The Wall Street Journal it remains committed to listing its other business units but the launch of a share-sale will depend on the market conditions. Emaar, a market heavyweight, closed limit down 10% at 6.12 dirhams. Other markets in the region also closed deep in the red. Abu Dhabi, Dubai's neighbor in the United Arab Emirates, was down 6.9% at 3892.08 and Doha's benchmark index shed 3.5% to 11,057.33. The U.A.E. and Qatar markets were among the top performers globally in the first half of the year, buoyed in part by their elevation to emerging status by MSCI Inc. in May. Saudi Arabia, the Middle East's biggest market, closed 7.3% lower at 7330.30. London-based Capital Economics, in a note to clients, said, in part, the sharp fall in Gulf stocks can be pinned on the financial market turmoil that has affected other emerging markets as well. The overriding factor, obviously, has been the continued slide in oil prices, it noted. "...if oil prices settle at $60-65pb over the coming years, as we expect, a sharp rebound in stock markets across the Gulf seems unlikely," said Jason Tuvey, a Middle East economist at Capital Economics. Write to Nikhil Lohade at Credit: By Nikhil Lohade
Subject: Stock exchanges; Securities markets; Prices
Location: Middle East
Company / organization: Name: Emaar Properties; NAICS: 237210; Name: National Investor; NAICS: 523110; Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636451810
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636451810?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks End Lower After Volatile Session; Moves in Oil Prices Roil Global Markets
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
U.S. technology stocks led the declines, along with shares of companies with high forecasts for earnings growth, which are considered to be riskier bets.
Full text: U.S. stocks ended a seesaw session with broad declines, after spending much of the day swinging alongside crude-oil prices. Tuesday's session was volatile, as U.S. benchmarks were and for much of the session. Stocks turned lower shortly before the close. Traders said that much of the action was driven by fund managers shifting their positions ahead of the end of the year, prompting declines in technology stocks and other highfliers. "People are selling the winners and...buying the stocks that underperformed this year," said Christian O'Brien, an equity trader in the New York office of financial-services firm Raymond James. The Dow Jones Industrial Average fell 111.97 points, or 0.7%, to 17068.87. The blue-chip index traded within a wide range during the day, gaining as much as 247 points before noon, then closed at its session lows. The S&P 500 dropped 16.89 points, or 0.8%, to 1972.74. U.S. technology stocks led the declines, along with shares of companies with high forecasts for earnings growth, which are considered to be riskier bets. The Nasdaq Composite Index fell 57.32 points, or 1.2%, to 4547.83. The tech-heavy index is up 8.9% this year, outpacing the Dow's 3% gain. Large-cap growth stocks in the Russell 1000 Growth Index fell 1.1%, more than stocks seen as bargains, as the Russell 1000 Value Index slipped 0.6%. Safe-haven assets gained. , pushing the yield on the benchmark 10-year note down to settle at 2.070%, its lowest level since May 2013. The yen, another asset considered safe in times of turmoil, rose against the dollar. U.S. crude-oil futures, which have lost about 50% since June, swung between gains and losses during the afternoon. They settled up 2 cents at $55.93 a barrel. There was also turbulent trading in emerging markets, amid rising concerns about Russia, which has struggled with the steep drop in oil. The Wall Street Journal reported Tuesday afternoon that from institutional clients. That followed a surprise rate increase from the country's central bank, which failed to halt a steep drop in its currency, and an announcement from the White House that President Barack Obama would sign a package of Russia sanctions. Elsewhere, Indonesia's currency tumbled and Thailand's stock market extended a steep Monday plunge. The emerging-market selloff came a day ahead of the conclusion of a policy-setting meeting of the Federal Reserve. Also weighing on sentiment are expectations that the Fed will take a step toward raising short-term interest rates in the U.S. next year. European stocks recovered from early losses, with the Stoxx Europe 600 closing up 1.7% after losing 1.3% earlier in the session. The index fell 5.8% last week. Broadly, investors say that U.S. economic growth is expected to hold up better than growth in Europe and Asia, which should help stocks. "To the extent that there continues to be stress [on oil], it could be difficult for U.S. markets to perform well. That said, the actual impact on the U.S. is going to be minimal," said David Lefkowitz, equity strategist with UBS Wealth Management. Tuesday's U.S. economic data was slightly below forecasts. Housing starts fell to an annualized rate of 1.028 million units last month, while economists had forecast 1.040 million, and housing permits fell to 1.035 million, while 1.075 million were expected. But that was offset by an upward revision to October's housing starts. Markit reported that U.S. factory activity declined in December, with its flash manufacturing purchasing managers index falling to 53.7 from November's 54.8. U.S. stocks remain less than 10% below their all-time highs. Many investors say they aren't worried about the recent decline in major U.S. stock indexes because they believed shares had become overvalued by some metrics. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Housing starts; Stock exchanges; American dollar; Investments; Purchasing managers index; Technology stocks
Location: United States--US New York
People: Obama, Barack
Company / organization: Name: UBS Wealth Management; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636465769
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636465769?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wit hout permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World Markets Roiled by Oil Slide, But U.S. Stocks Resilient; U.S. Treasurys Are Snagged by Investors, Sending Yield to Lowest Since October
Author: Vaishampayan, Saumya; Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Driving the latest leg of the selloff in the world's stock markets was another sharp drop in the price of crude oil earlier Tuesday, which rendered ineffective a surprise rate increase by Russia's central bank.
Full text: A prolonged slump in global oil prices sent shudders through world financial markets on Tuesday, as investors concerned about the fallout shed stocks and other risky assets and piled into the safety of government debt. But the , underscoring investors' faith in the U.S. economy. in U.S. trading as traders jockeyed to detect a bottom. The Dow Jones Industrial Average opened lower, but turned higher in choppy morning trading. The blue-chip index was recently up more than 200 points. went as low as 2.054%, according to Tradeweb. That's also the lowest since October, when the yield briefly plunged below 2%. When bond yields fall, prices rise. The yen, another asset considered safe in times of turmoil, was up sharply against the dollar. Driving the latest leg of the selloff in the world's stock markets was another sharp drop in the price of crude oil earlier Tuesday, which rendered ineffective a surprise rate increase by Russia's central bank. Russia jacked up interest rates to 17% early Tuesday in an attempt to . "The largest driver of the marketplace right now is the price per barrel of oil," said Art Hogan, chief market strategist at brokerage firm Wunderlich Securities. "Energy...is in a free fall," he said. "Not knowing what kind of...collateral damage that might cause" has prompted caution about investing in risky assets such as stocks, he said. Some investors are worried that the plunge in oil prices, which are now down about 50% since June, signals a softening global economy. Manufacturing indicators in Europe and China on Tuesday pointed to tepid growth. Brent crude, the global benchmark, traded as low as $58.50. It was recently 1.2% lower at $60.33 a barrel. But crude prices rebounded in trading on the New York Mercantile Exchange. The benchmark U.S. oil price recently was 1.8% higher at $56.90 a barrel after trading as low as $53.60 earlier in the session. The battered ruble plunged to a record low against the dollar again Tuesday, as investors grew convinced that the Bank of Russia's rate increase wouldn't be enough to alleviate the pressure on the currency from falling oil prices and Western sanctions. By early afternoon in Moscow, the ruble dropped sharply, reaching 80 to the dollar, a record low and a 35% decline from opening levels when it rallied briefly. The selloff, which rattled emerging markets as well as big European bourses, comes a day ahead of the conclusion of a policy-setting meeting of the Federal Reserve. Also weighing on sentiment are expectations that the Fed will take a step toward raising short-term interest rates in the U.S. next year. Higher rates in the U.S. could speed up outflows of capital from developing countries, which already have sent currencies lower against the dollar. Still, U.S. stocks remain near all-time highs. Many investors say they aren't worried about the recent decline in major U.S. stock indexes because they believed shares had become overvalued by some metrics. Andrey Ostroukh, Alexander Kolyandr and Chiara Albanese contributed to this article. Write to Saumya Vaishampayan at and Alexandra Scaggs at Credit: By Saumya Vaishampayan And Alexandra Scaggs
Subject: Petroleum industry; Interest rates; Stock exchanges; Energy economics; American dollar; Investments; Crude oil prices
Location: Russia United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636488264
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636488264?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dollar Lengthens Slump Against Yen and Euro; Volatile Oil Market Adds to Investors' Concerns About Global Growth
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract: None available.
Full text: The dollar slumped to a one-month low against the yen on Tuesday, as tumbling oil prices continued to fuel investors' concerns about global growth. The dollar fell 1.2% in late-afternoon trading to ¥116.35, its lowest in a month. The euro gained 0.6% to $1.2512, its strongest since Nov. 27. Global oil prices fell for the fifth session in a row, with Brent crude futures ending at $59.86 a barrel, their lowest in more than five years. Some investors are worried that oil's drop signals a softening global economy, prompting them to shed their bets on a stronger dollar and buy haven assets such as the Japanese yen and U.S. Treasurys. "The concern is that the decline in oil prices will be more persistent, and that this will start to hurt economies and change central banks' behavior," said Sireen Harajli, foreign exchange strategist at Mizuho Bank. "So investors have headed into assets that are considered safer, like the yen and the Swiss franc, which is why we see [the dollar-yen pair] back around ¥116." The Russian ruble dropped to a record low against the dollar Tuesday, despite the Bank of Russia raising interest rates by 6.5 percentage points. Analysts said investors were convinced the rate increase wouldn't be enough to alleviate the pressure on the currency from falling oil prices and Western sanctions. The dollar was up 4.3% at 68.442 rubles in late-afternoon trading. Investors will be watching the Federal Open Market Committee on Wednesday for signals about the central bank's timeline for raising interest rates. The Federal Reserve's policy-making committee concludes its two-day meeting with a statement scheduled for release at 2 p.m. EST. Investors have piled into the dollar against the yen and euro over the past several months in their belief that an improving U.S. economy would move the Federal Reserve to raise interest rates sooner than central banks in Japan and the eurozone. The Bank of Japan and the European Central Bank continue to employ easing measures to stave off deflation and shore up their economies that also weaken their respective currencies. Higher U.S. interest rates would increase returns on assets denominated in the dollar, making the currency more attractive to investors. But in the current environment, a more hawkish tone by the Fed may not be enough to lift the greenback from its current slump against the yen and the euro, said Vassili Serebriakov, currency strategist at BNP Paribas. "Even if the Fed removes the 'considerable time' language, it's not clear it would help the dollar, if U.S. yields remain subdued in line with global risk aversion," Mr. Serebriakov said. Write to James Ramage at Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636497223
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636497223?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada on Track for Budget Surplus in 2015, PM Says; Canada's Stephen Harper Says Drop in Oil Prices to Limit Fiscal Flexibility
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Canadian Prime Minister Stephen Harper said Tuesday there is "no doubt" his government is on track to record a budget surplus in 2015 amid the drop in crude oil prices, even though the swoon limits the government's ability to make spending or tax cut promises ahead of an election next year.
Full text: Canadian Prime Minister Stephen Harper said Tuesday there is "no doubt" his government is on track to record a budget surplus in 2015 amid the drop in crude oil prices, even though the swoon limits the government's ability to make spending or tax cut promises ahead of an election next year. Mr. Harper's comments came a day after Canadian Finance Minister Joe Oliver projected a surplus next year even though Canada's economy will feel the pain of lower prices for oil, which accounts for 18% of the country's exports. CIBC World Markets estimates the energy sector accounts for 10% of the country's gross domestic product. "We will definitely bring in a balanced budget in 2015. There is no doubt about that," Mr. Harper said in Quebec City. "There will be an impact on us, as it will reduce our fiscal flexibility in the short term," he said. , Mr. Oliver said Canada was committed to delivering promised tax relief aimed at Canadian families, and said the country's economy remained in solid shape. The ruling Conservatives will seek a fourth consecutive mandate in next year's vote, to be held no later than Oct. 19. To date, Mr. Harper's government has pledged billions in anticipated surpluses toward tax relief aimed at families, as well as infrastructure spending. Canada's federal government has yet to account for 2.5 billion Canadian dollars ($2.16 billion) in lost annual revenue this fiscal year ending March 31, because of lower crude prices, CIBC World Markets said in a report Tuesday. The benchmark U.S. oil price recently traded at $55.93 a barrel. The oil-price decline will weigh on Canada's terms of trade, or the difference between what producers get for their exports and the cost of imports. It could reduce the purchasing power of households and businesses, and slow growth in nominal gross domestic product, or the base of income from which governments extract tax revenue. A number of Canada-based energy companies have already unveiled plans to cut their dividends and pare back capital-spending plans amid the fall in crude prices. This now threatens a shift the Bank of Canada anticipates in the economy's growth profile--to an economy fueled mostly by exports and business investment from one powered largely by consumers. The energy sector accounts for over a third on nonresident business investment in Canada. Several private-sector economists in Canada say the steep, sudden fall in crude could weaken inflationary pressure and potentially delay a rate boost from the country's central bank to late 2015, or well behind when the Federal Reserve is expected to increase interest rates. Canada's oil-rich provinces are likely to feel a significant impact from the decline in crude prices, given that they derive royalty revenue from oil and gas extraction. Alberta, the heart of Canada's oil patch, already has warned of a C$7 billion hit to revenue. On Tuesday, the province of Newfoundland and Labrador said its projected budget deficit for the current fiscal year would nearly double, to C$916 million. Oil and gas extraction accounts for nearly a third of Newfoundland's GDP. Mr. Harper said Canada, unlike other big economies, isn't as dependent on energy to drive growth. He cited Russia, whose currency, the ruble, is in free fall, prompting the central bank in Moscow to . "We are all noticing the difficulties that are emerging in Russia," he said, attributing the woes to falling oil prices and a series of sanctions launched by Canada and its western allies after Moscow's intervention in Crimea. "As these factors bite, we encourage Vladimir Putin to respect the sovereignty of his neighbors and act in a way that's less aggressive." Write to Paul Vieira at Credit: By Paul Vieira
Subject: Crude oil prices; Petroleum industry; Relief provisions; Investments; Terms of trade; Budget deficits; Economic growth; Gross Domestic Product--GDP; Energy industry
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636509747
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636509747?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Overheard: Too Soon for Oil M&A
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
First-mover advantage certainly doesn't seem to apply to oil deals.
Full text: First-mover advantage certainly doesn't seem to apply to oil deals. Amid oil's slump, speculation is rife about bigger oil majors taking the opportunity to scoop up smaller rivals. But the market's reaction to two deals this week suggests caution is in order. First, Australia's Woodside Petroleum said it would pay Apache $2.75 billion for gas assets. Then, Repsol of Spain said it would buy Canada's Talisman Energy for $13 billion, including debt. The result: Shares in both Woodside and Repsol fell on Tuesday. Falling oil prices help bidders: Repsol is paying less than the price being talked about this summer for Talisman. But with oil still falling amid wider market turmoil, there is still a risk of overpaying. Woodside's purchase of high-cost gas assets looks risky, while Repsol is taking on debt to buy assets which, at current futures prices, earn an annual return of just 8.2%, says Tudor, Pickering, Holt. Unless oil stages a sustainable rally next year--a questionable proposition--both deals will look premature.
Subject: Petroleum industry; Foreign investment
Location: Australia Spain Canada
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636528657
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636528657?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Drop to Weigh On GE's 2015 Earnings; GE Cutting Costs At Oil And Gas Unit But Rest of GE Is Fine, CEO Jeff Immelt Says
Author: Mann, Ted
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Mr. Immelt often invoked his $17 billion agreement to buy the energy assets of Alstom SA, which he said will provide decades worth of future earnings from maintaining an installed base of power-generating equipment.
Full text: General Electric Co. warned on Tuesday its profit next year could be hurt by the plunge in oil prices, a new hurdle for CEO Jeff Immelt in his efforts to wring more growth out of the conglomerate's industrial operations. Mr. Immelt forecast that next year the company would be able to achieve a long promised goal of reducing the share of GE's earnings from its finance operation to about a third from nearly half, helped by the planned spinoff of its consumer finance operation in 2015. That is welcome news for investors who believe the industrial operations are less risky and more valuable, but it puts pressure on the CEO to deliver strong results from that side of the company. Briefing analysts and investors in the NBC soundstage that hosts Saturday Night Live, Mr. Immelt returned repeatedly to his theme that GE is in the midst of a historic "pivot" back to its industrial roots and away from financial operations. The plunge in oil prices deprives Mr. Immelt of one of his main industrial growth drivers--the company's $17 billion oil and gas operation. Now GE will have to rely on sales of locomotives, gas turbines, jet engines and medical imaging devices to generate gains. Mr. Immelt often invoked his $17 billion agreement to buy the energy assets of Alstom SA, which he said will provide decades worth of future earnings from maintaining an installed base of power-generating equipment. "Alstom is really the priority here, guys," Mr. Immelt said, adding that the company will focus in 2015 and 2016 on completing that purchase and integrating the two vast power companies. In a sign that GE has returned to a more predictable trajectory, GE issued annual earnings per share guidance for next year, the first time it has made such forecasts since the financial crisis. The company said it expects industrial per share earnings next year of between $1.10 and $1.20 while earnings from its GE Capital finance unit will be about 60 cents a share, for a total of between $1.70 a share and $1.80 a share. Analysts forecast 2015 GE earnings up 7% to $1.79 a share. To adjust to the changing landscape in the energy industry, Mr. Immelt said the company is cutting costs at its oil and gas unit and expects flat to negative operating earnings from the business next year. Revenue from its drilling and surface division is forecast to fall 10% in 2015. The company remains confident that its order backlog in areas including equipment for subsea oil production would translate into future sales. "People don't stop projects that are like this," Mr. Immelt said. Write to Ted Mann at Credit: By Ted Mann
Subject: Earnings per share; Petroleum industry; Stock prices; Petroleum production
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636533770
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636533770?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Oil Prices Plunge, PBF Energy Remains Focused on Growth; Executive Chairman Sees 'Net Positive' for Refiners
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Dec 2014: n/a.
Abstract:
Mr. O'Malley later turned around Premcor Inc. and sold it to Valero Energy Corp. for $6.9 billion in cash and stock. Since launching PBF in 2008 with backing from private-equity firms Blackstone Group LP and First Reserve Corp., he has revived refineries in Delaware, New Jersey and Ohio thanks to new flows of oil from places like North Dakota. Mr. O'Malley said current declining crude prices will spur demand for the gasoline and diesel his plants produce, though they could also cast a chill over U.S. oil production.
Full text: A lot of energy industry executives are reeling as oil prices plunge, but Tom O'Malley isn't panicking. The former oil trader has seen it all before. Now executive chairman of PBF Energy Inc., Mr. O'Malley has spent nearly three decades buying castoff refineries, resurrecting them and then selling the plants for a profit. In the 1990s he transformed ailing Tosco Corp. into the nation's largest independent refiner before selling it to Phillips Petroleum for $7 billion in stock. Mr. O'Malley later turned around Premcor Inc. and sold it to Valero Energy Corp. for $6.9 billion in cash and stock. Since launching PBF in 2008 with backing from private-equity firms Blackstone Group LP and First Reserve Corp., he has revived refineries in Delaware, New Jersey and Ohio thanks to new flows of oil from places like North Dakota. PBF went public in 2012. Mr. O'Malley said current declining crude prices will spur demand for the gasoline and diesel his plants produce, though they could also cast a chill over U.S. oil production. The 73-year-old Mr. O'Malley's investments have included stadium boxes in Denver's Mile High Stadium and Giants Stadium in New Jersey--which he sold in the 1990s--and golf courses in Florida. He recently talked with The Wall Street Journal about volatile energy markets and where he's looking next. Edited excerpts: WSJ: What's your outlook for oil prices? Mr. O'Malley: It would be my expectation that they stay well under $100, somewhere between $60 and $80, for at least the year 2015. After that, I find it amusing that people try and predict based on projections of supply and demand in a commodity that's so geopolitically affected. What happens in Iran? In Iraq? In Saudi Arabia? What happens in Venezuela? If you think about this and you look back on history--and I do look back on history--there's always an unexpected event. WSJ: I imagine you don't mind buying cheaper oil but what kind of ripple effect does that have on fuel prices? Mr. O'Malley: Lower prices usually lead to greater consumption. Think of it as just an absolutely extraordinary addition to disposable income. For refiners across the country and probably across the world, it's a net positive. WSJ: What do you forecast for gasoline prices? Mr. O'Malley: Every dollar [the oil price falls] equals 2.2 cents a gallon. If you drop by $40, which we have, you drop by 88 cents a gallon. You could break $2 a gallon in certain markets. WSJ: Oil producers want to lift the and you've been critical of that. How do you think falling oil prices will affect the debate? Mr. O'Malley: When I've come out against it, of course I'm speaking in my own self-interest. But tell me, is it your learned evaluation that the situation in the Middle East is really more settled now than it was in 1975? I think not. I understand the position of the producers, but it's idiotic for them to say that it won't result in a rise in the price. Why do you want to export? You want to export so you can get a higher price. What happens to the domestic price if you ? It goes up. WSJ: How long will you be actively involved at PBF? Mr. O'Malley: I'm their biggest individual shareholder. I don't have a time limit. I'm in very good health. I kayak, bike, hike in the mountains, do some sailing, swim, play golf. I probably kayak 100 days a year at least. Who really runs PBF? I'm the coach. You can call me the acquisition expert. WSJ: You've built your businesses by buying refineries when other companies didn't see their value. Do you see yourself making another big bet? Mr. O'Malley: I certainly think that any company that doesn't pay attention to the concept of growth will have a hard time surviving. At PBF we're interested in growth, but it can't be growth at any price. WSJ: Is there anything you've bought that you regret? Mr. O'Malley: No more golf courses! I not only buy, I sell. Keep that in mind. It's not my job to say no. It's my job to negotiate the best price. If you're our size, either grow or be a part of somebody else's growth story. We need to be bigger. WSJ: So get bought or buy someone else? Mr. O'Malley: Yeah, or you buy pieces. You're going to see all the majors selling. I think they've decided to go out of the refining business in North America, probably with the exception of Exxon. WSJ: You have a knack for buying at the right time. How do you decide what to buy and when? Mr. O'Malley: Whenever we look at an asset, we don't look at it with rose-colored glasses. We try to be realistic about things. It's listening to the people who you work with and not trying to make some crazy decision based on being some high-level executive. I'm someone who can walk around and sit down at anybody's desk and chat and not have it filtered by three layers of management. WSJ: Ever heard good insights from an unexpected source? Mr. O'Malley: For me, it's putting a puzzle together...I mean, having been a taxi driver, I think taxi drivers are very smart. I worked for Playbill Magazine. I worked on a tour bus company. I delivered liquor. I did everything you could ever imagine in New York. So I talk to everybody. Write to Alison Sider at Corrections & Amplifications PBF Energy Inc. has revived refineries in Delaware, New Jersey and Ohio. An earlier version incorrectly described the location of one of the plants as in Pennsylvania. Credit: By Alison Sider
Subject: Gasoline prices; Petroleum refineries; Petroleum industry; Supply & demand; Petroleum production
Location: New Jersey
Company / organization: Name: First Reserve Corp; NAICS: 523920; Name: Tosco Corp; NAICS: 324110, 213112; Name: PBF Energy; NAICS: 324110; Name: Blackstone Group LP; NAICS: 523110; Name: Valero Energy Corp; NAICS: 486210, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 16, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636533977
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636533977?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Markets Take Wild Ride on Ruble, Oil; U.S. Treasurys Are Snagged by Investors, Sending Yield to Lowest Since October
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Traders said price swings weren't being driven by any one piece of news, but instead by investors scrambling to adjust to rapidly changing market dynamics set in motion by the fall in oil prices and the growing risk of financial instability in Russia. The yield on the benchmark 10-year Treasury note, used to price interest rates from mortgages and car loans to corporate bond issuance, fell to 2.07% from 2.117% a day before.
Full text: Broad swings rattled global trading on Tuesday, as the fallout from the oil-price collapse and the Russian ruble's plunge whipsawed markets and sent U.S. stocks to their third consecutive decline. A volatile session began with stock markets in the U.S. and Europe sliding deep into the red. Indexes then staged a sharp recovery before faltering again by the time U.S. traders finished for the day. The Dow Jones Industrial Average finished the day down 111.97 points, or 0.7%, at 17068.87. With Tuesday's declines, the Dow has lost 3% over the past three trading sessions. The 30-stock average has retreated in six of the past seven trading days. Other markets saw sharp moves as well. Yields on U.S. Treasurys plunged as investors sought out safe havens, sending bond prices higher. Crude oil prices slipped, bounced and settled nearly unchanged, before slumping again after the close of regular trading following a bearish inventory report. In the background, the Russian ruble fell 5.6% against the dollar, overwhelming efforts by Russian officials to curb the decline by sharply raising interest rates. Traders said price swings weren't being driven by any one piece of news, but instead by investors scrambling to adjust to rapidly changing market dynamics set in motion by the fall in oil prices and the growing risk of financial instability in Russia. Adding to investor jitters, the worries about Russia have revived memories of the turmoil that swept global markets after the country defaulted on its debt in 1998. Although a falling ruble will make it harder for Russian businesses to repay external debt, a more flexible exchange rate has made this year's decline more orderly than in 1998. That could damp the aftereffects, analysts said. Goldman Sachs Group Inc. this week started rejecting requests from institutional clients to engage in certain ruble-denominated trades, according to people familiar with the matter. The moves, which the banks are deploying to protect themselves against further swings in the currency, have the potential to add to the strain on Russia's financial system. "The rest of the world is on shaky ground," said David Ader, head of government bond strategy at CRT Capital Group LLC. That is prompting investors to move into a more defensive stance, he said. "Investors are not willing to take new risk" in less-developed markets at the moment, he said. "They want to preserve capital and make fresh asset allocation decisions in January." U.S. stocks started the day with modest losses, but the market ramped higher during the late morning as oil prices stabilized after days of declines. The Dow Jones Industrial Average was up as much as 247 points before noon. However, traders said the jump in stocks was largely led by short-term players buying to reverse bets that stocks would fall. Buying interest by long-term investors was said to be light, and stock prices slid sharply in the final hour of trading. "Buyers are patient, there's no rush," said Christian O'Brien, an equity trader in the New York office of financial-services firm Raymond James. Despite the recent declines, the Dow remains just 5% below its Dec. 5 record high. The S&P 500 dropped 16.89 points, or 0.8%, to 1972.74. The Nasdaq Composite Index fell 57.32 points, or 1.2%, to 4547.83. Those dynamics surrounding oil prices, which have lost 48% since its June high, and Russia, are taking precedence over a belief among many investors that the U.S. economy is on a healthier growth path. "To the extent that there continues to be stress [on oil], it could be difficult for U.S. markets to perform well," said David Lefkowitz, equity strategist with UBS Wealth Management. "That said, the actual impact on the U.S. is going to be minimal." And for the foreseeable future, many investors expect oil prices to be under pressure. "Not only are we having an increase in supply, but we're having a decrease in demand" from previous estimates, said Oliver Sloup, director of managed futures at brokerage iiTrader in Chicago. "You look at Economics 101, and that's a terrible scenario." The volatility in global markets isn't expected to deter the Federal Reserve from laying additional groundwork for raising interest rates next year. Investors expect the Fed to change its forward-looking policy statement at the conclusion of a two-day meeting Wednesday by removing language that it expects to keep interest rates low "for a considerable period." European stocks recovered from early losses, with the Stoxx Europe 600 closing up 1.7% after losing 1.3% earlier in the session. The index fell 5.8% last week. Haven assets gained. The yield on the benchmark 10-year Treasury note, used to price interest rates from mortgages and car loans to corporate bond issuance, fell to 2.07% from 2.117% a day before. It marks the lowest closing for the yield since May 2013. When bond yields fall, their prices rise. The previous closing low of the year was 2.09% on Oct. 15, when the yield dipped below the 2% mark on an intraday basis. The yen, another asset considered safe in times of turmoil, rose against the dollar. U.S. crude oil futures swung between gains and losses during the afternoon. They settled up two cents at $55.93 a barrel. In postclose U.S. trading, futures fell to $55.50 following a fresh round of bearish private inventory data. Min Zeng and Nicole Friedman contributed to this article. Write to Saumya Vaishampayan at and Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Interest rates; Stock exchanges; American dollar; Volatility; Crude oil prices; External debt
Location: United States--US Russia Europe
Company / organization: Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636541527
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636541527?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction o r distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Obama Blocks Oil and Natural Gas Drilling in Alaska's Bristol Bay; Praised by Wildlife Groups, Announcement Brings Muted Reaction From Oil, Gas Proponents
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Tuesday's announcement is separate from a forthcoming decision by the U.S. Environmental Protection Agency regarding the extent to which it intends to allow mining activity at the Pebble Mine site onshore around Bristol Bay.\n
Full text: WASHINGTON--President Barack Obama announced Tuesday he is indefinitely blocking oil and natural gas drilling in Alaska's Bristol Bay, a move that drew cheers from wildlife groups and muted reaction from oil and gas proponents. In , Mr. Obama cited the environmental and economic benefits of Bristol Bay's natural habitat, including how it provides 40% of the nation's wild-caught seafood, as reasons why drilling shouldn't be allowed. "It's something that's too precious for us just to be putting out to the highest bidder," Mr. Obama said. The announcement comes just weeks before the administration intends to release its draft plan for what federal waters it proposes to open up to energy development. Tuesday's announcement is relatively noncontroversial. There is no oil and gas drilling in the region, which spans about 32.5 million acres of federal waters in Southwestern Alaska. A portion of the region was leased in the mid-1980s. It was never developed due to litigation, according to the Obama administration, and because of souring public sentiment following the 1989 Exxon Valdez oil spill that occurred in a separate region of Alaska. Today, few if any companies have expressed interest in developing Bristol Bay. "Given the lack of interest by industry and the public divide over allowing oil and gas exploration in this area, I am not objecting to this decision at this time," Sen. Lisa Murkowski (R., Alaska) said in a written statement. "I think we all recognize that these are some of our state's richest fishing waters." Environmental groups and leaders of local groups around Bristol Bay applauded the move. "The administration's decision to protect Bristol Bay is a huge win for both Bristol Bay fishermen and the region's coastal communities," said Margaret Williams, managing director of the World Wildlife Fund's Arctic program. The move makes permanent a step the Obama administration took in 2010 as part of its offshore leasing plan that expires in 2017. At that time, the Interior Department reversed earlier plans made by the George W. Bush administration to allow leases in the region. The Interior Department is expected to announce as soon January 2015 its next offshore leasing plan, something it is required by law to do every five years. The last such plan, proposed in 2010 weeks before BP's Deepwater Horizon drilling rig exploded in the Gulf of Mexico and caused the biggest oil spill in U.S. history, opened up areas in the Gulf of Mexico and Arctic Ocean to leasing. Industry executives are lobbying the administration to allow oil and gas leasing along the Atlantic Coast, something it didn't allow in its last plan. Much has changed since 2010, including the nation's onshore oil and gas boom fueled by hydraulic fracturing and the more recent drop in global oil prices, which is squeezing the profit margins for many energy companies. Tuesday's announcement is separate from a forthcoming decision by the U.S. Environmental Protection Agency regarding the extent to which it intends to allow mining activity at the Pebble Mine site onshore around Bristol Bay. Write to Amy Harder at Credit: By Amy Harder
Subject: Oil spills; Environmental protection; Petroleum industry; Natural gas; Energy industry
Location: Bristol Bay
People: Obama, Barack Bush, George W Murkowski, Lisa
Company / organization: Name: World Wildlife Fund; NAICS: 813312
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636541539
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636541539?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduc ed with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
A Pimco Emerging-Market Fund Hit by Russian-Debt Bet; Fund Has Lost 9% This Month on Oil, Russia
Author: Wirz, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
The fund, run by longtime Pimco fund manager Michael Gomez, held at least 17% of its assets at Sept. 30 in Russian corporate bonds issued by firms like state-owned oil company OAO Rosneft, according to The Wall Street Journal's analysis of the fund's semiannual report.
Full text: A Pacific Investment Management Co. emerging-market bond fund has stumbled over a large bet on bonds issued by Russian corporations amid a record-setting plunge in the ruble. The $3.3 billion Pimco Emerging Markets Bond Fund has lost 9% this month, according to Morningstar Inc., fueled by the decline in oil prices and the gathering effect on Russian economic output of U.S. sanctions. The fund, run by longtime Pimco fund manager Michael Gomez, held at least 17% of its assets at Sept. 30 in Russian corporate bonds issued by firms like state-owned oil company OAO Rosneft, according to The Wall Street Journal's analysis of the fund's semiannual report. Total exposure to Russia was 18.2%, including government bonds, more than twice the 8.43% Russia weighting in the emerging-markets bond index Pimco uses as a benchmark. The fund was up 5.65% for the year at the start of the month but finished Tuesday with a 3.4% loss for the year so far, according to Morningstar, compared with a 2.06% gain for the benchmark index, according to Morningstar. "While emerging markets have been volatile, we think segments of the market offer compelling risk/reward opportunities for the long-term investor," Mr. Gomez said in an email. Buying Russian debt helped the Pimco fund's performance early in the year but boomeranged in the last quarter as falling oil prices and global sanctions took their toll on Russia's economy. Morningstar ranked the fund's performance in the top 5% of 106 emerging-market debt funds in June but by Dec. 15 it had fallen to the 62d percentile. At the end of September, the Pimco Emerging Markets Bond Fund held about $725 million face amount, or the amount owed at maturity, of Russian corporate bonds, which it valued at about $734 million. The same amount of the bonds was valued at $635 million on Dec. 12, reflecting an average decline in value of 13.5%, according to data from FactSet. The fund's losses accelerated in December, showing the dangers large asset managers take when they buy high-yielding debt that is harder to sell when market sentiment sours. The fund has returned 6% annually in the past 10 years, ranking it in the 75th percentile of comparable funds Morningstar tracked over that period. Mutual-fund firms must pay out on the day shareholders redeem shares, which can put portfolio managers in a cash crunch when prices fall sharply. Investors have pulled a net $3.3 billion from the fund this year through November, according to Morningstar. Pimco, a Newport Beach, Calif., unit of German insurer Allianz SE, has inconsistently disclosed the extent of the fund's Russian investments. The fund reported an 11.3% exposure to Russia in a so-called fund card published Sept. 30 but reported a much lower weighting of 2.5% in a semiannual report published the same day. The semiannual report listed most of the Russian bonds as investments in Luxembourg, Ireland and the British Virgin Islands, where the Russian companies issued the bonds through offshore affiliates incorporated there. Mr. Gomez didn't comment on the fund's performance or its disclosure of the Russian investment. Some other fund companies say they don't list their holdings that way. MFS Investment Management, which runs the Pimco fund's largest competitor, the MFS Emerging Markets Debt Fund, reports ownership of some of the same bonds as investments in Russia. "We book our holdings by country of risk, not country of issuance," said Paul Denoon, director for emerging-markets debt at AllianceBernstein Investments Inc., which competes against Pimco. "Investors just look at country of issuance so we're trying to provide what we think is better information." Pimco doesn't appear to have violated any rules. Pimco discloses that it geographically classifies bonds by country of incorporation, which may differ from country of risk. The firm highlighted losses from Russian corporate bonds in a semiannual report published in September without disclosing the magnitude of the holdings or losses. Using place of incorporation versus place of risk to categorize holdings is "not necessarily a problem, but the funds should be consistent and ideally should disclose which approach they are using," said Arthur Laby, a professor at Rutgers University School of Law who specializes in securities regulation. The fund's troubles come at a difficult time for Pimco as the firm tries to rebuild after the departures of co-founder Bill Gross and former Chief Executive Mohamed El-Erian this year. Much of the firm's reputation for excellence in bond investing rested on the duo's shoulders and Mr. El-Erian personally built Pimco's dominant emerging-markets business, managing the Emerging Markets Bond Fund from 1999 to 2005. Mr. Gomez has run the fund for most of the intervening years and has recently focused on outsize bets in markets with relatively high credit ratings, like Russia and Mexico. While Russia is still rated investment grade by credit-ratings firms, its bonds now trade at junk-debt prices. Pimco has long dominated emerging-markets investing--it still runs the largest such fund, the Pimco Emerging Local Bond Fund, managing $9.7 billion--and some competitors worry its troubles will fan investor anxiety about emerging markets broadly. "I think it's bad for everybody," said Carl Ross, manager of the $3.3 billion GMO Emerging Country Debt fund. "The clients of any manager who is getting crushed can sour on the whole asset class." Mike Cherney contributed to this article. Write to Matt Wirz at Credit: By Matt Wirz
Subject: Investment advisors; Mutual funds; Emerging markets; Bond issues; Securities regulations; Government bonds
Location: Russia
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Pacific Investment Management Co; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636541543
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636541543?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Prices Bounce Off Multiyear Lows; Prices Have Plunged Nearly 50% Since June
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
In the Northeast, where heating-oil consumption is high, distillate stocks stood at 36.1 million barrels as of Dec. 12, the lowest level on record, according to EIA weekly data going back to 1990.
Full text: Oil prices rallied Wednesday as traders closed out positions following a dramatic plunge in prices in recent months. Light, sweet crude for January delivery settled up 54 cents, or 1%, at $56.47 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, settled up $1.17, or 1.9%, at $61.18 a barrel on ICE Futures Europe. Market watchers attributed the rebound to traders who had bet on lower prices closing out positions. Oil prices have plunged nearly 50% since June to the lowest level in more than five years. "Commodity guys love to be contrarians," said Michael Hiley, head of the energy over-the-counter trading desk at brokerage LPS Partners Inc. He noted that the U.S. oil benchmark had failed to trade above the previous day's highs for 16 straight days. Once the contract rose Wednesday to trade above $57.15 a barrel--Tuesday's intraday high--the price rose sharply, indicating that algorithmic traders may have used that as an indicator to buy. Prices pared some gains after settlement as the dollar strengthened on signs that . Oil is traded in dollars, so a stronger dollar makes oil more expensive for buyers using other currencies. Analysts said concerns about ample oil supplies and tepid demand continue to dominate the oil market and that this rally could be short-lived. "The uncertainty in the market is creating a lot of price volatility," said Gene McGillian, senior analyst at Tradition Energy. "I don't think we've seen enough to suggest that the market's found a bottom yet." Traders are also likely trying to lock in profits before year-end, said Donald Morton, senior vice president at Herbert J. Sims Co. "People are just going to shuffle around a little bit going into the end of the year and take some of their gains off the table," he said. U.S. oil supplies fell by about 800,000 barrels in the week ended Dec. 21, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a drop of 1.9 million barrels. However, distillate stocks, including heating oil and diesel, unexpectedly fell by about 200,000 barrels. Analysts had expected a 1-million-barrel increase. Market watchers have already warned in recent months than distillate supplies are too low ahead of the winter, when heating-oil demand is strong. In the Northeast, where heating-oil consumption is high, distillate stocks stood at 36.1 million barrels as of Dec. 12, the lowest level on record, according to EIA weekly data going back to 1990. Distillate inventories are "not keeping up with what they need out there to meet a cold January and February," said Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates. Diesel futures, which can also serve as a proxy for heating oil, rose 4.85 cents, or 2.5%, to $2.0085 a gallon. Gasoline futures settled up 2.52 cents, or 1.6%, at $1.5662 a gallon. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Futures; Crude oil prices; Petroleum production
Location: Russia United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636549618
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636549618?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Petrobras CEO Is in the Crosshairs; Foster Under Pressure Amid Allegations of Corruption at State-Run Oil Company
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Maria das Graças Silva Foster started at Brazil's state-run oil company as a college intern more than 30 years ago. Now, as Petrobras's chief executive she is facing pressure to step down. Petroleo Brasileiro SA, as it formally known, is in the midst of a multibillion-dollar corruption probe that has ensnared three former executives and more than 20 executives from Brazil's biggest construction companies. The scandal has been a hot potato for the administration of recently re-elected President Dilma Rousseff. Brazilian Vice President Michel Temer on Tuesday told reporters during an event in Rio de Janeiro that Ms. Rousseff "will look into what's best" regarding Ms. Foster's tenure. Ms. Rousseff and Ms. Foster are known to be good friends. A spokesman for Ms. Rousseff declined to comment. Petrobras shares have fallen to their lowest level in a decade, hit by the corruption scandal and a slump in global oil prices. Shares closed at $6.28 in New York on Tuesday. Four months ago, they were trading above $20. Since the scandal erupted in March, Petrobras and Ms. Foster have maintained they were victims of the alleged corruption and weren't aware of it until police made their first arrest in the case. Prosecutors haven't implicated her in any of their indictments of former Petrobras executives. The company declined to comment for this article and has declined requests for an interview with Ms. Foster. A chorus of senior government officials, politicians and analysts say the scandal is an embarrassment for Brazil and a major distraction for the company, which has twice . . "A way to return the credibility of the company is by appointing new directors, new executives," said Mendonça Filho, a politician with the opposition Democrats party, also known as DEM. allege that several former Petrobras executives colluded with construction companies to overcharge Petrobras for work contracts and pocket millions of dollars for themselves. They also allege that some of the money ended up in the pockets of politicians in Ms. Rousseff's Worker's Party and other major political parties. Representatives from the Worker's Party have denied this claim. So far, 36 people have been charged with crimes including money laundering and fraud. Ms. Foster, 61 years old, was appointed chief executive in early 2012. She grew up poor in a Rio de Janeiro favela, or slum, and recycled cans as a child to pay for her education. Investors were encouraged by her appointment. A chemical engineer, Ms. Foster is widely respected for her technical knowledge. "You can ask her, 'How much oil does this particular platform extract per day?' and she'll give you the number," says Sergio Lazzarini, an economist at Brazilian business school Insper. But while output has increased on Ms. Foster's watch, the corruption scandal has spooked investors. The U.S. Department of Justice and Petrobras, whose shares trade in New York. With oil prices tumbling, Petrobras is facing a cash squeeze. The company said on Friday it will scale back ambitious offshore oil exploration and production efforts. The world's most-indebted oil major, Petrobras says it has enough capital to operate for the next six months. But Brazil's government has taken steps to guarantee its debt should the company need to borrow sooner. "Maybe a new face could give a breath of fresh air to the company," said Ricardo Bedregal, an analyst at consultancy IHS in Rio de Janeiro. "Even though [the corruption scandal] might not be her fault, people are looking for someone to blame." Paul Kiernan contributed to this article. Write to Will Connors at Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636558406
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636558406?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dollar Loses Ground as Oil Fuels Worries
Author: Ramage, James
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Dec 2014: C.4.
Abstract:
Investors have piled into the dollar against the yen and euro over the past several months in their belief that an improving U.S. economy would move the Federal Reserve to raise interest rates sooner than central banks in Japan and the eurozone.
Full text: The dollar slumped to a one-month low against the yen on Tuesday, as tumbling oil prices continued to fuel investors' concerns about global growth. The dollar fell 1.2% in late-afternoon trading to 116.35 yen, its lowest in a month. The euro gained 0.6% to $1.2512, its strongest since Nov. 27. Global oil prices fell for a fifth session in a row, with Brent crude futures ending at $59.86 a barrel, the lowest in more than five years. Some investors are worried that oil's drop signals a softening global economy, prompting them to shed their bets on a stronger dollar and buy haven assets such as the Japanese yen and U.S. Treasurys. "The concern is that the decline in oil prices will be more persistent, and that this will start to hurt economies and change central banks' behavior," said Sireen Harajli, foreign-exchange strategist at Mizuho Bank. "So investors have headed into assets that are considered safer, like the yen and the Swiss franc, which is why we see [the dollar-yen pair] back around 116 yen." The Russian ruble dropped to a record low against the dollar Tuesday, despite the Bank of Russia raising interest rates by 6.5 percentage points. Analysts said investors were convinced the rate increase wouldn't be enough to alleviate the pressure on the currency from falling oil prices and Western sanctions. The dollar was up 4.3% at 68.442 rubles in late-afternoon trading. Investors will be watching the Federal Open Market Committee on Wednesday for signals about the central bank's timeline for raising interest rates. The Federal Reserve's policy-making committee concludes its two-day meeting with a statement scheduled for release at 2 p.m. EST. Investors have piled into the dollar against the yen and euro over the past several months in their belief that an improving U.S. economy would move the Federal Reserve to raise interest rates sooner than central banks in Japan and the eurozone. Credit: By James Ramage
Subject: American dollar; Central banks; Petroleum industry; Interest rates; Banking
Company / organization: Name: Federal Open Market Committee--FOMC; NAICS: 921130
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 17, 2014
column: Currency Trading
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636584111
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636584111?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Corporate News: General Electric Warns Of Oil-Price Effects
Author: Mann, Ted
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Dec 2014: B.3.
Abstract:
In a sign that GE has returned to a more predictable trajectory, GE issued annual earnings per share guidance for next year, the first time it has made such forecasts since the financial crisis.
Full text: General Electric Co. warned on Tuesday its profit next year could be hurt by the plunge in oil prices, a new hurdle for CEO Jeff Immelt in his efforts to wring more growth out of the conglomerate's industrial operations. Mr. Immelt forecast that next year the company would be able to achieve a long promised goal of reducing the share of GE's earnings from its finance operation to about a third from nearly half, helped by the planned spinoff of its consumer finance operation in 2015. That is welcome news for investors who believe the industrial operations are less risky and more valuable, but it puts pressure on the CEO to deliver strong results from that side of the company. Briefing analysts and investors in the NBC soundstage that hosts Saturday Night Live, Mr. Immelt returned repeatedly to his theme that GE is in the midst of a historic "pivot" back to its industrial roots and away from financial operations. The plunge in oil prices deprives Mr. Immelt of one of his main industrial growth drivers -- the company's $17 billion oil and gas operation. Now GE will have to rely on sales of locomotives, gas turbines, jet engines and medical imaging devices to generate gains. Mr. Immelt often invoked his $17 billion agreement to buy the energy assets of Alstom SA, which he said will provide decades worth of future earnings from an installed base of power-generating equipment. "Alstom is really the priority here, guys," Mr. Immelt said, adding that the company will focus in 2015 and 2016 on completing that purchase and integrating the two vast power companies. In a sign that GE has returned to a more predictable trajectory, GE issued annual earnings per share guidance for next year, the first time it has made such forecasts since the financial crisis. The company said it expects industrial per share earnings next year of between $1.10 and $1.20 while earnings from its GE Capital finance unit will be about 60 cents a share, for a total of between $1.70 a share and $1.80 a share. Analysts forecast 2015 GE earnings up 7% to $1.79 a share. To adjust to the changing landscape in the energy industry, Mr. Immelt said the company is cutting costs at its oil and gas unit and expects flat to negative operating earnings from the business next year. Revenue from its drilling and surface division is forecast to fall 10% in 2015. The company remains confident that its order backlog in areas including equipment for subsea oil production would translate into future sales. "People don't stop projects that are like this," Mr. Immelt said. Credit: By Ted Mann
Subject: Petroleum industry; Crude oil; Earnings forecasting
Location: United States--US
Company / organization: Name: General Electric Co; NAICS: 332510, 334290, 334512, 334519
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Dec 17, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636584954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636584954?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permis sion of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Prices Snap Their Losing Streak --- Crude Edges Higher as Buyers 'Bottom Fish' but Sustained Recovery Looks Unlikely; Traders Close Out Short Positions
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Dec 2014: C.4.
Abstract:
Analysts expect the U.S. Energy Information Administration to report that oil supplies fell by 1.9 million barrels last week, while gasoline stocks rose by 2 million barrels and distillate inventories rose by 1 million barrels.
Full text: U.S. oil prices broke a four-session losing streak Tuesday after posting big swings earlier in the session, as traders wagered on shrinking supplies and jockeyed to detect a bottom in a market that has plunged nearly 50% since June. The benchmark U.S. oil price settled two cents higher at $55.93 a barrel on the New York Mercantile Exchange. Prices traded as low as $53.90 a barrel and as high as $57.15 a barrel in the session. Brent crude, a global price gauge, settled down 2% at $59.86 a barrel, its lowest settlement since May 19, 2009. Few traders believe the recent strength in the oil market suggests a sustained rebound. Oil prices have sunk in recent months on concerns that ample global supplies are outweighing tepid demand growth. "It's not surprising for there to be people trying to bottom fish" after oil prices hit a succession of five-year lows, said Anthony Lerner, senior vice president of industrial commodities at brokerage R.J. O'Brien & Associates LLC. Some market watchers expected that weekly U.S. data on the nation's petroleum markets, due out on Wednesday, will show a decline in crude-oil supplies last week. Analysts expect the U.S. Energy Information Administration to report that oil supplies fell by 1.9 million barrels last week, while gasoline stocks rose by 2 million barrels and distillate inventories rose by 1 million barrels. They also expect that refineries ran at 95.3% of capacity, an unusually high rate, to take advantage of cheap domestic crude supplies. "The refiners are still cranking it out," said John Kilduff, founding partner of Again Capital, a fund that invests in energy commodities. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 1.9 million-barrel build in crude supplies, a 2.8 million-barrel increase in gasoline stocks and a 1 million-barrel draw in distillate inventories, industry sources said. U.S. oil prices fell about 60 cents on the news. Contract expirations also could be causing volatility in the market, as traders close out positions. The front-month Brent contract for January delivery expired at settlement Tuesday. Nymex options for January crude oil also expired Tuesday, with a large number of positions around the level where the market settled. Traders who had used options to bet on lower prices may have had to buy futures contracts ahead of expiration, said Oliver Sloup, director of managed futures at brokerage iiTrader in Chicago. "A lot of traders have definitely been on the short side," meaning they have bet on lower prices, Mr. Sloup said. "We're seeing some of those shorts starting to cover those positions." Prices at the pump have dropped as well. Retail gasoline on average cost $2.53 a gallon in the U.S. on Tuesday, according to AAA, down from $3.23 a gallon a year ago. Gasoline prices haven't fallen to the same degree in other countries due to currency conversions, taxes and fuel subsidies in some places. The drop in oil prices earlier Tuesday rattled financial markets and currencies around the globe. In a striking overnight move, the Russian central bank raised its key interest rate to 17% from 10.5% after the ruble's sharpest daily drop against the dollar in more than a decade. In Tuesday's early trading, oil prices tumbled on weak economic data out of Europe and China, with Brent crude falling below $60 a barrel for the first time since May 2009. Concerns about what slowing economic growth means for oil demand are compounded by a steady flow of supplies. The Organization of the Petroleum Exporting Countries won't call for an emergency meeting unless something drastic happens in the oil market, the oil minister of the United Arab Emirates said Monday. On Tuesday, Russian Energy Minister Alexander Novak said that his country would maintain its current level of oil production next year. January reformulated gasoline blendstock, or RBOB, fell 3.54 cents, or 2.2%, to $1.5410 a gallon, the lowest settlement since May 1, 2009. January diesel slid 4.17 cents, or 2.1%, to $1.96 a gallon, the lowest level since Aug. 24, 2010. --- Georgi Kantchev, Eric Yep, Asa Fitch and Summer Said contributed to this article.
Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 17, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636585482
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636585482?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Global Jitters Send Markets On Wild Ride --- U.S. Stocks Yo-Yo Following Russia's Shock Rate Rise and Oil's Long Slide
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Dec 2014: C.1.
Abstract:
Crude oil prices slipped, bounced and settled nearly unchanged, before slumping again after the close of regular trading following a bearish inventory report. Traders said price swings weren't being driven by any one piece of news, but instead by investors scrambling to adjust to rapidly changing market dynamics set in motion by the fall in oil prices and the growing risk of financial instability in Russia.
Full text: Broad swings rattled global trading on Tuesday, as the fallout from the oil-price collapse and the Russian ruble's plunge whipsawed markets and sent U.S. stocks to their third consecutive decline. A volatile session began with stock markets in the U.S. and Europe sliding deep into the red. Indexes then staged a sharp recovery before faltering again by the time U.S. traders finished for the day. The Dow Jones Industrial Average finished the day down 111.97 points, or 0.7%, at 17068.87. With Tuesday's declines, the Dow has lost 3% over the past three trading sessions. The 30-stock average has retreated in six of the past seven trading days. Other markets saw sharp moves as well. Yields on U.S. Treasurys plunged as investors sought out safe havens, sending bond prices higher. Crude oil prices slipped, bounced and settled nearly unchanged, before slumping again after the close of regular trading following a bearish inventory report. In the background, the Russian ruble fell 5.6% against the dollar, overwhelming efforts by Russian officials to curb the decline by sharply raising interest rates. Traders said price swings weren't being driven by any one piece of news, but instead by investors scrambling to adjust to rapidly changing market dynamics set in motion by the fall in oil prices and the growing risk of financial instability in Russia. Adding to investor jitters, the worries about Russia have revived memories of the turmoil that swept global markets after the country defaulted on its debt in 1998. Although a falling ruble will make it harder for Russian businesses to repay external debt, a more flexible exchange rate has made this year's decline more orderly than in 1998. That could damp the aftereffects, analysts said. Goldman Sachs Group Inc. this week started rejecting requests from institutional clients to engage in certain ruble-denominated trades, according to people familiar with the matter. The moves, which the banks are deploying to protect themselves against further swings in the currency, have the potential to add to the strain on Russia's financial system. "The rest of the world is on shaky ground," said David Ader, head of government bond strategy at CRT Capital Group LLC. That is prompting investors to move into a more defensive stance, he said. "Investors are not willing to take new risk" in less-developed markets at the moment, he said. "They want to preserve capital and make fresh asset allocation decisions in January." U.S. stocks started the day with modest losses, but the market ramped higher during the late morning as oil prices stabilized after days of declines. The Dow Jones Industrial Average was up as much as 247 points before noon. However, traders said the jump in stocks was largely led by short-term players buying to reverse bets that stocks would fall. Buying interest by long-term investors was said to be light, and stock prices slid sharply in the final hour of trading. "Buyers are patient, there's no rush," said Christian O'Brien, an equity trader in the New York office of financial-services firm Raymond James. Despite the recent declines, the Dow remains just 5% below its Dec. 5 record high. The S&P 500 dropped 16.89 points, or 0.8%, to 1972.74. The Nasdaq Composite Index fell 57.32 points, or 1.2%, to 4547.83. Those dynamics surrounding oil prices, which have lost 48% since its June high, and Russia, are taking precedence over a belief among many investors that the U.S. economy is on a healthier growth path. "To the extent that there continues to be stress [on oil], it could be difficult for U.S. markets to perform well," said David Lefkowitz, equity strategist with UBS Wealth Management. "That said, the actual impact on the U.S. is going to be minimal." And for the foreseeable future, many investors expect oil prices to be under pressure. "Not only are we having an increase in supply, but we're having a decrease in demand" from previous estimates, said Oliver Sloup, director of managed futures at brokerage iiTrader in Chicago. "You look at Economics 101, and that's a terrible scenario." The volatility in global markets isn't expected to deter the Federal Reserve from laying additional groundwork for raising interest rates next year. Investors expect the Fed to change its forward-looking policy statement at the conclusion of a two-day meeting Wednesday by removing language that it expects to keep interest rates low "for a considerable period." European stocks recovered from early losses, with the Stoxx Europe 600 closing up 1.7% after losing 1.3% earlier in the session. The index fell 5.8% last week. Selling eased in Asia early Wednesday with stocks in Japan rebounding even as the country's exports growth slowed. The Nikkei Stock Average was up 0.4%, Australia's S&PASX was up 0.7%, South Korea's Kospi was up 0.1%, the Shanghai composite was flat, while Hong Kong's Hang Seng Index lost 0.3%. Haven assets gained. The yield on the benchmark 10-year Treasury note fell to 2.07% from 2.117% a day before. It marks the lowest closing for the yield since May 2013. When bond yields fall, their prices rise. --- Min Zeng and Nicole Friedman contributed to this article. Credit: By Alexandra Scaggs
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 17, 2014
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636586319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636586319?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Europe's Deflation Struggle Intensifies; With Oil Prices Tumbling, Inflation Rates Seem Likely to Decline Further in Coming Months
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Other central banks across Europe face similar challenges. listed a range of options it would consider if the outlook for inflation were to continue to worsen, including asset buying, lending to banks, a negative main rate and currency market interventions. , Polish rate-setter Jerzy Hausner said the central bank should consider cutting its benchmark interest rate again if prices continued to fall early next year.
Full text: Europe's struggle to avoid a slide into deflation suffered a setback in November, as consumer prices across the European Union's 28 members rose at the slowest annual pace in five years. The bloc's statistics agency on Wednesday confirmed that consumer prices in the 18 countries that share the euro were just 0.3% higher than in the same month of 2013, while they were 0.4% higher in the EU as a whole. In October, the annual rates of inflation were 0.4% and 0.5%, respectively. In both the eurozone and the EU, that returned the inflation rate to September lows that hadn't been matched since October and September of 2009 respectively. With , inflation rates around the continent appear likely to decline further in coming months, and may turn negative in the early months of next year as prices fall below their levels of a year earlier. Economists at Citibank lowered their near-term inflation forecasts on Wednesday and now expect prices in December to be 0.1% lower than a year earlier, with prices in January down 0.2%. The last time prices were lower than a year earlier was in September 2009, following the sharp economic contraction that followed the onset of the financial crisis in late 2008. The European Central Bank has said it will reassess its existing stimulus policies, which include cheap bank loans and purchases of asset-backed securities and covered bonds, in early 2015, and decide whether to do more to ensure that annual inflation moves closer to its target of just below 2%. Other central banks across Europe face similar challenges. listed a range of options it would consider if the outlook for inflation were to continue to worsen, including asset buying, lending to banks, a negative main rate and currency market interventions. , Polish rate-setter Jerzy Hausner said the central bank should consider cutting its benchmark interest rate again if prices continued to fall early next year. The problem of low inflation is now being felt even in the U.K., which typically has higher inflation rates than elsewhere. Its measure of inflation fell to a 12-year low of 1% in November, and Bank of England Governor Mark Carney acknowledged it will fall further, requiring him to write a letter to the government explaining why the central bank had failed to meet its inflation target. When inflation rates were higher, policy makers would likely have ignored falling oil prices, expecting the boost to real household spending power to compensate over the medium term as prices of other goods and services rose. But the very low levels of inflation across Europe can be harmful to economic growth, crimping company profits and investment, while making it more difficult for governments and households to reduce high levels of debt. And a slide into deflation would exacerbate those problems. Policy makers worry that if consumer prices start to fall, businesses and households will start to postpone spending decisions in the expectation that goods will be cheaper in the future. That in turn can become a self-fulfilling spiral, and the case of Japan has shown how difficult it can be to revive growth after deflation has taken hold. "While the ECB would normally look through any drops in the headline eurozone inflation rate resulting from falling oil prices, the bank will be seriously concerned that this will lead to a further weakening in inflation expectations that then feeds through to result in a further drop in already worryingly low core inflation," said Howard Archer, an economist at IHS. Still, some key policy makers believe the risk of a slide into a prolonged period of deflation remains very low. "For me, a few months of inflation rates below zero does not constitute deflation. That would require a self-perpetuating downward spiral of negative inflation rates, GDP declines and wage declines," Jens Weidmann, president of Germany's Bundesbank and a member of the ECB's governing council, told reporters Monday. "This risk remains minimal." Separate figures released by Eurostat show wage rises remained at modest levels in the three months to September, and are therefore unlikely to contribute to a pickup in inflation. Total hourly labor costs were up 1.3% from the third quarter of 2013, a slight slowdown from the 1.4% rate of increase recorded in the second quarter. Wage rises were unchanged at 1.4%. Write to Paul Hannon at Credit: By Paul Hannon
Subject: Central banks; Inflation; Banking; Consumer Price Index; Eurozone; Deflation
Location: Europe
People: Weidmann, Jens
Company / organization: Name: Citibank; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636637282
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636637282?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.K. Economy Set to Benefit From Low Oil Prices, Higher Wages; Turnaround in Prospects Comes as Britain Gears Up for General Election
Author: Douglas, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
The turnaround in British households' finances comes at an auspicious time for Prime Minister David Cameron and his Conservative Party, who rule in coalition with the smaller Liberal Democrats.
Full text: LONDON--Christmas has come early for British consumers. Tumbling oil prices, rising wages and declining borrowing costs are lifting households' spending power, sending a powerful signal that consumers are set to keep Britain's economy growing in the New Year. Wage growth in the U.K., excluding bonuses, rose at an average annual rate of 1.6% between August and October, the fastest pace of growth in two years, according to data from the Office for National Statistics released Wednesday. The increase in salaries is now comfortably outpacing annual inflation, easing a squeeze on Britons' living standards after several years when prices rose faster than earnings. Annual inflation was just 1% in November, its lowest level since 2002. Bank of England officials believe it is "significantly more likely than not" that inflation cools further in the coming months due to plummeting oil prices, according to minutes of officials' December policy meeting, also published Wednesday. Borrowing costs in the U.K. have also fallen, according to the central bank, especially for home buyers, reflecting a broader decline in interest rates world-wide as investors nudge down their expectations for global growth. This combination of weakening prices and improving earnings add up to "a powerful cocktail" that should put the fizz back into U.K. consumption next year, said Robert Wood, chief U.K. economist at German bank Joh. Berenberg, Gossler & Co. KG. BOE officials in December concluded the decline in the oil price in particular should act as a mini-stimulus for the U.K. and its major trading partners, even as Russia and other energy producers reel from crude's recent slide. The BOE estimates the oil price has fallen 35% in sterling terms since June. Economists say rising consumption should help offset the headwinds facing the U.K. economy in 2015 from weakness in the neighboring eurozone and a slowdown in China and Japan. Among the world's largest economies, only the U.S. is showing signs of a durable expansion. The turnaround in British households' finances comes at an auspicious time for Prime Minister David Cameron and his Conservative Party, who rule in coalition with the smaller Liberal Democrats. The U.K. votes in a general election next year where the economy is shaping up to be a key issue. Most polls show the Conservatives are neck-and-neck with the Labour Party, the main opposition. U.K. treasury chief George Osborne hailed the latest labor market data, which showed a further fall in unemployment, as "a major moment" in the economy's recovery and further evidence that his austere fiscal policies are working. Labour has accused the Conservatives of presiding over a cost-of-living crisis in their nearly five years in power that is only now showing signs of coming to an end. For the Bank of England, subdued inflation is reinforcing officials' resistance to raising the central bank's benchmark interest rate until the economy is on a firmer footing. Minutes of December's policy meeting and the BOE's latest forecasts showed most officials believe wage growth has much further to accelerate before it fuels faster inflation. Investors expect the BOE to raise its benchmark rate in late 2015 or early 2016. Matthew Cowley contributed to this article. Write to Jason Douglas at jason.douglas@wsj.com Credit: By Jason Douglas
Subject: Central banks; Prices; Statistical data
Location: United Kingdom--UK
People: Cameron, David
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: News papers
Language of publication: English
Document type: News
ProQuest document ID: 1636638473
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636638473?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Buffeted by Oil; Sharp Market Swings of Recent Days Show Little Sign of Abating
Author: Cox, Josie; Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
London's FTSE 100--with significant exposure to the oil and gas sector through the likes of BP PLC and Royal Dutch Shell Group PLC--finished 0.1% higher too, as Brent crude crept around 1.5% higher on the day to $60.9 a barrel.
Full text: European markets endured another turbulent session Wednesday, buffeted by a fresh slump and then a sudden and ferocious recovery in the price of oil. Brent crude, which is still down almost 40% so far this year, climbed as high as $63 a barrel in late European trade, a 5% appreciation on the day. The commodity has repeatedly hit multi-year lows in recent days, but some analysts Wednesday said that investors may now be attempting to call the bottom of the slump. "There might be a degree of short coverage ahead of the holidays," said Gareth Lewis-Davies, an analyst at BNP Paribas. "It is also possible that some people are trying to call the bottom of the market, but it is too early to say if this is it," he added. "Things could quickly reverse." Stocks in Europe rose in response to the move. Having fallen in early trade, mirroring a late slump on Wall Street Tuesday, the Stoxx Europe 600 ended the session up 1%. London's FTSE 100--with significant exposure to the oil and gas sector through the likes of BP PLC and Royal Dutch Shell Group PLC--finished 0.1% higher too, as Brent crude crept around 1.5% higher on the day to $60.9 a barrel. Even the Russian ruble enjoyed some respite. The dollar declined almost 13% against the currency to around 60.66 in late European trade, after the country's finance ministry said it has started selling its excess foreign currency holdings on the market. Earlier this week, the central bank dramatically increased the country's key interest rate by 6.5 percentage points to 17% in a desperate attempt to stem outflow, before the ruble on Tuesday tumbled to yet another all-time low against the dollar. Even though the ruble remains more than 45% lower against the dollar so far this year, some investors Wednesday adopted a less pessimistic tone on the Russian economy, than they've had in recent days. "Over the medium to longer term, we continue to expect fundamentals to reassert themselves to drive the equity market higher," said Michael Levy, investment manager at Baring Asset Management, which manages around [euro]36 billion ($45 billion). "We scaled back our exposure to Russia as the situation in the Crimea escalated and are monitoring the latest developments closely, with a view to taking action as required," he said. Moscow's Micex index ended the session 2.1% higher on the day, while the dollar-denominated RTS index surged 14%, and David Kohl, head of currency research at Julius Baer, said that he no longer suggests selling the ruble--a recommendation he'd maintained since April 2014. "From a fundamental point of view the ruble is attractive and is slowly becoming very attractive," he said. The vast majority of asset managers, strategists and economists, however, remain cautious, warning that it would be much too early to say the crisis is over. "Confidence in the country's currency and central bank have been completely undermined," said Karl Steiner, a strategist at SEB. "The central bank will probably increase its efforts to try to stop the development, but experience shows that such a development is difficult to reverse once it has been set in motion," he added. Elsewhere on Wednesday, more volatility could stem from the latest policy statement from the U.S. Federal Reserve as well as the outcome of the first of up to three votes to decide on a new president. The Fed is to change its forward-looking policy statement by removing language that it expects to keep interest rates low "for a considerable period." That could further unsettle markets, with the prospect of higher U.S. rates making many emerging currencies less attractive to investors. Despite the ruble's rebound, the South African rand continued to weaken against the dollar, dropping 0.6% to 11.73 Wednesday. The Nigerian naira, another currency closely linked to oil prices, fell to an all-time low against the dollar. The S&P 500 was up around 1% on the day in late European trade. In Greece, meanwhile, lawmakers completed the first round of voting on the country's president Wednesday, failing to reach the supermajority needed to approve the candidate named by Prime Minister Antonis Samaras, as expected. With uncertainty still high, investors continued to seek the safety of German bonds, with 10-year yields remaining at an all-time low of 0.57%. The euro was around 0.7% weaker against the dollar at $1.2415 in late trade. Gold edged 0.1% higher to $1,195.30 per troy ounce. --Georgi Kantchev contributed to this article Write to Tommy Stubbington at and Josie Cox at Credit: By Josie Cox and Tommy Stubbington
Subject: Petroleum industry; American dollar
Location: United States--US Russia
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: BNP Paribas; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636640075
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
FedEx: Shipping Disrupted by Port Delays; Shipping Giant Reports Disappointing Results, Wasn't Helped by Falling Oil Prices
Author: Stevens, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Last year, FedEx and rival United Parcel Service Inc. were hit by a combination of bad weather and a surge in online sales that helped contribute to an estimated 2 million delayed express packages on Dec. 24, according to data from software tracking developer Shipmatrix Inc. This year the companies' on-time rates have been much higher, the firm said.
Full text: FedEx Corp. reported that holiday peak shipping volume in November was lower than what retailers predicted, resulting in a slight dip in margins for its ground business as it spent more money to prepare for the holidays. The company's results come as delays at the ports in the West Coast have disrupted the flow of goods to retailers during the peak holiday shopping season. Goods that would normally clear the ports in two to four days are now taking a couple of weeks, FedEx executives said, putting retailers scrambling to restock items in time for the holidays in a crunch. "The slowdown in the West Coast ports has been a much bigger deal than people think, and a tremendous amount of inventory was simply not put through the ports in the time frame that the retailers had expected," FedEx Chairman Fred Smith said in a call with analysts. Customers should expect to see a lot of items out of stock, he added. The results fell short of Wall Street earnings expectations partially because the company--with its fleets of more than 600 aircraft and 90,000 vehicles--didn't benefit much from falling oil prices. FedEx executives said that the drop in oil prices won't have a major effect on future earnings. Shares of the company fell 4.6% in midday trading to $166.33. Total profits for the delivery giant increased 23% to $616 million, or $2.14 per share. Analysts polled by Thomson Reuters had expected per-share earnings of $2.22. Ground margins for the quarter ended Nov. 30 dipped to 15.2% from 15.4% as the company invested in expanding its operations to handle the holiday surge but shipped fewer-than-expected packages. Revenue rose 5% to $11.9 billion from a year earlier. Last year, FedEx and rival United Parcel Service Inc. were hit by a combination of bad weather and a surge in online sales that helped contribute to an estimated 2 million delayed express packages on Dec. 24, according to data from software tracking developer Shipmatrix Inc. This year the companies' on-time rates have been much higher, the firm said. And even as traditional retailers have improved their Internet sales, Mr. Smith said they're still playing catch up when it comes to processing those orders. That resulted in backlogs in November, and some major retailers were unable to ship those orders, Mr. Smith said. "So we are seeing a great deal of that traffic now moving into the December time frame," he said. Executives noted that--as usual--e-commerce trends were something of a surprise. The company hasn't yet experienced the same spikes in volume this year as previous years because holiday shopping has been spread out over a longer period. For example, retailers like Wal-Mart Stores Inc. started their holiday promotions earlier and spread out Black Friday deals over the many days. "Over the last several peak seasons we have regularly observed situations where volume hasn't always come where we expected it or come when we expected it. But one thing has been certain: It always comes," added Henry Maier, head of FedEx Ground. Revenue at the company's ground segment increased 8% to $3.06 billion compared with the year-earlier period, while operating income rose 6% to $465 million. The port delays helped boost volume in the company's air-express division, though executives noted that this was a temporary rather than systemic shift. In addition to higher volumes, the company's air express division also benefited from the company's continued implementation of its restructuring program, which includes modernizing its air fleet and completed buyouts of 3,600 employees. Gains were partially offset by higher aircraft maintenance expenses. Operating income in the express division increased 36% to $484 million, compared with the same quarter last year. Revenues increased 3% to $7.02 billion. FedEx executives also touted their recent acquisitions of two companies that will help the delivery giant to increase its presence in the growing e-commerce space. The company on Tuesday said it acquired privately held Bongo International, adding a provider of services that enable international e-commerce orders and shipments. The deal came a day after FedEx agreed to buy logistics provider Genco, which specializes in returns. Executives said they would disclose the prices for the acquisitions in coming months. Chelsey Dulaney contributed to this article. Write to Laura Stevens at Credit: By Laura Stevens
Subject: Financial performance; Electronic commerce
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: FedEx Corp; NAICS: 484110, 492110, 551114
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636753192
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636753192?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Drives Decline in U.S. Inflation; November CPI Down 0.3%; Sign Inflation Heading Lower on Sliding Oil Prices
Author: Mitchell, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
The Fed's preferred inflation measure, the Commerce Department's price index for personal consumption expenditures, showed overall prices up 1.4% in October from a year earlier and core prices up 1.6%.
Full text: WASHINGTON--U.S. consumer prices fell in November at the steepest rate in almost six years, a sign inflation is heading lower due to . The consumer-price index, which measures what Americans pay for everything from rent to haircuts, fell a seasonally adjusted 0.3% from October, the Wednesday. That marked the biggest one-month drop since December 2008, when the U.S. was in recession. Prices outside of oil rose modestly, suggesting that underlying inflation is tame. Excluding food and energy costs, so-called core prices rose 0.1%. Overall prices have risen 1.3% over the past year and core prices have climbed 1.7%. Economists view the drop in oil prices as generally good for the U.S. economy, since it has freed up money for consumers to buy other goods and services. But Federal Reserve officials, who are set to wrap up a two-day policy meeting Wednesday, are closely tracking the figures to ensure inflation doesn't fall too far below its target for price stability. "Cheaper gasoline has been a positive for consumers and, if sustained, should fuel stronger household spending and support growth in the U.S.," Jim Baird, chief investment officer of Plante Moran Financial Advisors, said in a note to clients. "However, it may also serve as a cautionary note for the health of the global economy." The Fed targets annual inflation at 2% as a sign of healthy economic growth and stable prices. It prefers a separate measure by the Commerce Department, which also shows inflation remaining below that target. The Fed is debating when to raise short-term interest rates, which have been near zero since the recession in an effort to stimulate growth. Many market participants expect the Fed to make the move in mid-2015, reflecting stronger economic growth and a surge in hiring this year. Some economists said the latest inflation figures, on their own, won't likely alter the Fed's timetable for raising rates, since the drop in prices is expected to be temporary. "Given that the decline in headline inflation will last for only a year, the Fed will instead place more emphasis on the potential rise in core inflation linked to the stronger economy," Paul Dales, senior U.S. economist for Capital Economics, said in a note to clients. The latest weak inflation readings have been expected. Oil prices have fallen more than 40% since mid-June as global supplies have piled up amid a production boom and weakening demand overseas. Many economists expect oil prices to continue to fall and drag overall inflation in the U.S. down to as low as 1% next year. Wednesday's report showed the energy index fell 3.8% last month from October, the sharpest decline since late 2008. Other consumer prices were mixed. Food prices rose 0.2% in November from October. Shelter costs rose 0.3%, with rent climbing at the same pace. Medical-care prices rose 0.4%, the largest increase since August 2013. The Fed's preferred inflation measure, the Commerce Department's price index for personal consumption expenditures, showed overall prices up 1.4% in October from a year earlier and core prices up 1.6%. Most economists view the fall in oil prices as benefiting the U.S. economy, which relies heavily on consumer spending to drive growth. Falling gasoline prices have freed up billions of dollars for consumers to spend on other items. Spending on other goods and services tends to give a greater boost to the U.S. economy than spending on gasoline. A separate report Wednesday showed Americans' wages are picking up as the labor market strengthens. Americans' real average weekly earnings rose 0.9% in November from the prior month. That reflected a 0.6% rise in inflation-adjusted hourly earnings and a 0.3% increase in the average workweek. Write to Josh Mitchell at Credit: By Josh Mitchell
Subject: Inflation; Economic conditions; Recessions; Consumer Price Index; Gasoline prices; Economists
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636780173
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636780173?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Penn West Cuts 2015 Capex Plan; Canadian Energy Company Slashes Its Dividend in Response to Slump in Oil Prices
Author: King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Penn West Petroleum Ltd. joined a host of other energy companies in scaling back planned spending for 2015 and slashed its dividend in response to the slump in oil prices.
Full text: Penn West Petroleum Ltd. joined a host of other energy companies in scaling back planned spending for 2015 and slashed its dividend in response to the slump in oil prices. The Calgary, Alberta-based company said Wednesday that its capital spending budget for next year is now 625 million Canadian dollars ($537 million), down from the C$840 million budget it announced just last month. The company said its quarterly dividend payout will shrink to 3 Canadian cents a share from 14 Canadian cents starting with the dividend payable in April 2015. "Penn West's business model assumes a conservative long run-term commodity price; however, the recent downturn falls outside our lowest probabilistic expectations. We have assured our investors that our business is strong and that we would reduce capital rather than seeking to increase production into a declining commodity cycle," Penn West Chief Executive Dave Roberts said in a statement. The move comes on the same day that its larger peer, Husky Energy Inc., about 33%. Husky left its dividend intact. Also on Wednesday, Bonavista Energy Corp. announced a reduction in its 2015 capital budget to a range of between C$375 million and C$425 million, and slashed its monthly dividend in half to 3.5 Canadian cents a share. Whitecap Resources Inc. cut its capital-spending plans for next year by 32% to C$245 million. Last week, major oil producer Cenovus Energy Inc. by about 15%. Canadian Oil Sands Ltd. also plans to slash spending and announced a steep dividend cut. Penn West said its targeted production for next year is 90,000 to 100,00 barrels of oil equivalent a day, down about 5% from this year. It said it still expects production growth in 2016. Write to Carolyn King at Credit: By Carolyn King
Subject: Petroleum industry; Budgets; Capital expenditures
Location: Calgary Alberta Canada
Company / organization: Name: Canadian Oil Sands Ltd; NAICS: 211111; Name: Cenovus Energy Inc; NAICS: 211111; Name: Bonavista Energy Corp; NAICS: 211111; Name: Husky Energy Inc; NAICS: 213111; Name: Penn West Petroleum Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636832151
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636832151?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nigeria's Currency at Record Low; Tumbling Oil Prices Weigh on the Naira Despite Central Bank Efforts to Buoy Currency
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
Even though Nigeria's government has recently striven to diversify the country's economy--which in April surpassed South Africa's to become the continent's largest--beyond commodities, oil and natural gas still account for around 96% of export revenue and about 80% of government revenue, according to the International Monetary Fund.
Full text: Nigeria's currency slumped to an all-time low against the U.S. dollar Wednesday, pummeled by the tumbling price of oil, rendering the central bank's to stem the decline ineffective. The dollar rose as high as 187 naira in early afternoon, eclipsing a previous record of 186.90 set on Dec. 2. That brings the buck's year-to-date climb against the naira to 16.8% and its appreciation so far in December to 4.7%. Even though Nigeria's government has recently striven to diversify the country's economy--which in April surpassed South Africa's to become the continent's largest--beyond commodities, oil and natural gas still account for around 96% of export revenue and about 80% of government revenue, according to the International Monetary Fund. On Wednesday, Nigeria's Finance Minister Ngozi Okonjo-Iweala told reporters she would not reduce the government's benchmark for its 2015 budget, which assumes crude will trade at $65 per barrel. Instead, she said, the country would raise taxes on luxury purchases like private jets, and cut foreign travel for government workers. "We are not putting any extra burden on the ordinary Nigerian," she said. "Analysts have told us that the oil price may rise to about $68 to $70 per barrel by early 2015." By midafternoon Wednesday, Brent crude was trading 1.3% lower than the previous day's price, at $59.25 per barrel, taking its decline so far this year to 46.3%. Earlier this month, Nigeria's finance ministry trimmed its budgeted Brent crude oil forecast to $65 per barrel from $73. The country's central bank has also and repeatedly intervened in currency markets by selling U.S. dollars in a bid to prop up the naira. Nigeria's main stock index fell 2.3% on Wednesday. It has tumbled almost 28% so far this year, and it is down 13.7% in December. -- Gbenga Akingbule in Abuja, Nigeria, contributed to this article Write to Josie Cox at Credit: By Josie Cox
Subject: Central banks; Energy economics; Petroleum industry
Location: Nigeria United States--US South Africa
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636861807
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636861807?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gulf Stock Markets Tumble Again on Oil, Economic Jitters
Author: Jones, Rory
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
[...]the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years.
Full text: DUBAI--Stocks in the Persian Gulf slumped again on Sunday, mirroring a similarly sharp selloff last week and all but wiping out year-to-date gains for some of the world's best performing equity markets this year. again spooked investors in Dubai where the DFM General Index finished down 7.6%, extending Thursday's 7.4% rout. The gauge is now down 1.4% for 2014, after doubling in value last year. The market rout extended across the region. The main index in Abu Dhabi dropped 3.6% on Sunday, Qatar slid 5.9% and Kuwait fell 2.9%. Saudi Arabia's market, the largest bourse in the region, retreated 3.3%. Real-estate developers were particularly hard hit on Sunday. Emaar Properties, the region's biggest developer, fell 8% and Abu Dhabi's Aldar Properties fell nearly 10%. Dubai Parks and Resorts listed on the Dubai Financial Market on Wednesday and has since fallen 25% in three days of trading. Saudi Basic Industries Corporation, or SABIC, one of the world's biggest petrochemical firms, lost 1.3%. The Organization of the Petroleum Exporting Countries--of which Saudi Arabia is the de facto leader-- not to cut current crude output levels and maintain a glut of supply in the market. Saudi oil minister Ali al-Naimi last week reiterated that the oil producer wouldn't cut production despite the falling price of crude. As a result, the benchmark U.S. oil price tumbled below $60 a barrel for the first time in five years. Adding to the bearish mood, the International Energy Agency cut its forecast for oil demand growth in 2015. "Unless there is a positive catalyst for an increase in the oil price the market may continue to stay weak during the coming week," Dubai-based Al Masah Capital said in a note. "The severity of this decline could very well be explained by investors covering margin calls as leverage was used on the way up over the past year," it added. Capital Economics said while oil's slump has caused anxiety among stock market investors, large foreign exchange reserves built up over the years means public spending by regional governments should continue. "While we expect growth to soften in 2015-16, we don't think it will collapse," the consultancy firm said in a note to clients. Corrections & Amplifications The DFM General Index is now down 1.4% for 2014. An earlier version of this article said the gauge was down that much for 2015. Write to Rory Jones at Credit: By Rory Jones
Subject: Petroleum industry; Stock exchanges; Investments; Crude oil prices
Location: Qatar Kuwait Abu Dhabi United Arab Emirates Saudi Arabia Persian Gulf
Company / organization: Name: Aldar Properties; NAICS: 236220; Name: Emaar Properties; NAICS: 237210; Name: Dubai Financial Market; NAICS: 523210; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636919417
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1636919417?acco untid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
ICE Activated Circuit Breaker on Brent Crude Oil Contract; Broker Saw Flash Warning on Price Screen That Went on for Five Seconds
Author: Kantchev, Georgi; Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
LONDON--A sudden surge in oil prices in late London trade Wednesday led to a very brief suspension of trading on the global benchmark futures contract.
Full text: LONDON--A sudden surge in oil prices in late London trade Wednesday led to a very brief suspension of trading on the global benchmark futures contract. The Intercontinental Exchange activated a circuit-breaker at 11:56 EST for the Brent crude oil contract that paused certain trades for five seconds, a spokeswoman for ICE said. The price limits, introduced in April 2012, stop some transactions when the market moves above a certain limit within a short time span. The limit for ICE Brent futures is $1.25 above or below the anchor price, which is recalculated every three seconds, with a hold period of five seconds for trades that breach the limits. Christopher Bellew, a broker at Jefferies Bache Ltd in London, said he saw a flash warning on his ICE screen that was too quick to read but that went on for about five seconds. He called ICE, and an operator told him a circuit-breaker had been used at the price of $63.30 per barrel. Brent crude surged more than 5% to above $63 per barrel at the time when the circuit breaker was activated. "The ICE put an automatic break at some point above $63--something I have never seen before," said Mr. Bellew. As the oil market continues to lurch, trading volumes have hit record levels. ICE said a total of 151,354 Brent crude options were traded Tuesday, nearly 19% higher than the previous record of 127,237 lots set on Sept. 26, 2012. Write to Georgi Kantchev at and Nicole Friedman at Credit: By Georgi Kantchev And Nicole Friedman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1636954688
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Marathon Oil to Cut Capital Spending in 2015; Latest Energy Company to Cut Spending Amid Tumbling Oil Prices
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract: None available.
Full text: Marathon Oil Corp. plans to cut spending in 2015, the latest energy company to slim its spending plans amid tumbling oil prices. The Houston energy producer said it plans to spend $4.3 billion to $4.5 billion in capital projects, or about 20% less than in the current year, excluding its Norwegian business, which it sold in June for more than $2 billion amid a shift to focus operations on the U.S. Still, Marathon expects production to rise in the high-single digits, excluding its Libya operations. Last week, ConocoPhillips said italso by 20% to $13.5 billion. Marathon's shares closed at $26.67 on Wednesday, down 24% for the year. Write to Maria Armental at Credit: By Maria Armental
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637240061
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Oil Producers Pare Spending Plans as Prices Drop; Husky Energy, Penn West Petroleum, Others to Make Cuts
Author: George-Cosh, David; King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
A host of Canadian oil producers said Wednesday that they were paring capital spending plans as an uncertain outlook caused by lower oil prices rocks the industry.
Full text: A host of Canadian oil producers said Wednesday that they were paring capital spending plans as an uncertain outlook caused by lower oil prices rocks the industry. Husky Energy Inc. and Penn West Petroleum Ltd. were among the Calgary-based companies that said they would reduce capital investment next year following the dramatic plunge in oil prices in recent weeks. Surging oil production in North America, coupled with a decline in global demand, has led many energy producers to rethink their investment plans for the coming year. since June. Prices for light, sweet crude closed up 54 cents, or about 1%, at $56.47 a barrel on the New York Mercantile Exchange on Wednesday. 33% to 3.4 billion Canadian dollars ($2.9 billion) in 2015. It also projected total 2015 production of between 325,000 and 355,000 barrels of oil equivalent a day, compared with the 341,000 barrels a day it expects to produce this year. Meanwhile, for next year is now 625 million Canadian dollars ($537 million), down from the C$840 million budget it announced just last month. In addition to scaling back its capital-spending plans, Penn West also slashed its dividend to 3 Canadian cents a share from 14 Canadian cents starting with the dividend payable in April 2015. Husky Energy left its dividend intact. Also on Wednesday, Bonavista Energy Corp. announced a reduction in its 2015 capital budget to a range of between C$375 million and C$425 million, and slashed its monthly dividend in half to 3.5 Canadian cents a share. Whitecap Resources Inc. cut its capital-spending plans for next year by 32% to C$245 million. MEG Energy Corp. also cut its capital program to C$305 million from previous guidance of C$1.2 billion. The capital-spending cuts were welcomed by skittish investors, who bid up shares of Husky Energy by 10.4% and Penn West by 7.8% in trading Wednesday on the Toronto Stock Exchange, according to data provider FactSet. Additionally, Bonavista was up 8.6%, Whitecap Resources rose 9.4% and MEG Energy gained 10.7%. Last week, oil producer Cenovus Energy Inc. lowered its 2015 capital-spending budget by about 15% and guided for a 29% drop in cash flow. Canadian Oil Sands Ltd. also plans to slash spending and recently announced a steep dividend cut. Write to David George-Cosh at and Carolyn King at Credit: By David George-Cosh And Carolyn King
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637241858
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Consumers See Little Trickle-Down From Cheaper Oil; Governments Seize Opportunity to Line Coffers, Unwind Fuel Subsidies
Author: Wright, Tom; Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Dec 2014: n/a.
Abstract:
[...]lower crude prices aren't filtering through into cheaper gasoline at the pump to the same extent as in the U.S. While drivers in New York City have seen prices of regular gasoline decline 26% since the end of July, in Beijing government-regulated gasoline prices have fallen about 17% during roughly the same period. The U.S. Energy Information Administration says China has overtaken the U.S. as the world's top net importer of petroleum, and projects that Chinese imports of foreign oil will continue to rise as slow domestic production growth can't keep pace with demand.
Full text: The economic boost from falling global oil prices is being blunted in Asia as governments in the region use the decline to boost state coffers instead of passing savings on to consumers through cheaper gasoline. Asia is the world's largest importer of crude oil. For years, as global oil prices rose, countries in the region shielded consumers and businesses through a complex and costly web of fuel subsidies. Now that oil prices are falling, many governments are using the moment to unwind these subsidies. Indonesia, Malaysia and India have taken steps in recent weeks to raise government-set fuel prices. China's government increased fuel-consumption taxes twice in the past month, the first rises since 2009. As a result, lower crude prices aren't filtering through into cheaper gasoline at the pump to the same extent as in the U.S. While drivers in New York City have seen prices of regular gasoline decline 26% since the end of July, in Beijing government-regulated gasoline prices have fallen about 17% during roughly the same period. In Malaysia and Indonesia, some fuel costs have risen. Prices at the pump could fall more if crude oil stays in a slump, economists say. But Asia's highly-regulated market for fuel is damping benefits to consumers. "In Asia, because oil prices do not show through at the pump as quickly, consumers aren't reacting as quickly," said Frederic Neumann, an economist with HSBC in Hong Kong. While consumer confidence is picking up in the U.S., in line with cheaper crude, the mood in Asia remains subdued. China's retail sales picked up in November but growth is still much weaker than in recent years. Liu Zheng, a 48-year-old driver at a car-rental company in Beijing, says he had hoped lower oil prices would bring cheaper gasoline, and says drivers like him have been squeezed by rising costs in recent years. "The government shouldn't have raised taxes, which only increase burdens on ordinary people," said Mr. Liu. In other parts of Asia, consumer confidence is fragile and spending has remained weak over the past 18 months. Indonesian car sales plunged 13% in November on the previous month, in part due to fuel-price increases. Vehicle sales also have fallen in India. Asian economies and consumers should still benefit overall from cheaper crude. Lower oil costs are keeping inflation in check by reducing costs for businesses. Tepid prices have permitted China and South Korea to cut interest rates in recent weeks to help sluggish economies. J.P. Morgan Chase bankers say low crude prices make it unlikely that central banks in emerging markets, except Russia and Brazil, will raise rates in the next six months and this environment should help boost consumer spending. Standard & Poor's Ratings Services estimates the Philippines, Hong Kong, China and Thailand--the economies with the largest dependency on oil imports--could see a boost of a third of a percentage point to their economic-growth rates if oil remains at $65 a barrel through next year, largely through greater consumer spending and business investment. But there is also a risk that Asian governments opt to save rather than spend the bulk of those gains, reducing the economic bump from low oil prices at a time when growth in the region already is slowing due to China's decelerating economy and lackluster demand in the West. In the U.S., fuel prices are deregulated and feed through to the pump more quickly. William Dudley, the president of the Federal Reserve Bank of New York, said in a speech this month the U.S. economy will get a big lift. Poorer households in the U.S. put a higher portion of their income toward energy costs, he argued. As gasoline prices fall, they are spending these savings, helping underpin growth. Critics of fuel subsidies in Asia argue that it is largely wealthier households that own cars, and the money would be better spent on other projects, such as improving public health, education and infrastructure. Indonesia has long had some of the lowest fuel prices in the region, supported by costly subsidies. President Joko Widodo, who took office in October, moved swiftly to raise fuel prices by a third and has vowed to fix the nation's decrepit roads and ports, a key to attracting more foreign investment. While many investors welcomed the shifting of resources, many Indonesians, including millions of poorer people who rely on motorbikes and buses for transport, are used to years of cheap gasoline. Street protests against the increases broke out in some cities last month. What's more, the nation's central bank raised interest rates in November to guard against inflation following the fuel increase. Paul Gruenwald, chief Asia economist at Standard & Poor's, said allowing fuel prices to rise closer to market levels is "not necessarily a bad thing" if governments use the savings to channel money to infrastructure spending or to pay down high levels of debt. In China, where retail gasoline prices are fixed by the government based on changes in international crude prices, the government's fuel-consumption taxes are part of a broader plan to reduce traffic congestion in big cities and battle pollution. Further tax increases could follow if global oil prices remain low, economists say. Academics at the University of California, Davis, said in a recent paper that the optimal gasoline tax for China to control congestion and vehicle emissions was the equivalent of $1.58 a gallon, around double the current level after the recent increases. U.S. drivers by comparison pay about 18 cents a gallon in federal tax. Growth in auto sales in China to their lowest level in almost two years, as the modest decline in gasoline prices has failed to offset effects of slowing growth. China relies on foreign oil for more than half its consumption, making it susceptible to volatility in global oil markets. The U.S. Energy Information Administration says China has overtaken the U.S. as the world's top net importer of petroleum, and projects that Chinese imports of foreign oil will continue to rise as slow domestic production growth can't keep pace with demand. Kersten Zhang in Beijing contributed to this article. Write to Tom Wright at and Brian Spegele at Credit: Tom Wright, Brian Spegele
Location: Asia China
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 17, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637443182
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canadian PM Says Country Will Get Crude Oil to Markets Other Than U.S. Stephen Harper Says Marketplace Will Decide the Fate of Pipeline Projects
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
In an interview with the Canadian Broadcasting Corp., Mr. Harper said planned pipelines such as Enbridge Inc.'s Northern Gateway, Kinder Morgan Inc.'s expansion of its Trans Mountain corridor and TransCanada Corp.'s Energy East must obtain approval from regulators before they can proceed.
Full text: OTTAWA--Canada will get its landlocked crude oil to foreign markets other than the U.S., although the marketplace will ultimately decide the fate of pipeline projects to run through the country, Prime Minister Stephen Harper said Wednesday. In an interview with the Canadian Broadcasting Corp., Mr. Harper said planned pipelines such as Enbridge Inc.'s Northern Gateway, Kinder Morgan Inc.'s expansion of its Trans Mountain corridor and TransCanada Corp.'s Energy East must obtain approval from regulators before they can proceed. Once approval is granted, "I think it's ultimately up to the marketplace" whether the projects proceed, he said. "There's the market process and there's a scientific evaluation process, and those are directed by others" and not the government. Regardless, Mr. Harper said it is "inevitable" crude will get to new markets other than the U.S., based on the demand abroad for energy. Mr. Harper's government has championed industry moves to increase exports of Canadian crude, but several projects have been delayed amid a debate over the routes the pipelines will take and worries, expressed by Native Americans and environmentalists, about the potential for spills. The ruling Conservatives have also argued that finding new markets is crucial for the Canadian economic outlook as the U.S. steps up energy production. The bulk of Canada's crude exports are destined for the U.S. The lack of pipeline infrastructure is one reason crude produced in western Canada fetches a discount per barrel compared with international benchmarks, such as West Texas Intermediate. As for the Keystone XL pipeline, Mr. Harper said Canada has "won the argument of public opinion across the board in the U.S." on the project. He said the debate about the project is no longer between Canada and the U.S., but between President Barack Obama and the American people. He reiterated the logic justifying Keystone is "overwhelming" and believes the project "will be approved eventually." Incoming U.S. Senate Majority Leader Mitch McConnell (R., Ky.) said Keystone will be the first item on the upper chamber's agenda when it convenes next year. Earlier in the week, Mr. Harper--who will seek a fourth straight mandate in an election next year--said , even though the swoon in oil prices will weigh on government tax revenue and limit the fiscal flexibility he has to offer new tax-relief measures or pledge new spending. In the interview, he said the nearly 50% slide in crude prices "will have some important effects both on the industry and on the country," but added he remained optimistic because "everywhere I go, elsewhere in the world, people want Canadian energy." Write to Paul Vieira at Credit: By Paul Vieira
Location: United States--US Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637246964
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mitsui CEO: U.S., Saudis Pushing Oil Prices Lower; Countries Working Together to Hurt Islamic State and Russia, Masami Iijima Says
Author: Landers, Peter; Iwata, Mari
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
Chinese demand will rise strongly because the nation is trying to trim coal use and carbon-dioxide emissions, Mr. Iijima said, adding that he believed a new would be costly and leave room for liquefied natural gas to be shipped by boat to China.
Full text: TOKYO--The head of Mitsui & Co., a big energy investor, said he thinks the U.S. and Saudi Arabia are working together to keep oil prices down in an effort to hurt Islamic State and Russia. Masami Iijima, chief executive of the Japanese trading company, spoke in an interview as crude oil was trading near its lowest level since May 2009. He said the recent decision by the Saudi-led Organization of the Petroleum Exporting Countries to keep production at current levels, which triggered the oil-price plunge, would particularly hurt Islamic State, the militant group that has seized parts of Iraq and Syria, including some oil fields. "They've been selling oil to a certain extent at a discount, and the advantage of that discount has now completely disappeared" because , he said in an exclusive interview with The Wall Street Journal. "It has the effect of cutting off Islamic State's source of funds." Mr. Iijima said of the fall in oil prices: "I have a feeling that Saudi Arabia and the U.S. are moving ahead with this as part of substantial mutual discussions." Representatives of the U.S. and Saudi embassies in Tokyo didn't immediately respond to requests for comment. Saudi officials have said they base their decisions on economics, not politics. Saudi Arabia and the U.S. are allies in working to stop Islamic State's spread, while the U.S. has led the effort to impose sanctions on Russia, a major oil producer, over its aggressive actions in Ukraine. Growing U.S. energy independence is helping feed Washington's harder line on Moscow, Mr. Iijima said. "The way the U.S. is beating on Russia is amazing," he said. "It's no problem for them if they don't get any energy from Russia." However, he expressed concern that a crisis in Russia could hurt Europe and spread to the global economy. Mitsui gets about half its profit from energy investments and holds a stake in the oil-and gas-producing Eagle Ford shale in Texas. It is Japan's second-largest trading company after Mitsubishi Corp. and expects net profit of 380 billion yen ($3.2 billion) in the year ending March 2015. Mr. Iijima said the company was taking a hit from the fall in oil prices but Eagle Ford was still profitable. "Everyone thinks of shale as high-cost, but it isn't so," he said. The CEO was bullish on the global natural-gas business, saying he expects annual global demand to rise to 560 million tons by 2030 from 240 million tons presently. "The superior position of gas won't change," he said. Chinese demand will rise strongly because the nation is trying to trim coal use and carbon-dioxide emissions, Mr. Iijima said, adding that he believed a new would be costly and leave room for liquefied natural gas to be shipped by boat to China. Others are more cautious. Hisao Sato, general manager of the gas business at Japanese refiner Idemitsu Kosan Co., said many natural-gas projects globally are in limbo because of uncertainty about Chinese demand, while Japan's demand may fall if . Write to Peter Landers at and Mari Iwata at Credit: By Peter Landers And Mari Iwata
Location: United States--US Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637314668
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Resume Slide; Futures Had Rallied Earlier After Comments by Saudi Arabia's Oil Minister
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
[...]he went on to say that the Organization of the Petroleum Exporting Countries would maintain output levels in a bid to retain its market share, prompting oil traders to cash out of the early gains in both contracts.
Full text: Oil prices resumed their monthslong slide Thursday amid bearish comments from Russia and OPEC leaders and reports that a Nigerian dockworker strike was lifted, raising the possibility of more crude in a global market already brimming with supplies. The decline arrested two straight sessions of gains for crude prices and brought the benchmark contracts to new five-year lows, as analysts said there was little reason for the market to stabilize given limited change to the bearish supply-demand picture that has cut prices nearly in half since June. The market rallied early Thursday in reaction to part of the comments made by Saudi Arabia's oil minister but gave back those gains as it became clear that he and others maintained the same dour outlook. The slide deepened within the last hour of trading, repeating a volatile pattern of recent sessions in which early gains have been whittled away over the course of the day. The benchmark U.S. oil futures contract ended down $2.36, or 4.2%, at $54.11 a barrel on the New York Mercantile Exchange. The global Brent crude contract ended down $1.91, or 3.1%, at $59.27 a barrel. Both contracts ended at the lowest price since May 2009. "These rallies are just bounces, but we're still in a downtrend and we're really not getting any encouraging news from anywhere," said Andrew Lebow, a broker at investment bank Jefferies. Thursday's early rally was kicked off after Saudi Arabia's oil minister, Ali al-Naimi, characterized the recent price rout as "temporary" in published comments and said crude demand would recover as the global economy improves. But he went on to say that the Organization of the Petroleum Exporting Countries would maintain output levels in a bid to retain its market share, prompting oil traders to cash out of the early gains in both contracts. The energy minister of the United Arab Emirates also defended OPEC's inaction, saying the cartel wasn't responsible for the growing surplus of oil on world markets. The comment was interpreted by analysts as a shot at the U.S., which is producing more than 9.4 million barrels of oil a day and exporting more than a third of that in the form of refined products such as gasoline and diesel. And in a news conference, Russian President Vladimir Putin said the country's to handle low oil prices that could last as long as two years in a worst-case scenario, even if prices fell as low as $40 a barrel. Meanwhile, dockworkers in Nigeria suspended a strike and allowed port activities to resume. Analysts said the market took that as a signal of renewed oil exports there. Nigeria is the largest oil producer in Africa, exporting 2.2 million barrels a day. Indeed, several analysts said the bearish fundamental conditions of massive production and shrinking demand remain in place and are expected to continue in the first half of 2015. "We continue to see further downside risk for Brent as the oversupply in the global market continues to grow," said Macquarie Bank strategist Vikas Dwivedi in a note to clients. Global energy companies have scrambled to adjust in the face of an uncertain outlook. Chevron Corp. became the latest big name to scale back, telling Canadian regulators Wednesday that it has "indefinitely" suspended plans to drill for oil in the Arctic. Other companies, including Marathon Oil, Husky Energy and Penn West Petroleum, have pared their capital-spending plans in recent days. Gasoline and diesel futures also ended at new lows. January diesel was down 6.98 cents, or 3.5%, at $1.9387 a gallon, the lowest closing price since August 2010 on the Nymex. Gasoline for January delivery ended down 3.9 cents, or 2.5%, at $1.5272 a gallon, the lowest since May 2009. U.S. drivers are seeing the effects of lower gasoline prices at the pump. AAA said average U.S. retail gasoline prices on Thursday fell below $2.50 a gallon for the first time in more than five years, to $2.48 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637377040
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637377040?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Junk Debt Dipped Into Red --- Decline in Lower-Rated Bonds Is Largest U.S. Casualty of Oil Market Collapse
Author: Burne, Katy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Dec 2014: C.4.
Abstract:
[...]some investors are now scouring the rubble of the junk market for bargains, reasoning that much of the selling may be overdone and that the actual damage from the oil-price plunge is likely concentrated in energy companies' securities, which already have been hammered.
Full text: The junk-bond boom has emerged as the biggest U.S. casualty of the oil bust, as a selloff in the debt of low-rated companies has punished investors who had flocked to higher yielding but riskier debt. Total returns on a popular high-yield bond index tracked by Barclays PLC fell into the red Tuesday for the first time since 2011. Junk bonds rallied Wednesday, likely taking the index back above water. The shifts have deepened a slump that began at midyear when oil prices were still above $100 a barrel. The average price on junk bonds is 96.4 cents on the dollar, down from full face value as recently as Dec. 4 and from 103 cents in September. The declines have reversed a long period of junk-bond appreciation and threaten to crimp some borrowers' access to cash for expansion. The pullback is being widely scrutinized by analysts and portfolio managers who are on the lookout for any cracks in a five-year-long bull market in U.S. stocks. So far, the signs are few and far between: The Dow Jones Industrial Average rose 288 points Wednesday to 17357 after the Federal Reserve reiterated its intent to be patient in raising short-term interest rates. Indeed, some investors are now scouring the rubble of the junk market for bargains, reasoning that much of the selling may be overdone and that the actual damage from the oil-price plunge is likely concentrated in energy companies' securities, which already have been hammered. "I'm not worried about my Checkers [Drive-In Restaurants Inc.] bonds" just because oil is down, said David Sherman, head of high-yield mutual funds at manager Cohanzick Management LLC. "I think high yield is reasonable value." Mr. Sherman said he has reduced his fund's exposure to the energy sector but that the prices in the market are "starting to get interesting" enough to tempt him to buy again. Still, the junk-bond swings highlight the risks buyers have embraced this year in a bid to generate scarce investment income. The risk hasn't paid off, as Barclay's U.S. Corporate High Yield index lost 0.3% this year through Tuesday's close. That lags behind a 8.85% gain in the S&P 500, a 7.29% rise in investment-grade corporate debt, a 6% increase in the Barclays U.S. Aggregate bond index and a 5.45% rally in safe U.S. Treasurys. To be sure, junk hasn't been the worst investment. The Russian ruble has lost nearly half its value against the dollar this year, and crude futures have dropped more than 40%. Emerging market stocks as measured by the MSCI Emerging Markets Index are down 8%, and U.S. small-cap stocks as measured by the Russell 2000 are up just 1% this year. Still, this week marks the first time the market has turned negative since 2011, a year in which junk sold off during the eurozone crisis before rallying to end the year up 4.98%. The last time junk bonds finished the year in negative territory was in 2008, when they lost 26% amid a broad flight from risk in the financial crisis. Strong junk-market gains in past years have enabled low-rated issuers to raise more than a trillion dollars in the U.S. since the financial crisis, including a record $361 billion of issuance in 2013. Some investors have been scouting for select high-yield bonds that others have jettisoned with the oil-price slump. Energy borrowings constitute 14% of the junk-bond market, according to Barclays' data, up from 5% in 2007. "What surprised me in the last few weeks is many large asset managers were underweight high yield energy and so they are in a better position to step in here once thing start to stabilize," said Mark Pibl, head of high yield strategy at Canaccord Genuity Inc., a broker dealer. J.P. Morgan Chase & Co. said that the recent declines are the most severe since the Russian default crisis in 1998, excluding brief periods around the 2001 terror attacks and the 2008 crisis. Over $200 billion of high yield bonds are now trading below 90 cents on the dollar, versus $57 billion as of January. The premium investors can earn for holding junk bonds has risen to 5.52 percentage points above supersafe Treasurys, the largest so-called spread over Treasurys since late 2012.
Credit: By Katy Burne
Subject: High yield investments; Stock exchanges; American dollar; Economic crisis; Corporate debt; Dow Jones averages; Energy industry; Junk bonds; Petroleum industry
Location: United States--US
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 18, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637390973
Document URL: https://login.ezproxy.uta.edu/login?url=ht tps://search.proquest.com/docview/1637390973?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
German Business More Bullish as Euro Weakens, Oil Price Falls; Ifo Institute's Lead Indicator Rises in December
Author: Buell, Todd
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
"Dropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy," said Ifo President Hans-Werner Sinn in a press release.
Full text: German business confidence improved for the second consecutive month, a key indicator showed Thursday, as the eurozone's largest economy benefits from lower oil prices and a weaker euro. The Munich-based Ifo institute's lead indicator rose to 105.5 in December from 104.7 the previous month. The December result matched the prediction of economists in a Dow Jones Newswires survey. "Dropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy," said Ifo President Hans-Werner Sinn in a press release. The data follow other upbeat news for Europe's largest economy. Earlier this week a separate indicator of strongly outperformed analysts' forecasts. The ZEW index rose to 34.9 in December versus 11.5 in the previous month. Write to Todd Buell at todd.buell@wsj.com Credit: By Todd Buell
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637437201
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637437201?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Putin's Year of Defiance and Miscalculation; Kremlin Misjudged Bite of Sanctions, Then Oil Plunged
Author: White, Gregory L; Troianovski, Anton
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract: None available.
Full text: As Western governments seethed last spring over Russia's takeover of the Crimea region in Ukraine, Vladimir Putin told advisers that the world eventually would accept the audacious move. The Kremlin was confident the economic costs of Western sanctions, though substantial, would be tolerable for the world's ninth-largest economy. For much of the year, the Russian president's gamble seemed to pay off. "His forecasts have come true," Alexei Kudrin, a former finance minister and longtime Putin adviser, said in May. "A lot of people have come to terms with Crimea now, at least informally." Mr. Putin also seemed confident, according to people who spoke to him at the time, that the deep ties he had nurtured for years with major trade partners like Germany would limit the fallout. (Update: ). Those calculations turned out to be dead wrong. Broader sanctions choked off Russia's access to Western capital and technology, tipping the economy toward recession. Then came a second blow that neither Western governments nor Russia could have anticipated: The price of oil--the lifeblood of Russia's economy--plunged 40% since midsummer, magnifying the effect of sanctions and sending the ruble into a tailspin. The slide turned into a full-on currency crisis on Tuesday as the ruble dropped as much as 20% against the dollar. As the problems intensify, Mr. Putin's miscalculations have restricted his options. After largely ignoring the economic costs of the conflict for most of the year, freezing out liberal aides who tried to warn of the impact, he has begun trying recently to win back the confidence of business and revive the economy, people close to the process say. Mr. Putin is expected to be questioned about the ruble crisis during his annual news conference on Thursday. The Ukraine conflict has produced the deepest breach between Moscow and the West since the Cold War. A notable casualty has been Mr. Putin's relationship with Angela Merkel, who emerged as Europe's most powerful leader in large part because of Germany's relative economic strength. As recently as a year ago, the German chancellor was one of Mr. Putin's most reliable Western partners, offsetting more anti-Moscow voices such as the U.S. and Poland. Now, she is keeping the rest of Europe in line behind sanctions and warning of the danger she says Mr. Putin poses to security across the continent. "We are suddenly confronted with a conflict that goes, so to speak, to the core of our values," Ms. Merkel said in Sydney, Australia, in November. "Old thinking in terms of spheres of influence, in which international law is trampled upon, cannot be allowed to assert itself." Mr. Putin's rhetoric on Ukraine seems to have softened in recent weeks as state-run pollsters in Russia report growing alarm over the falling ruble and rising prices. "Whenever they start to feel danger in their bones--we saw it in [the financial crisis of] 2008--they start looking for the liberals to help," a senior Russian legislator said of the hard-liners in Mr. Putin's inner circle. The Kremlin declined to comment for this article. With Mr. Putin's government warning that significant relief from sanctions could be more than a year away, there is little chance of avoiding surging inflation and further declines in the ruble. This week's currency crisis has increased the urgency, making a steep recession next year all but inevitable. The Kremlin appears to have written off hope of rapprochement with the Obama administration, which has pressed the European Union to back strong sanctions. And patching things up with Ms. Merkel doesn't look any easier. "Russia has become unpredictable, which is the biggest threat to partnership," said Gernot Erler, the German government's coordinator for Eastern European affairs. "We don't know at all what Russia's goals are." A year ago, it looked as though German relations with Moscow were warming. The revelations of National Security Agency leaker Edward Snowden helped turn public opinion against Washington in privacy-sensitive Germany. Last December, Ms. Merkel formed a new government with the Social Democrats, historically a party friendly to Russia. Foreign Minister Frank-Walter Steinmeier said the EU may have underestimated Ukraine's economic and "historic emotional" ties to Russia. Russia annexed the Crimea Peninsula in March. In the early weeks of the crisis, Ms. Merkel remained cautious about tough sanctions, fearing they might prevent a way out for Moscow. The first round of sanctions mainly affected officials and businessmen with ties to Mr. Putin. Opening a meeting with aides after they were announced, Mr. Putin didn't even mention the possible economic impact, calling instead for faster growth. But after state-television cameras were ushered out, officials expressed concern. Mr. Kudrin, the former finance minister and longtime Putin ally who attended, said that even if the sanctions were limited just to individuals, they still would hit growth hard. Wider sanctions on state banks--they would come in the summer--would be much more painful, he warned, fueling capital flight, sapping investment and bruising the ruble. At the time, the government was expecting the economy to grow and inflation to remain under control. Mr. Kudrin estimated at the time that the Ukraine crisis cut about one percentage point off GDP growth--about what the government spent on the Sochi Olympics. Over two to three years, the bill might rise to $200 billion--"not catastrophic," as he put it later. His warning didn't dissuade Mr. Putin and the rest of the leadership from confronting the West. "They all understood everything," Mr. Kudrin recalled later. "They're ready to pay that price." When additional sanctions came during the spring, some government officials began to recognize that the informal effect--chilling business activity--was more painful than expected. But their appeals to Mr. Putin were largely ignored, according to people close to the discussions. "There was a sense that foreign policy was the priority and that it could be conducted without doing much harm to the economy," said one Kremlin adviser. As the ground fighting in Ukraine worsened over the summer, Germany's resolve to take on the Kremlin stiffened. The U.S. had been pressing the Europeans to do so for months. Some German officials were concerned that earlier sanctions hadn't been tough enough. Ms. Merkel and Mr. Putin held lengthy, often combative phone calls, according to German officials familiar with the conversations. Western intelligence suggested Russia was supplying the separatists with weapons and appeared to be coordinating their operations. Mr. Putin said he had nothing to do with it, and told Ms. Merkel that Ukraine was the kind of place where abandoned tanks could be found on farms, according to one official familiar with the discussions. Ms. Merkel's office had the German spy agency, the BND, draw up biographies of rebel leaders, most of whom hailed from Russia. Over the phone, Ms. Merkel repeatedly confronted Mr. Putin with evidence that the rebel leaders had ties to Russian intelligence, according to German officials. Mr. Putin, who rarely raised his voice during the discussions, denied he had any influence over the rebels. At important points, he would shift from Russian--which Ms. Merkel learned growing up in Communist East Germany--to German, which Mr. Putin speaks well. German diplomats thought the downing of Malaysia Airlines Flight 17 on July 17, killing all 298 people aboard, might open a path to calming the conflict. But Mr. Putin publicly denied the rebels had shot down the plane, repeating theories broadcast by Russian television that the Ukrainians were responsible. He told Ms. Merkel over the phone that his own plane was in the air over Europe at the time and that the shootdown may have been an assassination attempt. "I could have been a victim, too," he said, according to one person knowledgeable about the call. German officials analyzed Mr. Putin's flight path and didn't buy the contention, according to one person familiar with the effort. Convinced that Mr. Putin wasn't pushing the rebels to stop fighting, Ms. Merkel corralled the other 27 European Union member states to follow the U.S. and back the first sanctions against sectors of the Russian economy. They amounted to a body blow to Russia, whose largest banks and companies depended on Western financing and technology. The Kremlin responded with sanctions of its own against food imports from the West, hitting some European farmers hard. Inside Russia, pro-market advisers who had warned about too much confrontation with the West, including Mr. Kudrin, found themselves largely frozen out, according to people close to them. Mr. Kudrin lamented publicly that he rarely was consulted by the Kremlin anymore and that business was alarmed by Moscow's anti-Western turn. A tight circle of mostly hard-line advisers, including Defense Minister Sergei Shoigu and Federal Security Service head Alexander Bortnikov, had become Mr. Putin's closest confidantes, according to Kremlin insiders and diplomats. In early September, even though pro-Russian rebels had just signed a cease-fire agreement with Ukraine, Ms. Merkel pushed for a second round of economic sanctions. Ms. Merkel and other Western leaders said Russia was doing little to carry out the terms of the cease-fire agreement, including preventing weapons and fighters from crossing the Russian border into eastern Ukraine. In early October, German Gref, chief executive of Russia's state-run Sberbank and the pro-market author of Mr. Putin's economic programs, lashed out in public at an October conference where the president was to speak. Warning that defying "the laws of economic development" would bring Russia to collapse as it did the Soviet Union, Mr. Gref ridiculed government policies for replacing sanctioned products with domestic ones. "You cannot motivate people through the Gulag, like in the Soviet Union," he said to nervous applause. Mr. Putin shrugged off the comments when asked about them later. The government still was expecting Europe to lift sanctions by the middle of 2015 and for oil prices to recover to $100 a barrel, Russian officials said at the time. Within weeks, an additional plunge in oil prices forced the Kremlin to reassess its plans. After spending $30 billion in October in an unsuccessful effort to slow the ruble's slide, the central bank announced in early November it would let the Russian currency float freely to save its reserves. Hard-line advisers in the Kremlin, including economic aide Sergei Glaziev, had called for fixing the rate and restricting access to foreign currency. But Mr. Putin rejected that advice as risking even more economic disruption. The central bank's move triggered a slide in the currency. "In late November and early December, the authorities realized there would be a crisis," said one Kremlin adviser. Just before Mr. Putin's state-of-the-nation address on Dec. 4, the Economy Ministry revised its forecast. Russia would get no relief from low oil prices or sanctions in 2015, the new forecast said, which would drive the country into recession. After other officials criticized the outlook as too gloomy, it quickly disappeared from the ministry's website. In his speech, Mr. Putin announced steps to improve the business climate. But he also warned that the Kremlin knew who the "speculators" were who were selling the ruble, which did little to reassure investors or offset market fears. Tensions exploded this week. The currency plunge left Russians racing to convert their savings out of rubles. An emergency rate hike by the central bank did little to stop the selling. Frictions surfaced between liberals and hard-liners. Mr. Kudrin took to Twitter to say the market plunge was the result not just of sanctions and low oil prices but "also a lack of confidence in the government's economic measures." He criticized a bailout deal for the state oil company, prompting the company's CEO to denounce him as a "provocateur." Amid the deepening crisis, Western diplomats have reported hints of softening in the Kremlin's position on Ukraine, though they say it is too early to declare a shift. Late Tuesday, Mr. Putin joined a conference call with Ms. Merkel, French President François Hollande and Ukrainian President Petro Poroshenko to discuss new talks to stabilize the cease-fire in eastern Ukraine. But after a year of diplomatic wrangling, German officials say they have little reason to believe the Kremlin's policies will change quickly. The Germans say that continuing to talk to the Kremlin is important for affording Mr. Putin a way out of the crisis. Some German diplomats worry that with the Russian economy deteriorating, Mr. Putin may be tempted to escalate the conflict in Ukraine to distract his countrymen from problems at home. In November, Ms. Merkel met with Mr. Putin at the Hilton hotel in Brisbane, Australia, talking and sipping wine for more than three hours as their aides waited outside the room. Ms. Merkel hoped that confronting him in a more relaxed format could lead to progress. It didn't. Just over a day later, Ms. Merkel delivered some of her angriest remarks of the crisis. "We can no longer simply hold speeches at memorial events," Ms. Merkel said, referring to the many commemorations of World War I, World War II and the Cold War held in Europe this year. "Now we have to somehow show what we have learned from all this." Alexander Kolyandr and Philip Shishkin contributed to this article. Write to Gregory L. White at and Anton Troianovski at Credit: Gregory L. White, Anton Troianovski
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637447545
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nigeria's Central Bank Restricts Currency Trading to Prop Up Naira; Economic Turmoil Aggravated by Strikes in Oil Sector and by Hospital Workers
Author: Cox, Josie; Akingbule, Gbenga
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
The bank is barring dealers from depositing their currency-trading funds overnight, preventing them from after-hours trading and placing bets for or against a single currency at the close of a trading session.
Full text: Tumbling oil prices are exacting a heavy toll on Nigeria, Africa's largest economy and one of the world's most dependent on crude. The central bank late Wednesday imposed new foreign-exchange controls aimed at stopping a 15% plunge in the naira this year. The bank is barring dealers from depositing their currency-trading funds overnight, preventing them from after-hours trading and placing bets for or against a single currency at the close of a trading session. The move is temporary, according to Olakanmi Gbadamosi, director of the central bank's trade and exchange department. Any infraction, he said, will "attract appropriate sanctions, which may include suspension from the foreign-exchange market." Africa's biggest crude exporter has proved in recent weeks. Its government, which earns 80% of revenue from oil, is heading toward a costly presidential election in February, and is also spending around $6 billion a year battling the Islamic insurgency Boko Haram, which on Tuesday kidnapped at least 191 women and children from a northeastern village. As crude prices fall, investors and economists worry the country could run out of budgetary room to finance those commitments. "There are a lot of people who are afraid," said Bismarck Rewane, managing director of advisory firm Financial Derivatives Co. in Lagos. The new central bank controls, he added, . "At this point, everything depends on the oil price," he said. The global benchmark for crude has fallen to less than $60 a barrel recently from more than $100 earlier this year. The naira's oil-fueled decline, combined with uncertainty over how Nigeria's government will scale back spending, helped stoke a series of strikes this week. Government hospital workers are protesting poor working conditions, and state radio broadcasters are on strike citing low wages. Most critically, Nigeria's oil workers have been on strike since Tuesday. They want the government to lower the price of fuel, which is subsidized, and to fix mountainous roads which they say have claimed the lives of truck drivers. They also want parliament to pass a bill that would reform the country's petroleum sector which has stalled since 2008. By Thursday, most gas stations in Nigeria had shut down, forcing drivers hoping to head home for Christmas to face long lines to fill their tanks. "We may be stranded," said Uzochukwu Madumere, a civil servant trying to drive to his hometown this week. Nigeria's plight resembles that of Russia, another big oil exporter whose economy has been stung by falling crude prices as well as Western sanctions. The government of President Vladimir Putin has been forced to jack up interest rates to stem a sharp selloff in the ruble. Nigeria's naira slipped to 187.45 against the U.S. dollar on Thursday, according to FactSet data, an all-time low. It has fallen almost 5% in December. The central bank has tried to halt the slide through increasingly broad measures. Last month, it raised its key lending rate one percentage point to 13% and devalued the currency to 168 against the dollar from 155. Wednesday's measures are unlikely to stop the fall, said Ayo Salami, chief investment officer at Duet Group Asset Management, which oversees about $5.5 billion. "It might help to support the naira in the next day or two, but the naira's fortune is so strongly linked to oil, that unless that market stabilizes, the currency will continue to depreciate," he said. Like other action that the central bank has taken in recent days, this "smells of desperation," Mr. Salami added. The government has recently tried to diversify the country's economy beyond commodities, but oil and natural gas still account for around 96% of Nigeria's export revenue. Earlier this month, Nigeria's finance ministry trimmed its budgeted Brent crude oil forecast to $65 a barrel from $73. The central bank has also repeatedly intervened in currency markets by selling U.S. dollars in a bid to prop up the naira. So far, however, that has offered limited respite. The Nigerian all-share stock index fell 2.8% on Thursday taking declines so far this year to nearly 30% and so far this month to more than 16%. Drew Hinshaw contributed to this article Corrections & Amplifications Nigeria's central bank last month boosted its key lending rate by one percentage point to 13%. An earlier version of this article mistakenly noted that the rate was boosted by 100 percentage points. (Dec.19, 2014) Write to Josie Cox at Credit: Josie Cox, Gbenga Akingbule
Subject: Central banks; Prices; Petroleum industry; American dollar
Location: Africa Nigeria
People: Putin, Vladimir
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637467954
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637467954?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Persian Gulf Stocks Rebound as Oil Gains; Region's Markets Also Benefit From Saudi Arabia Comments, Fed Messages
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
Ibrahim bin Abdulaziz Al-Assaf was quoted Wednesday by the local press agency saying that Saudi will continue to spend on development projects and social benefits next year, despite the "challenging" international economic and financial conditions.
Full text: DUBAI--Persian Gulf stocks, which tumbled into bear-market territory in the past few weeks, rebounded sharply Thursday as investors took heart from a and after Saudi Arabia said it would continue to spend at home. Global equity strength after the U.S. Federal Reserve said it was in further boosted regional risk sentiment. Stocks across the Gulf markets have been sold off in recent months as investors cut their exposure to the oil-exporting region, worrying that weaker oil prices would severely limit the Gulf states' ability to bolster their economies. But Saudi Arabia's finance minister helped ease some of those worries. Ibrahim bin Abdulaziz Al-Assaf was quoted Wednesday by the local press agency saying that Saudi will continue to spend on development projects and social benefits next year, despite the "challenging" international economic and financial conditions. The Saudi budget for the next fiscal year is expected to be released within days. "The comments from the finance minister are really reassuring," said Mohammed Alsuwayed, managing partner at advisory firm SPT Investors. "But they should have come earlier to protect the market from this fall," he added. Saudi stocks were trading nearly 9% higher at 8314.63 Thursday, after finishing up 4.2% in the previous session. The market is still down some 25% since hitting a high for the year in early September. There were signs that the oil market could be looking for a bottom, albeit a temporary one, as crude prices rose Thursday, after a selloff that has since midsummer because of a glut coupled with lackluster demand. Dubai stocks led the regionwide markets rally Thursday, jumping 13% in the session to finish at 3426.70. The benchmark DFM index was down 35% since mid-November at Wednesday's close, though many analysts felt that it was oversold for a market that is least dependent on oil in the region. Neighbor Abu Dhabi's market rose 6.7% to 4365.19 and Kuwaiti stocks closed 1.9% higher at 6230.09 Thursday. Qatar's market was closed for a national holiday. In terms of stocks, Dubai bellwether Emaar Properties rallied 15% to 6.78 dirhams ($1.85) and Abu Dhabi Commercial Bank was also up 15% at 6.90 dirhams. Write to Nikhil Lohade at Credit: By Nikhil Lohade
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637505578
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637505578?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gulf Oil Ministers Defend OPEC Output Stance; Ali al-Naimi Says Impossible for Cartel to Alone Push Up Oil Prices
Author: Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
Mr. al-Naimi said that OPEC members had tried to cooperate with non-OPEC producers in recent months to formulate a collective response to the slowdown in global oil demand growth, but .
Full text: Oil ministers from the Gulf states defended OPEC's recent despite a near-halving in since the summer, saying it was impossible for the oil-producer group to alone push up prices. Rising oil production from nonmembers of the Organization of the Petroleum Exporting Countries has made it difficult for the cartel to cut its own supplies and control prices, Saudi Arabia's Oil Minister Ali al-Naimi said, in his first detailed remarks since OPEC met in Vienna on Nov. 27. "The share of OPEC, as well as Saudi Arabia, in the global market has not changed for several years...while the production of other non-OPEC [countries] is rising constantly," Mr. al-Naimi said in remarks published Thursday in Arabic on the official Saudi Press Agency, or SPA. "In a situation like this, it is difficult, if not impossible, for the kingdom or OPEC, to take any action that may result in lower market share and higher quotas from others, at a time when it is difficult to control prices," Mr. al-Naimi was reported as saying. Mr. al-Naimi has been under pressure within Saudi Arabia to explain the Kingdom's stance at the meeting, with some arguing that OPEC's largest oil producer should be doing more to help reduce excess global oil supply. Some poorer OPEC members, such as Venezuela, have also for the cartel to respond more vigorously to oil's slump. at around $62.8 a barrel on Thursday, a 4.8% rise on the day but some 45% below its peak in mid-June. Mr. al-Naimi's comments were echoed by the energy minister of the United Arab Emirates, Mohamed Faraj Al-Mazrouei. "No one likes the price drop, but it is not right that one party should interfere to fix the matter. (The party) responsible for the price fall should contribute to fix the imbalance in the market," Mr. al-Mazrouei told official news agency WAM. Saudi Arabia has been at the forefront of those within OPEC who argue that it would be pointless for the cartel to cut its oil supply in response to slower global demand growth and increasing , as this would only allow other producers to seize market share and benefit from any uptick in prices. Mr. al-Naimi said that OPEC members had tried to cooperate with non-OPEC producers in recent months to formulate a collective response to the slowdown in global oil demand growth, but . Mr. al-Naimi and his counterpart from the U.A.E. expressed confidence their countries could withstand lower oil prices. Mr. al-Naimi said Saudi Arabia has a strong economy and huge financial reserves that mean it can bear the temporary volatility. "I'm optimistic about the future. What we are facing, and the world is facing is a temporary situation. The world economy, especially the economies of the emerging countries, will return to grow steadily and subsequently demand for oil will grow too," Mr. Naimi said. He denied that Saudi Arabia's political objectives underpinned its approach to falling oil prices. Some analysts have suggested the Kingdom is happy to see lower oil prices as it does more to harm the economies of its diplomatic enemies such as Iran and Russia. Mr. al-Naimi instead blamed "speculators" for much of the sharp swings in global oil prices. Write to Summer Said at Credit: By Summer Said
Location: Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637554119
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Fitch Downgrades Venezuela on Falling Oil Prices; Foreign and Local Currency Issuer Default Ratings, And Unsecured Bond Ratings Cut
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
Venezuela has recently turned to because of shortages caused by what economists call a toxic mix of unproductive local industry--hamstrung by nationalizations and government intervention--and a complex currency regime that is unable to provide the dollars importers need to pay for basics.
Full text: Fitch Ratings cut Venezuela's rating further into junk territory Thursday, saying that falling oil prices are pressuring the country's already-troubled finances. Fitch cut Venezuela's foreign and local currency issuer default ratings, as well as its unsecured bonds ratings, from B to triple-C. Fitch said oil is expected to account for about half of the this year. With prices in free fall, the country is facing increasing instability, balance of payment pressures and inflation issues. Compounding the issue is Venezuela's limited access to external financing, and a lack of available data on how bad things actually are, Fitch said. Fitch said it expects Venezuela to remain in a recession through next year. Venezuela has recently turned to because of shortages caused by what economists call a toxic mix of unproductive local industry--hamstrung by nationalizations and government intervention--and a complex currency regime that is unable to provide the dollars importers need to pay for basics. The tumbling price for Venezuela's oil is likely to mean even more scarcity in the cash-strapped country where inflation has skyrocketed, economists say. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Location: Venezuela
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637637463
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637637463?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Plunge in Oil Prices Brings Jitters to Texas City; Corpus Christi Boomed as Energy Jobs Expanded, but Signs of a Downshift Create Worries
Author: Campoy, Ana; Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract: None available.
Full text: CORPUS CHRISTI, Texas--This Gulf Coast city has ridden a rocket of a rebirth in recent years, propelled by a more than 30-fold increase in oil production at the nearby Eagle Ford Shale since the beginning of 2010. Corpus Christi's economy went from stagnant to zooming, growing by 8% in 2012 and 6% in 2013. Workers flush with cash have helped drive average home prices to nearly $200,000 from $150,000 four years earlier. The formerly sleepy port is bustling with crude shipments destined chiefly for refineries elsewhere in the U.S. and Canada. An old grain elevator now unloads sand used to crack shale formations through fracking and release oil and gas. Officials are building the first new public dock in more than 20 years. But anxiety is creeping in now that oil prices have plummeted to five-year lows amid a global glut, threatening the domestic energy revolution that has brought this city of 316,000 residents a taste of prosperity. Some beneficiaries of the boom already are starting to feel a downshift. "I'm concerned it's going to stay slow," said Randall Witten, a former car salesman who moved here three years ago to drive equipment to drilling sites. Business already has slackened noticeably in the past couple of months, said Mr. Witten, 41 years old. Analysts say it is too early to predict how hard the fall in oil prices will hit Texas, but few dispute there will be an impact. The oil and gas industry generated 13.5% of economic activity in the Lone Star state last year, according to researchers at the Federal Reserve Bank of Dallas. If prices stay low, Texas could be headed for a recession even as the rest of the U.S. benefits from cheaper fuel, the chief U.S. economist for J.P. Morgan Chase wrote clients Thursday. An energy-sector retrenchment would reverberate throughout the Texas economy, which has been boosted by jobs to house, clothe and feed the industry's workers. The state government's $100 billion annual budget, which has seen a windfall from energy production taxes in recent years, could be hit as well. There already are signs of a pullback, with the price of U.S. oil about $55 a barrel this week, down from $107 in late June. From Houston to Midland, oil-exploration companies are starting to scale back drilling plans for next year. Oil-field service companies that provide the labor and machinery to frack wells, such as Halliburton Co. and Schlumberger Ltd., are laying off employees. The number of oil rigs in Texas, which had grown 80% since the start of 2010, is falling, with five idled last week--though at 895 rigs, it remains higher than at this time last year. Business leaders are bracing for a slowdown, but say the city is in a much better position to weather any bust than in the 1980s, when collapsing oil prices put the local economy into the doldrums for years. The city, like the state, is less dependent on oil than decades ago, they add. They point to a growing medical center, a $41 million-plus water park and resort set to open next summer, and a federally designated drone research facility they hope will make Corpus Christi a hub for that industry. The city also has long-standing economic drivers, including military installations and millions of tourists who visit its beaches annually. "We will continue to have a healthy economy," said Mayor Nelda Martinez. Still, some economists say that a downturn in drilling would be deeply felt. At least half of the new jobs in the region are attributed to energy production, said Jim Lee, an economics professor at Texas A&M University, Corpus Christi. If drilling halts, "we're going to stop growing," he said. The boom has triggered an expansion of retailers--from big-box stores to jewelry shops--seeking to tap newly flush citizens. That in turn has given tourists like Laura Treviño, from the Mexican city of Monterrey, more reasons to travel to Corpus Christi and shop. "There wasn't much here before but now it's full of stores and restaurants," said Ms. Treviño, 42. At Ed Hicks Imports Ltd., the local Mercedes-Benz dealership, roadsters and sedans with big red ribbons on their hoods sit in a brand-new showroom. Ssales are up 45% since 2011, said general manager Charles Hicks. "We see faces that we've never seen before," he said. But the boom has been biggest at the Port of Corpus Christi, where outbound crude shipments accounted for more than a quarter of the 90 million tons of cargo that have moved through the port this year. Meantime, the surge in natural gas production in Eagle Ford Shale is attracting a new kind of customer: foreign manufacturers seeking stable energy supplies. They have committed billions of dollars for new plants, an investment that port officials hope will help the region better navigate volatile oil prices. Voestalpine AG, an Austrian steel company, is constructing a $740 million facility along the port's ship channelthat will transform iron ore pellets into a higher-grade raw material used to make cars and airplanes. The process requires huge amounts of energy--the new plant will use roughly one-tenth of the natural gas currently consumed by the entire nation of Austria, the company estimates from gas. Voestalpine was attracted to Corpus Christi due to its deep-sea access and proximity to South Texas's prolific gas wells, something that he doesn't see changing with fluctuating oil prices. "We are convinced we will be here in the long run," said Matthias Pastl, a Voestalpine executive. The company signed an 80-year lease for its Texas site. Write to Ana Campoy at and Lynn Cook at Credit: By Ana Campoy and Lynn Cook
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637644092
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637644092?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices Don't Give Clean-Energy Stocks the All-Clear; Oil's Decline Could Slow a Transition to Alternative Energy
Author: Moyer, Liz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
A large-scale shift to solar, wind and other energy sources will take time. [...]falling oil prices could slow the adoption of alternatives by making some of them economically undesirable or impractical.
Full text: These are dark days for investors in Big Oil. That doesn't mean clear skies for investors in clean energy. The sharp plunge in oil prices has dragged down the share prices of many global energy giants. But a number of companies that provide alternatives to fossil fuel have taken a similar hit. U.S. oil prices have fallen 15% this month through Friday, and the $10.6 billion Vanguard Energy Fund, a mutual fund that holds shares in large oil and gas producers, has fallen 3%. In the same period, the New Alternatives Fund, one of the largest mutual funds focused on alternative energy, is down 4.7%. Government policies and social acceptance may support the investment argument for more environmentally friendly energy sources. But investors who worry about the outlook for traditional energy providers--or who don't want to support the industry with their investments--should be alert to the risks of investing in clean energy and consider other options, such as putting money in funds that simply avoid oil and gas producers, financial advisers say. A large-scale shift to solar, wind and other energy sources will take time. Moreover, falling oil prices could slow the adoption of alternatives by making some of them economically undesirable or impractical. Potential for Big Gains "It's a very volatile sector," says Harris Roen, who publishes research on alternative-energy investments in the Burlington, Vt.-based Roen Financial Report. "For a portion of someone's portfolio, the more speculative portion, it's fine. There is the potential for big gains. But short-term, there is a lot of flux. You have to be prepared for that." High-profile investors have gained widespread attention this year for making plans to dump investments in fossil fuels or bet on clean energy. The Rockefeller family announced in September that it would shed its holdings in coal and other fossil fuels. Billionaire investor Warren Buffett said in June that Berkshire Hathaway, the company he heads, plans to double an existing $15 billion commitment to renewable-energy projects, including wind farms. Many people are drawn to such investments both because of social aims and potential profits. Environmental factors, such as clean and renewable energy, are incorporated into the management strategies of 672 mutual funds, hedge funds and other investment funds that collectively have $2.9 trillion in assets, according to the Forum for Sustainable and Responsible Investment's annual report. The New Alternatives Fund, whose largest holdings include Brookfield Renewable Energy Partners, which operates renewable-power facilities, and NextEra Energy Partners, which owns an array of clean energy projects, is up 1% this year. The fund has $171.3 million in assets as of Nov. 30, according to Chicago-based investment-research firm Morningstar. It charges 1.16% in annual fees, or $116 on a $10,000 investment, as well as a sales charge of up to 4.75%. Accrued Equities, an investment firm that runs the New Alternatives Fund, says it will introduce a similar mutual fund that carries no sales fee next month. The Guggenheim Solar exchange-traded fund, the largest ETF that focuses on alternative energy, includes Hanergy Thin Film Power Group, a solar-energy firm, and SunEdison, a semiconductor and solar-technology company, among its largest holdings. The fund has $262 million in assets, and charges 0.7% in annual fees. The fund is down 4.2% this month and down 2.7% so far this year. Investing at a Discount The recent pullback across the energy sector could provide an opportunity to invest in alternative energy at a discount, says Tom Moser, a financial adviser with High Impact Investments in Marana, Ariz., who specializes in the sector. "We are not at the point where the big energy companies are going away," he says. "But this is a transition. If one goes out 10 years from now and looks backward, they will probably say to themselves, 'I should have seen it.'" Still, the portfolios that Mr. Moser recommends to clients are diversified across dozens of stocks, and include both alternative-energy firms, such as Sun Edison, and companies that emphasize sustainability but that aren't directly involved in producing energy, such as Lifeway Foods, a health-food purveyor. Energy and organic food "are like kissing cousins," he says. Some funds avoid fossil fuels but don't particularly focus on alternative energy, and therefore may avoid much of the pain or gain that can be associated with energy stocks. For example, the Pax World Growth Fund says that it "strives to be fossil-fuel-free" by not investing in companies whose mission is to extract or refine fossil fuels, according to the prospectus. The fund holds shares of other large mainstream companies, such as Apple, PepsiCo and Google. The fund is down 0.8% this month and up 11% this year. It has $202.8 million in assets and charges 1.24% in annual fees. Write to Liz Moyer at Credit: By Liz Moyer
Subject: Alternative energy sources; Petroleum industry; Mutual funds; Energy policy
Location: United States--US
People: Buffett, Warren
Company / organization: Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210; Name: New Alternatives Fund; NAICS: 525120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637644122
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637644122?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Overheard: Commodities Drown in Oil
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract:
Citigroup estimates 65% of the net $20 billion withdrawn from passive index and commodity-linked exchange traded funds this year through early December was due to the energy sector.
Full text: Investing in an index is usually a good way to hedge your bets. In commodities, though, it is hard to get around one thing: energy. The oil market is enormous. Even after the recent slump in prices--and Thursday's rally fizzled quickly--the notional value of annual oil consumption is around $2 trillion. That is reflected in the makeup of the Bloomberg Commodity Index, of which oil and refined products such as gasoline constitute 17.2%. Throw in natural gas and the overall energy component rises to 27.2%. In another popular index, the S&P GSCI, oil alone weighs in at 67.2%. Oil has tanked both indexes since the summer. Citigroup estimates 65% of the net $20 billion withdrawn from passive index and commodity-linked exchange traded funds this year through early December was due to the energy sector. Its impact is likely wider than that, though, given that falling oil prices garner so many headlines and likely create negative sentiment around commodities as a whole. While oil's slump is largely blamed on rising supply, the other signal it sends is that of a slowing global economy-which weighs on all raw materials.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637648372
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637648372?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Lower Oil, Euro to Boost French Economy; More Positive Outlook Comes After a Long Period of Near Stagnation and High Unemployment
Author: Horobin, William
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract: None available.
Full text: PARIS--French economic growth will pick up slightly in the first half of 2015, as collapsing oil prices and a weaker euro amplify the impact of President François Hollande's tax cuts, national statistics agency Insee said Thursday. In its first forecasts for the first six months of next year, the statistics agency said gross domestic product growth will rise to 0.3% quarter-on-quarter in the first two quarters of 2015, from 0.1% in the final three months of 2014. "The pace of growth will be a little higher, compared with what we have seen since the spring of 2011," said Vladimir Passeron, an economist at Insee. The more positive outlook for the French economy comes after a long period of near economic stagnation thatand derailed Mr. Hollande's plans to repair the country's finances. Until now, even the French government has been cautious about the strength of the economic recovery next year, forecasting only a 1% expansion for the whole year. But based on Insee's forecasts for the first half of 2015, the economy would meet the government's target for the year, even if there were no further acceleration of growth in the second half. That outlook will give Mr. Hollande cause for optimism half way through his five-year term in office. So far, poor economic results have made the Socialist leader the least popular president on record, according to opinion polls, and contributed to stinging defeats for his party in local and European elections. The is already raising consumer spending power and improving the finances of companies, Insee said in its December economic outlook, entitled "the breaks are easing off a little." The against the dollar since the summer is also a key reason for a brighter outlook, as it will help exporters sell their products on global markets, Insee said. In its assessment of the impact on the French economy, Insee said the euro fell to $1.23 in early December from $1.37 on average in the second quarter, and oil fell to $78.4 a barrel in November from an average of $109.8 in the second quarter. Together the declines add 0.1 percentage point to quarter-on-quarter growth, and the economy could expand even faster if oil remains below $70 a barrel, or the euro falls further below $1.23, Insee said. The boost to competitiveness and company finances from a lower euro and a lower oil price will coincide for employers. That will improve corporate margins and encourage investment and recruitment, the statistics agency said. Still, despite the improvement in economic growth, Mr. Hollande will still miss his key target: bringing down unemployment. As the active population rises faster than jobs are created, unemployment will reach 10.6% in the second quarter of 2015, the highest level since 1997, Insee said. There is also significant uncertainty around the forecasts. Business leaders could further delay investment and the volatility of oil prices is hard to predict, Insee said. "We must be prudent because the oil price could rise as quickly as it fell," Mr. Palleron said. Write to William Horobin at Credit: By William Horobin
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637 654990
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637654990?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Morning Briefing: Dow Soars Despite Oil's Fall
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Dec 2014: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG DJIA 17778.2 421.28 2.43% Nasdaq 4748.4 104.08 2.24% S&P 500 2061.23 48.34 2.40% Japan: Nikkei 225 17210.1 390.32 2.32% Hang Seng 22832.2 246.37 1.09% Shanghai Composite 3057.52 -3.5 -0.11% S&P BSE Sensex 27126.6 416.44 1.56% Australia: S&P/ASX 5210.8 48.9 0.95% UK: FTSE 100 6466 129.52 2.04% PRICE CHG YIELD% U.S. 2 Year -1/32 0.637 U.S. 5 Year -8/32 1.665 U.S. 10 Year -20/32 2.211 Australia 10 Year -15/32 2.909 China 10 Year -3/32 3.810 India 10 Year -3/32 7.931 Japan 10 Year 4/32 0.350 German 10 Year -7/32 0.620 LAST(MID) CHANGE Australia $ (AUD/USD) 0.8162 -0.0004 Yen (USD/JPY) 118.85 0.02 S. Korean Won (USD/KRW) 1099.79 0.05 Chinese Yuan (USD/CNY) 6.2154 -0.0002 Euro (EUR/USD) 1.2286 -0.0001 WSJ Dollar Index 82.41 0.01 LAST CHANGE % CHG Crude Oil 55.11 -1.36 -2.41% Brent Crude 59.91 -1.27 -2.08% Gold 1198.5 4 0.33% SNAPSHOT Federal Reserve reassurances that it won't raise rates anytime soon boosted stocks for the second straight day, sending the Dow to its biggest two-day gain in more than three years while leading Treasurys to their biggest two-day selloff in more than a year. Oil prices resumed their slide, the dollar strengthened, and gold prices edged higher. OPENING CALL The Bank of Japan will deliver a monetary-policy decision on Friday. There's not much more the BOJ can do right now to boost the economy. And with the energy-importing country considered one of the biggest beneficiaries of the fall in oil prices, the BOJ is now receiving some supplemental stimulus help. EQUITIES The Dow Industrials vaulted to their biggest two-day gain in more than three years, bolstered for a second session by reassurances from the Federal Reserve that it remains in no rush to raise interest rates. Stocks spent the entire session sharply higher, with the gains snowballing toward the closing bell as investors were cheered for a second session by comments from the Federal Reserve that it would be "patient" in raising interest rates. Also boosting stocks was a spate of positive earnings news from the technology sector and buying in beaten-down energy stocks among bargain-minded investors. While investors say the Fed's comments Wednesday didn't come as a complete surprise, they are the latest sign that the central bank is planning a cautious and measured approach to raising rates, with an eye on ensuring that rate increases don't roil financial markets or knock the economic recovery off track. The Fed is widely expected to raise rates next year. "People are under the impression that the Fed is not going to be in a hurry [to raise interest rates]; they really needed to hear that," said David Seaburg, head of sales trading at Cowen and Co. "I think the word "patience" gives them clarity." Investors of many stripes took part in Thursday's buying, traders said, with both hedge funds and large asset managers taking on new positions. Also driving the gains: last-minute portfolio shuffling by managers angling to eke out gains as the end of the year approaches. Many portfolio managers are lagging behind broader indexes this year, leaving them under pressure to shuffle holdings and buy up stocks, possibly in expectation of a year-end rally. "Ever since the Fed announcement it's been pretty broad-based buying," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. He added that investors "could be looking for a year-end rally, which we've had the last few years. It looked like it wasn't going to happen this year, but maybe now they're hoping it still might." Technology stocks posted the sharpest gains, boosted by a 10.2% rise in Oracle shares and a 5.2% advance in Accenture. Both companies posted better-than-expected quarterly results. Economic news continued to suggest the economy remains on the right track, with the Labor Department reporting that jobless claims fell by 6,000 to 289,000 in the week ended Dec. 13. Economists polled by The Wall Street Journal had expected 295,000 claims. In corporate news, Merck acquired OncoEthix, a private Switzerland-based biotechnology company, for up to $375 million. The deal includes a payment of $110 million, and OncoEthix could receive additional payments of up to $265 million contingent upon clinical and regulatory approval. Merck shares rose 2.3%. Chevron said Wednesday it has suspended plans to drill for oil in Arctic waters because of the uncertain outlook for crude-oil prices. Shares rose 2.8%. Nike said its sales rose 15% to $7.38 billion for the quarter ended November, exceeding analysts' expectations. Nike reported a profit of $655 million, or 74 cents a share, but shares fell more than 2% in after-hours trading. In Asian trading Thursday, Japanese stocks led most of the region Asia higher as investors were encouraged to take on more risk after signals that the U.S. remains patient in its approach to raising interest rates. FOREX The dollar rose against other major currencies, as investors were encouraged by the Federal Reserve's latest comments on the health of the economy and future monetary-policy tightening. Currency investors chose to focus on the bigger picture, even if the Fed's latest statement didn't deliver the kind of hawkish rhetoric many were hoping for, said Omer Esiner, chief market analyst at Commonwealth Securities. "The Fed is modifying its statement to reflect an improving economic backdrop and is still on target to tighten monetary policy sometime next year," Mr. Esiner said. "And Yellen did leave the door open for an earlier rate hike." BONDS U.S. Treasury bond prices sank, wrapping up the biggest two-day selloff in more than a year, as the Federal Reserve's stance of being patient in raising interest rates cheered up global stocks. A round of upbeat global data also sapped demand for haven bonds. Retail sales in the U.K. rose last month at the fastest pace in 2014. A gauge of business confidence in Germany improved. The latest jobless claims in the U.S. dropped last week, a sign of the labor market gaining traction. The flight out of Treasury debt suggests investors' sentiment has improved over the past two days. Investors had piled into Treasury bonds for safety earlier this week, sending benchmark bond yields to the lowest level in more than a year, as market turmoil in Russia and weak manufacturing releases out of China and Germany had heightened anxiety over the global economy. "The fear trade has subsided," said James Combias, head of U.S. Treasury trading at Mizuho Securities USA Inc. in New York. "Given bond yields at these low levels, it is not unusual to see haven demand pull back as risky markets calm down." COMMODITIES Oil prices resumed their monthslong slide amid bearish comments from Russia and OPEC leaders and reports that a Nigerian dockworker strike was lifted, raising the possibility of more crude in a global market already brimming with supplies. The decline arrested two straight sessions of gains for crude prices and brought the benchmark contracts to new five-year lows, as analysts said there was little reason for the market to stabilize given limited change to the bearish supply-demand picture that has cut prices nearly in half since June. The market rallied early Thursday in reaction to part of the comments made by Saudi Arabia's oil minister but gave back those gains as it became clear that he and others maintained the same dour outlook. The slide deepened within the last hour of trading, repeating a volatile pattern of recent sessions in which early gains have been whittled away over the course of the day. "These rallies are just bounces, but we're still in a downtrend and we're really not getting any encouraging news from anywhere," said Andrew Lebow, a broker at investment bank Jefferies. Gold prices edged higher after Switzerland's central bank said it would introduce negative interest rates next year and as traders continued to adjust their outlook on U.S. monetary policy. TODAY'S HEADLINES Stocks Surge on Fed Stance The Dow industrials surged by more than 400 points, boosted for a second session by reassurances from the Federal Reserve that it is in no rush to raise interest rates. U.S. Weighs Response to Sony Hack Homeland Security Secretary Jeh Johnson said the U.S. is weighing a "range of options" to respond to the hack of Sony Pictures, but declined to say who the government believes is behind what it regards as "a very serious attack." Putin Strikes Harsh Tone With West President Vladimir Putin accused the West of trying to subdue and disarm Russia at a defiant annual news conference, and blamed "external factors" for the collapse of Russia's currency and stock market. Fed Gives Banks More Time to Sell Private-Equity, Hedge Fund Stakes The Federal Reserve said it would give banks two more years to sell private equity and hedge fund stakes covered by the Volcker rule, a win for banks who had requested more time to unwind positions. Nike Sees Jump in Sales, Growth Concerns Nike said its sales surged 15% to $7.38 billion for the quarter ended November, exceeding expectations, but shares of the athletic apparel maker slid amid concerns about future growth. American Realty Suit Blames Ex-Chairman Former American Realty Capital Properties Chairman Nicholas Schorsch in July directed two executives to manipulate quarterly financial results, according to a complaint filed by former Chief Accounting Officer Lisa McAlister. MetLife Designated 'Systemically Important' A panel of federal regulators concluded MetLife poses significant risks to the financial system and warrants tougher oversight, setting up a possible legal showdown with the U.S. about whether that assessment is accurate. BATS Opposes NYSE Owner's Stock-Market Reform Plan BATS Global Markets, one of the three big stock exchange operators, is opposed to a draft proposal by the owner of the New York Stock Exchange to reform the U.S. stock market, its CEO said in an interview. France Fines Consumer Product Companies France's antitrust authority said it has fined a group of personal and home-care products companies a total of nearly $1.23 billion for anticompetitive practices between 2003 and 2006 Goldman's Waldron Becomes Investment Banking Co-Head Goldman Sachs Group promoted John Waldron to co-head of investment-banking, replacing John S. Weinberg, a vice chairman whose father and grandfather once led the Wall Street firm. RECENT DJ DOMINANTS Liberty Media's CommerceHub Acquires E-Commerce Adviser Mercent BATS Opposes NYSE Owner's Stock-Market Reform Plan Ex-American Realty Chair Schorsch Told Managers to Manipulate Financials, Former Executive Says U.S.: Several Top Islamic State Leaders Have Been Killed in Iraq Regulator Expected To Set Penalty on Former MoneyGram Compliance Officer TODAY'S CALENDAR (Times in GMT, followed by country and event) 0000 NZ Dec ANZ Business Outlook 0001 UK Nov Knight Frank House Price Sentiment Index 0001 UK Dec Hometrack Monthly UK House Price City Index 0005 UK Dec UK Consumer Confidence Survey 0200 NZ Nov Credit card statistics 0430 JPN Oct All Industry Index 0500 JPN Nov Steel Production 0500 JPN Oct Indexes of Business Conditions - Revision 0530 JPN Nov Tokyo area department store sales 0530 JPN Nov Nationwide department store sales 0700 GER Jan GfK consumer climate survey 0700 GER Nov PPI 0730 THA Weekly International Reserves 0745 FRA Dec Monthly business survey (goods-producing industries) 0830 HK Q3 Balance of Payments 0900 ITA Oct Industrial turnover & orders 0900 EU Oct Euro area balance of payments 0930 UK Nov Public sector finances 0930 UK Q3 Bank of England on UK banks external claims 1100 UK Dec CBI Monthly Distributive Trades Survey 1130 IND Weekly foreign exchange reserves 1330 US Q3 State Quarterly Personal Income 1330 CAN Nov CPI 1330 CAN Oct Retail trade 1500 US Nov Regional & State Employment & Unemployment 1500 US FRB Chicago President Charles Evans speaks at Annual Summit on Regional Competitiveness 1600 US Dec Federal Reserve Bank of Kansas City Survey of Tenth District Manufacturing 1900 CAN Bank of Canada Weekly Financial Statistics
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 18, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637701419
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637701419?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop Hits Big Investors Hard; Icahn, Paulson Suffer Large Losses as Energy-Related Bets Sour
Author: Juliet Chung Gregory Zuckerman; Benoit, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
Brazilian private-equity firm 3G Capital, which bought ketchup maker H.J. Heinz Co. with billionaire investor Warren Buffett, recently launched a hedge fund that is up more than 20% for the year through November on the back of a similar prediction, according to an investor presentation.\n
Full text: The recent slide in oil prices has caused sharp losses among some of Wall Street's biggest names, the latest in a series of bad bets made by star investors during 2014. Carl Icahn, the billionaire activist investor, has seen his firm's holdings of Canadian oil-and-gas company Talisman Energy Inc. tumble $230 million since late August, based on an analysis of his holdings, a rare stumble for the prominent investor. Icahn Associates Corp. was the largest holder of Talisman, with more than 7% of the company's shares. The Icahn losses were more than $540 million as recently as Dec. 11 before Talisman agreed to be purchased, boosting the stock. At the deal price, he would lose about $290 million on his original investment, according to the analysis. His company's total investment portfolio was up 4.4% through the first nine months of the year, according to regulatory filings. "In this oil environment, I'm certainly glad a bidder came along for it," Mr. Icahn said. "I believe oil is going to go lower, but I think over the long term it presents great opportunities." The $19 billion firm run by billionaire John Paulson had one of its largest losses of the year on a gamble that big oil firms would gobble up smaller ones, according to investors and people briefed on the trade. Instead, some smaller energy stocks held by Paulson & Co. plunged in value amid weak crude prices. Mr. Paulson's strategy could yet pay off; many analysts expect consolidation in the energy sector as larger companies buy smaller firms now under pressure. It wasn't clear just how big Paulson & Co.'s loss was. This year, several of the funds controlled by Mr. Paulson, who became famous for his successful bet against the housing market just before the financial crisis, experienced double-digit-percentage losses, according to an investor. Mr. Paulson didn't respond to requests for comment. Many fund managers weren't prepared for the drop in oil prices, as smaller funds posted losses of as much as 40% due to their exposure to energy companies and an oil-related currency crisis in Russia, investors said. "The move has been breathtaking and relentless," said Scott Warner, of Pacific Alternative Asset Management Co., an Irvine, Calif., firm that invests in hedge funds for institutional investors and has $9.5 billion in assets under management. "There's definitely been some pain out there." The oil losses are adding to monthslong troubles in the $2.8 trillion hedge-fund industry, which has been battered by several popular trades in one of its worst years since the 2008 financial crisis. The industry is essentially flat for the year, following an average loss of about 2% by stock funds during the first two weeks of December, according to industry research firm HFR. By contrast, the S&P 500 index is up 10.48%, including dividends, through the same period. The most recent round of pain for many hedge funds began with the Nov. 27 decision by the Organization of the Petroleum Exporting Countries to keep pumping oil despite a glut, triggering the fastest selloff in crude prices since 2008. The price of U.S. oil fell below $60 a barrel for the first time in five years this month, punishing currencies of big oil exporters around the world. On Thursday, oil fell further, down 4.2%, to settle at $54.11 a barrel, on the New York Mercantile Exchange, its lowest level in more than five years. Those caught flat-footed by the price pullback include Prosperity Capital Management's Mattias Westman, a longtime investor in Russia whose firm lost more than $1 billion this year, in part on stakes in Russian energy companies OAO Gazprom, OAO Bashneft and Lukoil Holdings. He now manages about $2 billion, down from $4 billion at the start of the year, as some investors also pulled funds. Some losses are tied to the ruble's fall against the dollar. "It's quite unfortunate," said Mr. Westman, who bet that OPEC's decision to maintain crude output levels wouldn't affect prices as significantly as it did because such a move had been flagged previously. Some hedge funds were on the right side of falling oil prices. London-based Andurand Capital Management LLP, run by former Goldman Sachs Group Inc. and Vitol Inc. oil trader Pierre Andurand, is up 33% through Dec. 12, according to a person familiar with the firm. The $400 million Andurand firm had bet on a fall in crude-oil prices, wagering that OPEC wouldn't cut output, the person said. Brazilian private-equity firm 3G Capital, which bought ketchup maker H.J. Heinz Co. with billionaire investor Warren Buffett, recently launched a hedge fund that is up more than 20% for the year through November on the back of a similar prediction, according to an investor presentation. The fund is run by Dan Dreyfus, a former longtime proprietary trader for Goldman Sachs. While some funds appear to have escaped big hits after reducing exposure to energy and related investments, large losses have hurt some specialized funds. Dorset Management Corp.'s energy fund, which managed nearly $300 million as of July, was down 34% for the year through Dec. 12, according to an investor. UFG Asset Management's $90 million Russia Select Fund was down about 31% through mid-December, compared with a roughly 47% drop for the period for the MSCI Russia index, which has been hurt in part by the tumble in crude. Mr. Paulson's bet that shale-energy producers would consolidate existed in more than one of his funds, said clients. At the end of the last quarter, according to FactSet, Paulson was the biggest holder of Whiting Petroleum Corp. and Oasis Petroleum Inc., big producers in the Bakken, one of North America's most prolific shale fields. The firm also held shares of other producers. Whiting is down from $77.55 to $31.91 since Sept. 30 through Thursday's close, and Oasis is down from $41.81 to $16.25 over the same period. A hedge intended to protect Paulson & Co. from a drop in oil prices hasn't worked fully because the hedge, a wager against at least one oil-stock index, hasn't fallen nearly as much as the smaller companies the fund owned, according to an investor in the fund. That is because larger energy producers in the index have held up better than the shale-focused companies Paulson owned, the person said. Earlier this year, Paulson & Co. was battered by unraveling trades on housing-finance companies Fannie Mae and Freddie Mac and a proposed drug company merger that collapsed. Mr. Icahn is known for his timely stakes in large companies, but the sudden decline in oil prices worsened a cash crunch faced by Calgary-based Talisman, according to its chief executive. Mr. Icahn amassed about 76 million shares of Talisman last year and became its largest shareholder. After Repsol SA announced a $8.3 billion deal to buy Talisman, the shares climbed back from a low of $3.69 on Dec. 11; it closed at $7.78 on Thursday. Mr. Icahn also holds stakes in hard-hit energy companies Chesapeake Energy Corp. and Transocean Ltd. Some hedge funds are looking to take advantage of the turmoil, some investors said, looking at everything from debt and stocks that sold off sharply to longer-term opportunities, like lending to distressed energy companies that are facing payments due in coming months. The $14 billion Avenue Capital Group, a longtime energy investor, has invested hundreds of millions of dollars in energy-related investments since November alone, said a person familiar with the firm. "We're sifting through the wreckage" to find energy companies that are still profitable at lower oil prices, said Michael Reeber, a founder of $230 million hedge fund Andalusian Capital Partners. But for most fund managers, mea culpas to investors are more common as 2014 draws to a close. Leon Cooperman, the founder of Omega Advisors, said in an October letter that "we are disappointed with our performance" after disclosing a 1.4% return through the first nine months of the year. Omega had 17% of its portfolio in energy stocks at the end of September. Its returns have since shrunk, according to a person familiar with the firm. It is now up a total of 0.6% for the year through November, the person said. Corrections & Amplifications Investor Warren Buffett didn't help 3G Capital buy Burger King Worldwide Inc. An earlier version of this article incorrectly said Mr. Buffett had helped with the purchase. (Dec. 19, 2014) Write to Juliet Chung at and Gregory Zuckerman at Credit: By Juliet Chung, Gregory Zuckerman and David Benoit
Subject: Petroleum industry; Investment advisors; American dollar; Economic crisis; Crude oil prices; Institutional investments
Company / organization: Name: Icahn Associates; NAICS: 523910; Name: Talisman Energy Inc; NAICS: 211111; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637726856
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637726856?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
St. Croix Refinery Revival Awaits Tax Vote; Energy Team Leading Effort Says Cheap U.S. Oil Would Aid Plant's Resurrection
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
For another, the Atlantic Basin offer for the refinery was the only bid for the plant, which was closed in 2012 because of exorbitant operating costs. Since last year, Hovensa, a joint venture between Hess Corp. of New York and PdVSA, the national oil company of Venezuela, has been searching for a buyer. In 2008, the U.S. Commodity Futures Trading Commission alleged that while he worked as executive managing director of the Bank of Montreal's Commodity Derivatives Group, Mr. Moore turned a blind eye while a trader on his team allegedly inflated the value of his positions in the market and defrauded the bank.
Full text: Robert Moore, a former energy trader in New Canaan, Conn., was eating dinner at a local Mexican restaurant last year when he overheard a fellow diner talking excitedly about reopening in the U.S. Virgin Islands. The very same refinery, it turned out, that Mr. Moore had been hoping to bring back to life. Now, the two diners are part of a team of energy executives that have bid to buy the St. Croix refinery, once the world's largest. Taking advantage of cheap U.S. oil and some transportation advantages, they say, their Atlantic Basin Refining Inc. could start pumping out gasoline and diesel as early as 2017. But they need the refinery's special tax treatment extended, a deal that must be approved by the Virgin Islands Senate. And the senators, who are slated to vote Friday, say they have some doubts. For one thing, while Atlantic Basin's executives are energy-industry veterans, none has run a refinery and they didn't know each other until last year. Some senators say they had been hoping a large, well-known oil company would take over the site, which had been the largest private employer in the Virgin Islands. "I don't know who these people are," Senate President Shawn-Michael Malone said of Atlantic Basin, which has to raise about $1.2 billion in financing to fund the project. Mr. Malone and other senators have expressed doubt the company can pull such a deal together. For another, the Atlantic Basin offer for the refinery was the only bid for the plant, which was closed in 2012 because of exorbitant operating costs. Since last year, Hovensa, a joint venture between Hess Corp. of New York and PdVSA, the national oil company of Venezuela, has been searching for a buyer. Lazard Ltd., the investment bank handling the sale, talked to more than 140 refiners, oil companies, trading firms and private-equity investors but got no other takers. "We didn't select them," George Dudley, a lawyer for Hovensa, said of Atlantic Basin during a Senate committee meeting this week. "They were the only bidder." Mr. Moore, managing director of Atlantic Basin, says the partners have raised more than $100 million in cash to close the deal, and have talked to several Asian banks, private-equity firms and wealthy individuals who are interested in backing the next phase of the project. Some U.S. refining veterans including Tom O'Malley, chief executive of PBF Energy Inc., are skeptical. "I think the people are nuts," he said. "It's really tough for me to figure out how the whole thing is going to work." But Mr. Moore says the group can resurrect the plant by running lower-cost U.S. light, sweet crude through it instead of the Venezuelan oil the refinery used to process. The group has also come up with a cheaper way to power the plant. Instead of the fuel oil the plant used to run on, Atlantic Basin plans to use liquefied petroleum gas, a refinery byproduct that is abundant, cheap and found in abundance alongside the oil the site will turn into fuel. "We're going to hire a lot of people, we're going to create a lot of jobs, and we're going to pay a lot of taxes," Mr. Moore said. "Everybody else passed on this thing. We didn't. We're willing to take a shot." U.S. oil can be shipped from Texas to St. Croix for even less money than it takes to move oil from Texas to New Jersey. That is because a law that requires oil cargoes moving between U.S. ports to be loaded on to expensive U.S.-owned tankers , even though it is a U.S. territory. Mr. Moore spent years trading oil, natural gas and power at various companies. In 2008, the U.S. Commodity Futures Trading Commission alleged that while he worked as executive managing director of the Bank of Montreal's Commodity Derivatives Group, Mr. Moore turned a blind eye while a trader on his team allegedly inflated the value of his positions in the market and defrauded the bank. Mr. Moore was ordered to pay a $150,000 civil penalty to settle the complaint. "It was subsequently resolved without any admission of liability," Mr. Moore said. "This has nothing at all to do with the deal." Shortly after the refinery closed in 2012, Mr. Moore teamed up with Jack Thomas, a specialist in revamping aging industrial sites, and the two worked on a plan to revive the St. Croix refinery. They later brought in the man at the restaurant, Steven Schmitz, a refinery-acquisition expert, as well as William Forster, a former Lehman Brothers banker and former chief executive of Cheniere Energy Inc., for his experience financing energy deals. Mark Eckard, a Virgin Islands attorney and chairman of the St. Croix Chamber of Commerce, manages and legal government affairs. A major hurdle Atlantic Basin must clear: The company wants to avoid spending $700 million on new pollution controls mandated by a settlement with the U.S. Environmental Protection Agency before the plant shut down. Atlantic Basin says its simpler refinery will be cleaner and help it to resolve the issue. The EPA says it has had conversations with Atlantic Basin, but hasn't reviewed the company's plans. Write to Alison Sider at Credit: By Alison Sider
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637726857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637726857?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Notches Biggest Gain in Two Years; U.S. Benchmark Up 4.5% as Traders Close Out Bets on Falling Prices
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
Other headlines that were bullish for prices included news that Mexico's national oil company could soon seek to buy as much as 100,000 barrels a day of light oil from the U.S. for blending and refining purposes, which could reduce the amount of oversupply in the market.
Full text: U.S. and global oil benchmarks jumped to their largest percentage gains in more than two years on Friday, as a handful of modestly bullish headlines supported the market and traders closed out bets that prices would fall. Analysts said the market seemed oversold and due to stabilize, at least for the time being, in the absence of further bearish news about growing global supplies. The front-month January contract expired with the close of trading Friday, providing the last opportunity for traders with bets against the market to close out positions. The U.S. crude contract for January rose $2.41, or 4.5%, to settle at $56.52 a barrel on the New York Mercantile Exchange. Most of the volume in the market has already moved forward into the February contract, which also rose, settling up 5.1% at $57.13 a barrel. The global Brent benchmark climbed $2.11, or $3.6%, to settle at $61.38 a barrel on the ICE Futures Europe exchange. In percentage terms, the day's gains were the largest for both contracts since 2012, though those moves have come to appear exaggerated as outright crude prices have been cut nearly in half from their June peak earlier in the year. In dollar terms, the gains were the largest for both contracts since Dec. 1. The U.S. benchmark has gained in three of the last four sessions, while Brent has gained in two of the last three sessions. On Friday, a Reuters report said Nigeria would reduce exports of its main crude stream in February by nearly a third, to 271,000 barrels a day from 398,000 barrels in January. Nigeria is a top source of light, sweet crude and one of the U.S.'s top 10 suppliers. Other headlines that were bullish for prices included news that Mexico's national oil company could soon seek to buy as much as 100,000 barrels a day of light oil from the U.S. for blending and refining purposes, which could reduce the amount of oversupply in the market. The count of rigs drilling for oil in the U.S. also was reduced for the seventh time in 10 weeks to their lowest level since May. Still, overall conditions in the market remain bearish, with oil production outstripping global demand, and analysts noted the growing supply imbalance is expected to continue into the first half of 2015. Despite Friday's gains, the Nymex and Brent contracts ended lower on the week, for the fourth consecutive losing week in a row. "In the big picture, nothing's changed, the market's going to be oversupplied next year," said Phil Flynn, an account executive at wholesale brokerage Price Futures Group in Chicago. Still, "it's possible that maybe there's some light at the end of the tunnel that could provide a little stability." U.S. gasoline futures ended up 3.23 cents, or 2.1%, at $1.5595 a gallon on the Nymex. Diesel futures rose 2.35 cents, or 1.2%, to $1.9622 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen And Georgi Kantchev
Subject: Petroleum industry; Futures; Crude oil prices; Petroleum production
Location: Nigeria United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637757058
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637757058?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BOJ Plays Down Slide in Oil Prices
Author: Nakamichi, Takashi; Ito, Tatsuo
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
The BOJ expanded its monetary easing on Oct. 31, saying it wanted to protect Japan's fragile inflation expectations. Because the BOJ backed its commitment to the 2% target with action, inflation expectations of households and business executives have remained at "elevated levels" since, making further easing unnecessary for now, Mr. Kuroda said.
Full text: TOKYO--The Bank of Japan stood pat on monetary policy Friday despite a rapid fall in global oil prices that threatens the central bank's efforts to generate 2% inflation. Oil prices have fallen more than 25% since late October, when the BOJ expanded its monetary easing program, citing the decline in oil prices as a threat to its quest to defeat more than a decade of deflation. This time, though, BOJ Gov. Haruhiko Kuroda played down concerns over oil prices, and expressed more optimism about Japan's economy, which some took as a sign that he isn't considering taking additional steps anytime soon. "The conversion of the deflationary mindset of the Japanese people is making steady progress," Mr. Kuroda said at a news conference, after the BOJ's nine-member policy board voted 8-1 to keep its policy on hold. The BOJ expanded its monetary easing on Oct. 31, saying it wanted to protect Japan's fragile inflation expectations. Because the BOJ backed its commitment to the 2% target with action, inflation expectations of households and business executives have remained at "elevated levels" since, making further easing unnecessary for now, Mr. Kuroda said. Considering the extent of the decline in oil prices, it "may be difficult" for Japan's inflation rate to pick up until early summer, he said. But "from a slightly long-term perspective," lower energy costs will actually put upward pressure on prices by stimulating economic growth, keeping Japan's inflation rate on course toward the 2% target "in or around" the year through March 2016, he said. Nevertheless, many private economists say they expect the BOJ to open its monetary spigot further next year. Junichi Makino, chief economist at SMBC Nikko Securities, predicts that the BOJ will act at its Jan. 20-21 meeting at the earliest. Japan's inflation rate, as gauged by the core consumer price index, slipped in October to 0.9%, adjusted for a national sales tax increase in April. Gasoline and other energy items account for about 8% of the core index. A drop in oil prices has been a welcome relief for consumers, particularly in big oil importing nations like Japan. But it has been a source of headaches for central banks struggling to stoke inflation, including the European Central Bank. If cheaper energy prices strengthen general expectations that growth in consumer prices will weaken, that could become a self-fulfilling prophesy. While emphasizing his optimistic price outlook, Mr. Kuroda acknowledged that unless Japanese companies raise wages, putting more real money into consumers' pockets, the BOJ could fall short of its target. "For us to achieve 2% inflation and make it sustainable, continued wage growth is absolutely essential," he said. Write to Takashi Nakamichi at and Tatsuo Ito at Credit: By Takashi Nakamichi And Tatsuo Ito
Location: Japan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637778349
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Market Can't Find A Reason To Rally
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Dec 2014: C.4.
Abstract:
[...]he went on to say that the Organization of the Petroleum Exporting Countries would maintain output levels in a bid to retain its market share, prompting oil traders to cash out of the early gains in both contracts.
Full text: Oil prices resumed their monthslong slide Thursday amid bearish comments from Russia and OPEC leaders and reports that a Nigerian dockworker strike was lifted, raising the possibility of more crude in a global market already brimming with supplies. The decline followed two consecutive sessions of gains for crude prices and brought the benchmark contracts to new five-year lows. Analysts said there was little reason for the market to stabilize given limited change to the bearish supply-demand picture that has cut prices nearly in half since June. The market rallied early Thursday in reaction to part of the comments made by Saudi Arabia's oil minister, but gave back those gains as it became clear he and others maintained the same dour outlook. The slide deepened within the last hour of trading, repeating a volatile pattern of recent sessions, in which early gains have been whittled away over the course of the day. The benchmark U.S. oil-futures contract ended down $2.36, or 4.2%, at $54.11 a barrel on the New York Mercantile Exchange. The global Brent crude contract ended down $1.91, or 3.1%, at $59.27 a barrel. Both contracts ended at the lowest price since May 2009. "These rallies are just bounces, but we're still in a downtrend, and we're really not getting any encouraging news from anywhere," said Andrew Lebow, a broker at investment bank Jefferies. Thursday's early rally was kicked off after Saudi Arabia's oil minister, Ali al-Naimi, characterized the recent price rout as "temporary" in published comments and said crude demand would recover as the global economy improves. But he went on to say that the Organization of the Petroleum Exporting Countries would maintain output levels in a bid to retain its market share, prompting oil traders to cash out of the early gains in both contracts. The energy minister of the United Arab Emirates also defended OPEC's inaction, saying the cartel wasn't responsible for the growing surplus of oil on world markets. The comment was interpreted by analysts as a shot at the U.S., which is producing more than 9.4 million barrels of oil a day and exporting more than one-third of that in the form of refined products such as gasoline and diesel. And in a news conference, Russian President Vladimir Putin said the country's economy will restructure itself to handle low oil prices that could last as long as two years in a worst-case scenario, even if prices fell as low as $40 a barrel. Meanwhile, dockworkers in Nigeria suspended a strike and allowed port activities to resume. Analysts said the market took that as a signal of renewed oil exports there. Nigeria is the largest oil producer in Africa, exporting 2.2 million barrels a day. Indeed, several analysts said the bearish fundamental conditions of massive production and shrinking demand remain in place and are expected to continue in the first half of 2015. "We continue to see further downside risk for Brent as the oversupply in the global market continues to grow," said Macquarie Bank strategist Vikas Dwivedi in a note to clients. Global energy companies have scrambled to adjust in the face of an uncertain outlook. Chevron Corp. became the latest big name to scale back, telling Canadian regulators Wednesday that it has "indefinitely" suspended plans to drill for oil in the Arctic. Other companies, including Marathon Oil, Husky Energy and Penn West Petroleum, have pared their capital-spending plans in recent days. U.S. drivers are seeing the effects of lower prices at the pump. AAA said average U.S. retail gasoline prices on Thursday fell below $2.50 a gallon for the first time in more than five years, to $2.48 a gallon. Credit: By Christian Berthelsen
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 19, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637860813
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop Pummels Big-Name Investors
Author: Chung, Juliet; Zuckerman, Gregory; Benoit, David
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Dec 2014: A.1.
Abstract:
Brazilian private-equity firm 3G Capital, which bought ketchup maker H.J. Heinz Co. with billionaire investor Warren Buffett, recently launched a hedge fund that is up more than 20% for the year through November on the back of a similar prediction, according to an investor presentation.\n
Full text: The recent slide in oil prices has caused sharp losses among some of Wall Street's biggest names, the latest in a series of bad bets made by star investors during 2014. Carl Icahn, the billionaire activist investor, has seen his firm's holdings of Canadian oil-and-gas company Talisman Energy Inc. tumble $230 million since late August, based on an analysis of his holdings, a rare stumble for the prominent investor. Icahn Associates Corp. was the largest holder of Talisman, with more than 7% of the company's shares. The Icahn losses were more than $540 million as recently as Dec. 11 before Talisman agreed to be purchased, boosting the stock. At the deal price, he would lose about $290 million on his original investment, according to the analysis. His company's total investment portfolio was up 4.4% through the first nine months of the year, according to regulatory filings. "In this oil environment, I'm certainly glad a bidder came along for it," Mr. Icahn said. "I believe oil is going to go lower, but I think over the long term it presents great opportunities." The $19 billion firm run by billionaire John Paulson had one of its largest losses of the year on a gamble that big oil firms would gobble up smaller ones, according to investors and people briefed on the trade. Instead, some smaller energy stocks held by Paulson & Co. plunged in value amid weak crude prices. Mr. Paulson's strategy could yet pay off; many analysts expect consolidation in the energy sector as larger companies buy smaller firms now under pressure. It wasn't clear just how big Paulson & Co.'s loss was. This year, several of the funds controlled by Mr. Paulson, who became famous for his successful bet against the housing market just before the financial crisis, experienced double-digit-percentage losses, according to an investor. Mr. Paulson didn't respond to requests for comment. Many fund managers weren't prepared for the drop in oil prices, as smaller funds posted losses of as much as 40% due to their exposure to energy companies and an oil-related currency crisis in Russia, investors said. "The move has been breathtaking and relentless," said Scott Warner, of Pacific Alternative Asset Management Co., an Irvine, Calif., firm that invests in hedge funds for institutional investors and has $9.5 billion in assets under management. "There's definitely been some pain out there." The oil losses are adding to monthslong troubles in the $2.8 trillion hedge-fund industry, which has been battered by several popular trades in one of its worst years since the 2008 financial crisis. The industry is essentially flat for the year, following an average loss of about 2% by stock funds during the first two weeks of December, according to industry research firm HFR. By contrast, the S&P 500 index is up 10.48%, including dividends, through the same period. The most recent round of pain for many hedge funds began with the Nov. 27 decision by the Organization of the Petroleum Exporting Countries to keep pumping oil despite a glut, triggering the fastest selloff in crude prices since 2008. The price of U.S. oil fell below $60 a barrel for the first time in five years this month, punishing currencies of big oil exporters around the world. On Thursday, oil fell further, down 4.2%, to settle at $54.11 a barrel, on the New York Mercantile Exchange, its lowest level in more than five years. Those caught flat-footed by the price pullback include Prosperity Capital Management's Mattias Westman, a longtime investor in Russia whose firm lost more than $1 billion this year, in part on stakes in Russian energy companies OAO Gazprom, OAO Bashneft and Lukoil Holdings. He now manages about $2 billion, down from $4 billion at the start of the year, as some investors also pulled funds. Some losses are tied to the ruble's fall against the dollar. "It's quite unfortunate," said Mr. Westman, who bet that OPEC's decision to maintain crude output levels wouldn't affect prices as significantly as it did because such a move had been flagged previously. Some hedge funds were on the right side of falling oil prices. London-based Andurand Capital Management LLP, run by former Goldman Sachs Group Inc. and Vitol Inc. oil trader Pierre Andurand, is up 33% through Dec. 12, according to a person familiar with the firm. The $400 million Andurand firm had bet on a fall in crude-oil prices, wagering that OPEC wouldn't cut output, the person said. Brazilian private-equity firm 3G Capital, which bought ketchup maker H.J. Heinz Co. with billionaire investor Warren Buffett, recently launched a hedge fund that is up more than 20% for the year through November on the back of a similar prediction, according to an investor presentation. The fund is run by Dan Dreyfus, a former longtime proprietary trader for Goldman Sachs. While some funds appear to have escaped big hits after reducing exposure to energy and related investments, large losses have hurt some specialized funds. Dorset Management Corp.'s energy fund, which managed nearly $300 million as of July, was down 34% for the year through Dec. 12, according to an investor. UFG Asset Management's $90 million Russia Select Fund was down about 31% through mid-December, compared with a roughly 47% drop for the period for the MSCI Russia index, which has been hurt in part by the tumble in crude. Mr. Paulson's bet that shale-energy producers would consolidate existed in more than one of his funds, said clients. At the end of the last quarter, according to FactSet, Paulson was the biggest holder of Whiting Petroleum Corp. and Oasis Petroleum Inc., big producers in the Bakken, one of North America's most prolific shale fields. The firm also held shares of other producers. Whiting is down from $77.55 to $31.91 since Sept. 30 through Thursday's close, and Oasis is down from $41.81 to $16.25 over the same period. A hedge intended to protect Paulson & Co. from a drop in oil prices hasn't worked fully because the hedge, a wager against at least one oil-stock index, hasn't fallen nearly as much as the smaller companies the fund owned, according to an investor in the fund. That is because larger energy producers in the index have held up better than the shale-focused companies Paulson owned, the person said. Credit: By Juliet Chung, Gregory Zuckerman and David Benoit
Subject: Petroleum industry; American dollar; Economic crisis; Losses; Crude oil prices; Institutional investments
Location: United States--US
People: Icahn, Carl C
Company / organization: Name: Icahn Associates; NAICS: 523910; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Talisman Energy Inc; NAICS: 211111
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8130: Investment services
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 1 9, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637861115
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637861115?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russian Ruble Rises Slightly; Currency Lifted as Oil Price Steadies and Finance Minister Forecasts Rebound
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
In an attempt to beef up the banking system, hurt by the rate hike and Western sanctions resulting from Russia's behavior in Ukraine, the finance ministry plans to inject 1 trillion rubles ($16.8 billion) by placing treasury bonds at banks' accounts.
Full text: MOSCOW--Russia's embattled ruble strengthened a little on Friday as overnight lending rates soared and authorities scrambled to shore up the banking system, which has been hammered by financial instability. Though the currency--down some 50% against the dollar this year--seems to have steadied for the moment after wild swings at the start of the week, the repercussions are still echoing around the economy and forecasters say it is still early to declare victory. The ruble strengthened more than 3% on Friday on the Moscow Exchange from its Thursday close, dipping under 60 to the U.S. dollar as the price for oil, Russia's main source of export dollars, steadied. The currency has become increasingly volatile since Russia's central bank let it float last month rather than continue spending billions of dollars to ease a slide driven by Western sanctions and falling oil prices. The central bank tried to stem the ruble's slide by early on Tuesday. But the move sparked a sell-off on the bond market and sent money-market rates surging. The MosPrime overnight rate, which reflects the cost of borrowing rubles on the interbank market, soared to 25% Friday from 11.8% last week. Andrei Belousov, a chief economic adviser at the Kremlin, said Friday the market is suffering from a lack of ruble liquidity, and that the central bank is working on ways to prevent a wider liquidity crisis. Analysts said the sudden rate hike raised concerns among businesses about the central bank's consistency and credibility. "The central bank must communicate at all levels on how and why it will change rates...A sudden rate hike two days after the central bank's monetary meeting has destroyed trust in the regulator," said Petr Milovanov, a dealer at Metallinvestbank in Moscow. "Now the market does not know either the future level of the exchange rate or rate levels. All these risks will be priced in by businesses, and one should hardly expect macroeconomic stability in such conditions," Mr. Milovanov said. Russia's economy is set to slide into recession next year for the first time since 2009, and the massive monetary tightening, also aimed at taming consumer inflation that has almost reached double-digit readings, will cause further damage. Danske Bank said in a research note that the money-market squeeze will continue, keeping ruble liquidity low "to make Russian consumers happy with a stronger ruble" during the Christmas and New Year holidays. But stabilization of the ruble will take its toll on the economy. Danske said it now sees Russia's economy shrinking by 7.9% next year compared with its previous forecast of a 1.8% drop in GDP. That compares with the central bank's forecast of stagnation if oil recovers to $80 per barrel or a contraction of up to 4.7% should the price stay around $60. In an attempt to beef up the banking system, hurt by the rate hike and Western sanctions resulting from Russia's behavior in Ukraine, the finance ministry plans to inject 1 trillion rubles ($16.8 billion) by placing treasury bonds at banks' accounts. This will add around 13% to the capitalization of the country's banking system, Finance Minister Anton Siluanov said Friday. Some parliament members spoke against more budget spending to strengthen banks. Andrei Makarov, chairman of parliament's budget committee, called lawmakers who opposed the measure "Bolsheviks." "You are calling for 1917," Mr. Makarov was quoted as saying by Russian news agencies. This injection is likely to result in a budget deficit of up to 1% of gross domestic product this year, compared with earlier expectations of a 0.4% surplus, the finance ministry forecasts. Mr. Siluanov also said Friday he sees no risk from selling excessive holdings of foreign currency, as the ruble is set to rebound in early 2015, Interfax news agency reported. The finance ministry said Thursday it was ready to sell as much as $7 billion to stabilize the ruble after the central bank's monetary tightening on Tuesday. The central bank has also intervened this month but sparingly in order to protect its more-than $400 billion in reserves, a strategy endorsed Thursday by President Vladimir Putin. VTB Capital said it expects the ruble to strengthen in the coming days as exporters sell foreign-currency revenue to pay taxes at the end of the month, but warned that demand for dollars and euros and remains a key risk. Russians have in recent days rushed to exchange their rubles for foreign currency or durable, mostly imported goods such as electronics and furniture. Some firms are already hiking prices or halting sales until the ruble stabilizes. The Retail Companies Association, which unites 37 Russia's largest retailers, agreed to allow suppliers to revise prices every 14 days, rather than 45 days. The retailers and their suppliers agreed to try limiting a rise in prices of what are deemed socially important goods to no more than 30% in the next three months. SDS Foods, which sells tea in Russia, told its partners it is raising prices by up to 20%, as it buys tea in India and Sri Lanka for dollars. "We had waited and hoped that the situation will improve but the trend is still negative and is getting worse and worse," said Olesya Karpacheva, head of marketing and business at SDS Foods. "There was a forecast back in March that the dollar will cost 50 rubles, and that seemed impossible. But now the conditions that we are living in are worse.". Write to Andrey Ostroukh at Credit: By Andrey Ostroukh
Subject: Central banks; Banking industry; Energy economics; Budget deficits; Recessions; Economic growth; Gross Domestic Product--GDP
Location: Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637864708
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637864708?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Why the Oil Rout Has Spread; Economists See Benefits of Cheaper Oil. But Before the Gain, Markets Feel the Pain
Author: Whittall, Christopher; Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract: None available.
Full text: This month's big fall in the price of oil should be good news for much of the world's economy. But so far markets have been telling a different story. The U.S. crude contract for January rose $2.41, or 4.5%, to settle at $56.52 a barrel on the New York Mercantile Exchange on Friday, its largest percentage gain in more than two years. Despite Friday's jump, however, oil futures remain far below recent highs, with Brent crude down about 47% from its June peak of $115 a barrel. Other markets have followed suit. The MSCI Europe index has dropped 4% since early December, while the S&P 500 index remains 1% lower over the same period despite a rally Thursday after the Federal Reserve said it would before raising interest rates next year. Emerging-market countries such as Turkey and India, which are large oil importers and so should benefit from the price slump, have seen their currencies fall sharply against the U.S. dollar. Analysts remain confident that cheaper oil is merely a case of delayed gratification for the global economy. Consumers will have more money in their pockets, and companies outside the energy sector will benefit from lower costs. Credit Suisse economists calculate this is equal to a $100 billion tax cut for the U.S. economy alone. But though the boon is substantial, it will take awhile to feed through to economic data. Meanwhile, the effect of investors dumping stocks and bonds related to the energy sector has rippled across financial markets. "Markets will take the hit before economies get the benefit," said Ewen Cameron Watt, global chief investment strategist at BlackRock Inc., the world's largest money manager, with $4.3 trillion of assets. Oil exploration and production are costly activities, and U.S. energy companies in particular haven't shied away from tapping financial markets to raise cash. Energy companies now account for 17% of U.S. high-yield and 12% of investment-grade bonds. They also make up 9% of the MSCI Emerging Markets index, and 8% of both the S&P 500 and MSCI Europe stock indexes. Stocks and bond markets consequently fell when oil first dipped below $100 in September, with energy companies leading from the front, before staging a rapid recovery the following month as oil prices appeared to stabilize around $85. When oil's free fall shifted up another gear in late November, once again it was energy-related assets that led the downward lurch. Master limited partnerships, publicly traded securities that don't pay corporate income taxes, took a hammering. NGL Energy Partners LP, an MLP, fell 31%. High-yield bond funds slumped, experiencing $3.8 billion of outflows last week, which amounts to 0.8% of assets under management, according to Bank of America Merrill Lynch. The yield on Barclays's U.S. Corporate High Yield Bond index rose to 7.3% Tuesday--over a percentage point higher than at the start of the month. Yields rise as prices fall. Mark Haefele, global chief investment officer at UBS Wealth Management, which oversees around $2 trillion of assets, believes U.S. high-yield bond default rates could rise above 5.5%, from around 2% currently, if WTI crude oil remains below $60 a barrel. With WTI now at $58, he is reducing his exposure to the sector. The heavy weighting of major oil companies such as BP PLC and Royal Dutch Shell PLC have dragged down the UK's FTSE 100 index 2.7% so far this month, taking its year-to-date performance into negative territory. The rot even spread to emerging markets that are expected to benefit from the oil-price slump. The Indian rupee dropped 2.7% against the U.S. dollar over the first half of the month, while the Turkish lira sank 7.2%. "At what price does falling oil create more financial distress than it produces economic benefits? That is the question markets have been trying to focus on in the past couple of weeks," said Toby Nangle, head of multiasset investment at Threadneedle Investments, which handles £93 billion ($145.7 billion) of assets. One problem is that the lower oil price is reinforcing the possibility of a default by Russia, notes François Savary, who oversees about $10 billion of assets as chief investment officer at Swiss bank Reyl. "That would have an impact on financial institutions and economic activity in Europe, and it is making people nervous," he said. But despite the current skittishness, most analysts still believe the impact of lower oil prices on the real economy will be positive. In the U.S., for instance, the gain for consumers is predicted to outweigh any loss in energy-related investment, which was only around 1% of gross domestic product in 2013, according to Morgan Stanley. "At the global level we think a lower oil price is very good for growth, although there are regional implications," said Ric Deverell, head of global fixed income and economics research at Credit Suisse. "The problem is the costs are upfront and the benefits are more diffuse: Everyone saves $10 a week filling up their car, while high-yield bonds in the U.S. get hit [more immediately]." Europe, as an oil importer, should benefit, too. As a result, the selloff in European stocks piqued the interest of some investors. European equities should also get a leg up if the European Central Bank decides to make to ward off deflationary pressures, which lower oil prices will exacerbate. "Some investors see this as a good entry point--there is buy-in for monetary policy having a very positive impact on European stocks," said Stephane Mattatia, global head of the macro group at Société Générale. There already are signs of investors putting money to work. Global stock markets rebounded in the latter half of the week following the Fed's dovish statement Wednesday and the stabilization of oil prices around $60. But Mr. Deverell, for one, believes markets will have to get used to permanently lower oil prices. Write to Tommy Stubbington at Credit: By Christopher Whittall and Tommy Stubbington
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1637906136
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1637906136?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Price Fall Sees Eni Selloff Put On Hold; With Shares Down 25%, Government Delays Privatization
Author: Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
Since Mr. Renzi's statement, Eni has lost a quarter of its market value and Enel has shed 8%.
Full text: Another casualty of oil's collapse in recent months: Italy's plans to make a dent in its national debt by selling about 4.5% of oil and gas company Eni SpA. With Brent crude, the global oil benchmark, down by half since June and Eni shares about a third lower, the sale of the stake in Italy's largest company by market value has become unlikely, at least in the short term. In late August the government was aiming by year-end to sell the Eni stake, which has a market value of about [euro]2.4 billion ($2.95 billion), as well as 5% of Enel, Italy's dominant utility. The sale of part of the government's 30% holding in Eni was a key part of a government program to raise about [euro]11 billion from privatizations this year and in each of the next two years in a bid to reduce Italy's national debt, equal to about 135% of gross domestic product, the highest in the European Union after Greece. Volatile equity markets were already putting up road blocks to that plan. The collapse of the price of oil has forced the government to rethink its strategy. The government has never officially taken the sale of Eni off the table, although Italian Prime Minister Matteo Renzi in September seemed to take a step back when he told a newspaper that "the privatizations will be done and the targets will be respected, but I'm not convinced that we need to start with Eni and Enel." He said "I don't see it as a priority to reduce the state's holding in two companies that have great potential, their share prices can still grow." Since Mr. Renzi's statement, Eni has lost a quarter of its market value and Enel has shed 8%. Italy had also been planning this year to sell a 40% stake in Poste Italiane, the national postal service that also has a large bank division, and almost half of air traffic control operator Enav. Both sales have been pushed to next year, further complicating the government's debt reduction plans. Government officials first mooted the idea of an initial share sale for Poste Italiane at least five years ago. In the hopes of making up for the fewer than expected asset sales this year with a bumper 2015, the government also recently said that next year it would sell about 40% of Ferrovie dello Stato, the national railway company. A spokesman for the economy ministry said Italy will respect its privatization target--an average annual sale of assets worth 0.7% of gross domestic profit this year and the next two years--but declined to comment on whether the Eni stake will be sold. The Enel stake will be sold when the market price is right, the spokesman said. Eni and Enel declined to comment. Selling stakes in large Italian state-owned companies has often led to national hand-wringing and cries that the country was dumping its best assets at fire-sale prices. The Italian government's stake in Eni has been unchanged for 13 years while its holding in Enel has been static for almost a decade with successive administrations steering clear of tackling the thorny issue of privatization. While both Eni and Enel have more than two-thirds of their shares publicly traded and are run day-to-day without any direct intervention from the state, the government still plays an important role by naming the chief executive and chairman of both companies. Moves that lead to job cuts, difficult to carry out at any large Italian company, are even more onerous for Eni and Enel to pull off. Eni, for example, has long wanted to shutter several of its domestic refineries, but has been unable to do so because of the job cuts that would ensue. While the plunge in oil prices has dragged down the market value of Eni, and the amount of money Italy could raise by selling a stake, it might, nevertheless, give a boost to the Italian economy, which relies on the importation of most of the raw materials it uses, including oil. Some economists estimate that if oil stabilizes at about $60 a barrel, its current price, Italy's sclerotic economy could grow an additional 0.5% a year. Giada Zampano contributed to this article. Write to Eric Sylvers at Credit: By Eric Sylvers
Subject: Acquisitions & mergers; Privatization
Location: Italy
People: Renzi, Matteo
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638013822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638013822?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada Inflation Slows in November; Plunging Oil Prices Drive Down Gasoline Costs
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract:
OTTAWA--Canada's consumer price index had its biggest monthly decline in almost two years in November as plunging oil prices drove down gasoline costs, signaling the dramatic decline in crude is having a marked impact on domestic inflation.
Full text: OTTAWA--Canada's consumer price index had its biggest monthly decline in almost two years in November as plunging oil prices drove down gasoline costs, signaling the dramatic decline in crude is having a marked impact on domestic inflation. The monthly drop resulted in a sharper-than-expected slowdown in the annual rate of inflation, Statistics Canada Friday. Core prices, which exclude some energy and food costs, also posted a surprising drop on a monthly basis, leading to an unexpected deceleration in the year-on-year inflation rate. The report gave weight to the Bank of Canada's contention that a surprise uptrend in inflation in recent months to beyond its 2% target was transitory. It will also bolster expectations the Canadian central bank will trail the U.S. Federal Reserve in raising interest rates. The data suggested Canada may be starting to join other major economies that are seeing an oil-driven inflation slowdown as the price of crude oil plumbs lows unseen since 2009 during the global recession. Canada had thus far been an outlier on the inflation front, with an inflation rate that was the highest in the industrialized world. "I think the major takeaway is, it lends some serious support to the Bank of Canada's long held view that much of the rise in inflation earlier was transitory," said Douglas Porter, chief economist of BMO Capital Markets. The data give the central bank "a bit more wiggle room" to continue keeping its key interest rate at the 1% level where it has stood for more than four years, the longest stretch since the 1950s, Mr. Porter said. The monthly headline consumer price index declined 0.4% from October, the sharpest drop since December 2012, and the annual pace slowed to 2.0% from 2.4%. This was largely due to cheaper gasoline, which cost 5.6% less than in November 2013. The monthly core CPI dropped 0.2%, the most since December 2013, and the annual rate slowed to 2.1% from 2.3%. Market expectations had been for the monthly headline CPI to drop 0.2% and the annual rate to grow 2.2%, according to a report from Royal Bank of Canada. The core CPI had been expected to rise 0.1% on a monthly basis and quicken to 2.5% annually. BMO's Mr. Porter said it's a "foregone conclusion" the headline rate will head lower in the short-term on falling gasoline prices. But the Bank of Canada will likely look through this as it's the core rate that is important for the central bank, and this measure is holding at around the 2% mark, he said. The central bank sets rates in order to achieve a 2% inflation rate and uses the core measure as an operational target. Some economists predict the Canadian central bank may be forced to delay rate hikes to beyond 2015, well after the Fed moves, if oil prices don't recover. Canada is a net exporter of oil, which makes up roughly 20% of the country's total shipments. Write to Nirmala Menon at Credit: By Nirmala Menon
Subject: Consumer Price Index; Monetary policy; Inflation; Central banks
Location: Canada
Company / organization: Name: Statistics Canada; NAICS: 926110; Name: Royal Bank of Canada; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638170419
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638170419?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices Could Affect Supply, Pemex CEO Says; Mexican Company to Offer Foreign Companies Greater Share of Projects
Author: Pérez, Santiago; Luhnow, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--State oil company Petróleos Mexicanos, buffeted by the recent drop in oil prices, plans to offer international oil companies a greater share of projects in Mexico than initially envisioned and speed up joint ventures with private firms, CEO Emilio Lozoya said on Friday. "This puts pressure on us to get the joint ventures going," Mr. Lozoya said in an interview. As oil companies around the world cut costs and investments to offset the damage from lower prices, the idea behind the acceleration of joint-ventures "is to make sure that Pemex's capital expenditure plans for exploration and production are the least affected," Mr. Lozoya added. Asked about international oil prices, the Pemex boss said the drop in oil prices could affect supplies as some leveraged oil producers operating in the U.S. face rising headwinds. "The faster the fall in oil prices, the faster they will recover," he said. As part of Mexico's historic opening of its oil and gas market--closed to private firms since 1938--Pemex got to keep roughly 80% of the country's existing oil and gas assets, with private oil firms expected to start bidding for rights to exploit the rest starting next year. But Pemex has always planned to open up parts of its own portfolio to joint ventures with private firms. With prices falling, Pemex will speed up the process of finding partners for some of its existing projects. There may be some cases where Pemex was planning to have a majority stake in the field, but will now choose to have a minority stake, a Pemex official said. The state firm is also looking for partners to roll out pipelines, build storage terminals and industrial facilities such as power plants or fertilizer production sites, Mr. Lozoya said. "The opportunities for international oil companies in the rest of the chain are going to be bigger," he added. Global financial markets took a beating in recent days as benchmark crude prices tumbled to five-year lows, hitting key oil exporters such as Russia and Venezuela and forcing global oil firms to tighten their belts. Mexico's federal government relies on oil and related taxes for about one-third of federal revenue. The price of Mexico's crude fell to $48.43 a barrel on Thursday, down 47% from a year ago. But Mexico finds itself in a good position for now--the Finance Ministry hedged the country's production exports for this upcoming year at $76 per barrel. The drop in oil prices comes as the country prepares to launch its first round of auctions for oil and gas blocks near the nation's top-producing fields in the Gulf of Mexico. The Pemex chief said he didn't think the plunge in the price of oil would negatively affect global interest in Mexico's opening. "The information I have is that interest continues," he said. "And a major reason is that Mexico has production costs that are far below the price of oil...at $22 per barrel." This year's drop in oil prices comes as Pemex's production has continued to decline. The state company produced under 2.4 million barrels a day of crude oil in recent months, down from 2.5 million in 2013. Mr. Lozoya said Pemex is investing record amounts this year and next as the company plans to spend some $57 billion to look for oil in the deep waters of the Gulf of Mexico, expand gas pipelines, and upgrade refining plants. "This is going to support economic growth in Mexico," he added. The stakes are high for Pemex, which is overhauling its strategy and management model to prepare for competition with foreign firms amid adverse market conditions. "We are conducting big changes in how we work," Mr. Lozoya said. These include a centralized procurement system for all of Pemex's units, which has resulted in savings between $660 and $900 million this year. "If oil prices were at $200 a barrel, the pressure for change wouldn't be the same," Mr. Lozoya said. Write to Santiago Perez at and David Luhnow at Credit: By Santiago Pérez And David Luhnow
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 19, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638258192
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Obama on Oil Markets; Supply and demand seem to be elusive concepts.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Dec 2014: n/a.
Abstract:
[...]it also overlooks that refiners on the Gulf Coast can handle Canada's heavy crude, which means more lighter crude from the Bakken and Eagle Ford Shales would be available to export onto the global oil market.
Full text: President Obama was trained in law, not economics, but we'd have thought he'd have picked up at least some basic knowledge about the dismal science in his six years in the White House. It sure didn't sound like it based on his soliloquy about oil markets in his end-of-year Friday press conference. The President was asked what he might do if the new Congress sends him a bill approving the Keystone XL pipeline. Mr. Obama dodged that one. But he did ruminate at length on the market impact of "Canadian oil" that he said would be the only oil flowing through the pipeline. "At issue in Keystone is not American oil," he said, conveniently omitting that American oil from the Bakken Shale in North Dakota will also flow via the pipeline. But let's be generous and assume he's misinformed. Mr. Obama's market analysis is more remarkable and worth quoting at length: "So there's no--I won't say 'no'--there is very little impact, nominal impact, on U.S. gas prices--what the average American consumer cares about--by having this pipeline come through. And sometimes the way this gets sold is, let's get this oil and it's going to come here. And the implication is, is that's going to lower gas prices here in the United States. It's not. There's a global oil market. It's very good for Canadian oil companies and it's good for the Canadian oil industry, but it's not going to be a huge benefit to U.S. consumers. It's not even going to be a nominal benefit to U.S. consumers." Let's break that down. The oil market is global, but somehow adding to the global supply of oil via the pipeline is not going to affect the global price for oil, so it won't affect American gasoline prices. That doesn't seem to pass the basic supply-demand test. But it also overlooks that refiners on the Gulf Coast can handle Canada's heavy crude, which means more lighter crude from the Bakken and Eagle Ford Shales would be available to export onto the global oil market. If global supplies increase, all other things being equal, the global oil price would fall for everyone--including American consumers.
Subject: Pipelines; Petroleum industry
Location: United States--US North Dakota
Company / organization: Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 20, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638301602
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638301602?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
WEEKEND INVESTOR --- The New Basics: The Other Energy Pullback --- Many Clean-Energy Investments Are Following Oil Down
Author: Moyer, Liz
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Dec 2014: B.8.
Abstract:
A large-scale shift to solar, wind and other energy sources will take time. [...]falling oil prices could slow the adoption of alternatives by making some of them economically undesirable or impractical.
Full text: These are dark days for investors in Big Oil. That doesn't mean clear skies for investors in clean energy. The sharp plunge in oil prices has dragged down the share prices of many global energy giants. But a number of companies that provide alternatives to fossil fuel have taken a similar hit. U.S. oil prices have fallen 15% this month through Friday, and the $10.6 billion Vanguard Energy Fund, a mutual fund that holds shares in large oil and gas producers, has fallen 3%. In the same period, the New Alternatives Fund, one of the largest mutual funds focused on alternative energy, is down 4.7%. Government policies and social acceptance may support the investment argument for more environmentally friendly energy sources. But investors who worry about the outlook for traditional energy providers -- or who don't want to support the industry with their investments -- should be alert to the risks of investing in clean energy and consider other options, such as putting money in funds that simply avoid oil and gas producers, financial advisers say. A large-scale shift to solar, wind and other energy sources will take time. Moreover, falling oil prices could slow the adoption of alternatives by making some of them economically undesirable or impractical. "It's a very volatile sector," says Harris Roen, who publishes research on alternative-energy investments in the Burlington, Vt.-based Roen Financial Report. "For a portion of someone's portfolio, the more speculative portion, it's fine. There is the potential for big gains. But short-term, there is a lot of flux. You have to be prepared for that." High-profile investors have gained widespread attention this year for making plans to dump investments in fossil fuels or bet on clean energy. The Rockefeller family announced in September that it would shed its holdings in coal and other fossil fuels. Billionaire investor Warren Buffett said in June that Berkshire Hathaway, the company he heads, plans to double an existing $15 billion commitment to renewable-energy projects, including wind farms. Many people are drawn to such investments both because of social aims and potential profits. Environmental factors, such as clean and renewable energy, are incorporated into the management strategies of 672 mutual funds, hedge funds and other investment funds that collectively have $2.9 trillion in assets, according to the Forum for Sustainable and Responsible Investment's annual report. The New Alternatives Fund, whose largest holdings include Brookfield Renewable Energy Partners, which operates renewable-power facilities, and NextEra Energy Partners, which owns an array of clean energy projects, is up 1% this year. The fund has $171.3 million in assets as of Nov. 30, according to Chicago-based investment-research firm Morningstar. It charges 1.16% in annual fees, or $116 on a $10,000 investment, as well as a sales charge of up to 4.75%. Accrued Equities, an investment firm that runs the New Alternatives Fund, says it will introduce a similar mutual fund that carries no sales fee next month. The Guggenheim Solar exchange-traded fund, the largest ETF that focuses on alternative energy, includes Hanergy Thin Film Power Group, a solar-energy firm, and SunEdison, a semiconductor and solar-technology company, among its largest holdings. The fund has $262 million in assets, and charges 0.7% in annual fees. The fund is down 4.2% this month and down 2.7% so far this year. The recent pullback across the energy sector could provide an opportunity to invest in alternative energy at a discount, says Tom Moser, a financial adviser with High Impact Investments in Marana, Ariz., who specializes in the sector. "We are not at the point where the big energy companies are going away," he says. "But this is a transition. If one goes out 10 years from now and looks backward, they will probably say to themselves, 'I should have seen it.'" Still, the portfolios that Mr. Moser recommends to clients are diversified across dozens of stocks, and include both alternative-energy firms, such as Sun Edison, and companies that emphasize sustainability but that aren't directly involved in producing energy, such as Lifeway Foods, a health-food purveyor. Energy and organic food "are like kissing cousins," he says. Some funds avoid fossil fuels but don't particularly focus on alternative energy, and therefore may avoid much of the pain or gain that can be associated with energy stocks. For example, the Pax World Growth Fund says that it "strives to be fossil-fuel-free" by not investing in companies whose mission is to extract or refine fossil fuels, according to the prospectus. The fund holds shares of other large mainstream companies, such as Apple, PepsiCo and Google. The fund is down 0.8% this month and up 11% this year. It has $202.8 million in assets and charges 1.24% in annual fees. Credit: By Liz Moyer
Subject: Mutual funds; Energy policy; Alternative energy sources; Petroleum industry
Location: United States--US
People: Buffett, Warren
Company / organization: Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210; Name: New Alternatives Fund; NAICS: 525120
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.8
Publication year: 2014
Publication date: Dec 20, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638445129
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638445129?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japan Oil Refiner Idemitsu Kosan in Talks to Buy Showa Shell
Author: Narioka, Kosaku; Iwata, Mari
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Dec 2014: n/a.
Abstract: None available.
Full text: TOKYO--Japan's second-biggest oil refiner and distributor, Idemitsu Kosan Co., says it is in talks to buy industry peer Showa Shell Sekiyu K.K. as falling domestic oil demand pinches the margins of wholesalers. Oil-refining and wholesale businesses in Japan have been struggling in recent years because oil consumption has fallen on the back of declining population and increased use of energy-efficient vehicles. The Japanese government has called for oil refiners to reduce supply capacity and consolidate businesses. Idemitsu Kosan and Showa Shell would together make up about 30% of the domestic gasoline market, which is just short of the 34% share held by JX Nippon Oil & Energy Corp., a unit of JX Holdings Inc. The market capitalization of Showa Shell--No. 5 in the industry by sales--was about ¥380 billion (US$3.2 billion) as of Friday. The Nikkei business daily reported Saturday--without citing sources--that Idemitsu Kosan is in final-stage talks to buy Showa Shell for an estimated ¥500 billion. An Idemitsu spokeswoman said the company is in talks with Showa Shell and buying out the firm is one option. However, she said a buyout isn't the only option under consideration, and that Showa Shell isn't necessarily the only target as the company considers integration of its refining business. A Showa Shell spokesman declined to comment on the Nikkei report. Credit: By Kosaku Narioka And Mari Iwata
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 20, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638498807
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638498807?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Security Fears for Mexican Oil
Author: Montes, Juan; Althaus, Dudley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Dec 2014: B.4.
Abstract:
Since late 2006, some 100,000 Mexicans have been killed in drug-related homicides and an additional 22,000 have gone missing.
Full text: PIEDRAS NEGRAS, Mexico -- The driver for Geokinetics Inc., a Houston-based company surveying for oil and gas in northern Mexico, stopped his pickup truck at the entrance to the firm's base camp and asked the guard: "Hey, buddy. How is your friend?" "Fine," the guard said. "He is still back there." Nearby, a young man wearing a baseball cap and toting an AK-47 assault rifle squatted among the cactus. His job, Geokinetics workers say, is to be a lookout for the local criminal gang known as the Zetas, reporting the movements of company employees and patrolling soldiers. As Mexico opens its energy sector to private investors after 76 years of government monopoly, one of the biggest hurdles for foreign companies coming here isn't geology, regulation or finding skilled workers. It's the vicious drug cartels that virtually control the parts of northern Mexico where experts say there are big deposits of oil and gas. "I'm afraid oil companies coming to Mexico will have to worry about insecurity as much as about drilling," said Carlos Elizondo, an energy expert recently appointed to the board of former state monopoly Petroleos Mexicanos, or Pemex. Geokinetics workers say they have come across human remains while doing exploratory work in the brush near the company's base camp. Last year, two company engineers were kidnapped before being rescued by federal police and Mexican marines. A young female engineer working for another service company in the Chicontepec oil basin in the coastal state of Veracruz was raped several months ago by a gang, according to two service contractors with direct knowledge of the incident who asked not to be named. And, in the six years between January 2008 and March 2014, 12 Pemex workers were kidnapped, according to a document from the attorney general's office obtained through Mexico's transparency institute. A Pemex spokesman said he didn't have definitive figures on kidnappings. "There is not a client whose first or second question is not about the security issue," Luis Fernando Gomar, a Strasburger & Price lawyer in Mexico City who specializes in oil and gas issues, told a recent conference on Mexico's energy opening. "You have to determine the level of risk. It's one of the most important issues out there." Since late 2006, some 100,000 Mexicans have been killed in drug-related homicides and an additional 22,000 have gone missing. While drug-related homicides appear to have declined in the past two years, other crimes such as extortion and kidnapping have risen. Pemex itself is often the target of extortion or theft by organized crime. By illegally tapping into pipelines, thieves stole 9.3 million barrels of oil and gasoline in 2013, roughly 1% of Pemex's total annual output and a 13% increase from the previous year, according to public Pemex records. Not all oil firms coming to Mexico will encounter cartel members. Much of the oil bounty is offshore in the Gulf of Mexico's deep waters. And most big international oil companies say they want to focus exclusively offshore to avoid problems. For those venturing onshore, parts of southern Mexico like Campeche and Tabasco states are relatively safe. This year the government of President Enrique Pena Nieto dispatched 2,000 army troops and 700 federal police to the border state of Tamaulipas to support the more than 10,000 troops already deployed there and in neighboring states. A newly created unit of the federal police will be in charge of helping private oil firms operate in the region, government officials said. Service companies like Geokinetics, which already works here under contract to Pemex, have developed tactics ranging from coded language to the hiring of intelligence and security firms to cope with criminal gangs. "Any company that wants to come here has to be prepared to operate in a highly aggressive environment," said Ignacio Orozco, the head of Geokinetics in Mexico. "An essential first step is to hire a security firm that helps you make contacts with the community and solve critical situations." Francisco Caballero, the head of Geokinetics's base camp, said that heavily armed criminal gangs have occasionally entered the camp to steal. "My advice to oil and gas companies would be: Keep a low profile, don't stick your nose into these people's business, [and] keep your ears open and your mouth shut," Mr. Caballero said. --- Laurence Iliff in Mexico City contributed to this article. Credit: By Juan Montes and Dudley Althaus
Subject: Kidnapping; Murders & murder attempts; Extortion; Engineers; Rape; Energy industry; Petroleum industry; Cartels
Location: Mexico
Company / organization: Name: Petroleos Mexicanos; NAICS: 211111; Name: Strasburger & Price; NAICS: 541110; Name: Geokinetics Inc; NAICS: 211111, 213111, 213112
Classification: 9173: Latin America; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Dec 20, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639330372
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639330372?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude's Rout Spans Markets --- Economists See Benefits of Cheaper Oil, but Before the Gain, Markets Feel Pain
Author: Whittall, Christopher; Stubbington, Tommy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Dec 2014: B.5.
Abstract:
Mark Haefele, global chief investment officer at UBS Wealth Management, which oversees around $2 trillion of assets, believes U.S. high-yield bond default rates could rise above 5.5%, from around 2% currently, if WTI crude oil remains below $60 a barrel. The heavy weighting of major oil companies such as BP PLC and Royal Dutch Shell PLC have dragged down the UK's FTSE 100 index 2.7% so far this month, taking its year-to-date performance into negative territory.
Full text: This month's big fall in the price of oil should be good news for much of the world's economy. But so far markets have been telling a different story. The U.S. crude contract for January rose $2.41, or 4.5%, to settle at $56.52 a barrel on the New York Mercantile Exchange on Friday, its largest percentage gain in more than two years. Despite Friday's jump, however, oil futures remain far below recent highs, with Brent crude down about 47% from its June peak of $115 a barrel. Other markets have followed suit. The MSCI Europe index, for example, has dropped 4% since early December, while the S&P 500 index remains lower over the same period despite a rally after the Federal Reserve said it would be "patient" before raising interest rates next year. Emerging-market countries such as Turkey and India, which are large oil importers and so should benefit from the price slump, have seen their currencies fall sharply against the U.S. dollar. Analysts remain confident that cheaper oil is merely a case of delayed gratification for the global economy. Consumers will have more money in their pockets, and companies outside the energy sector will benefit from lower costs. Credit Suisse economists calculate this is equal to a $100 billion tax cut for the U.S. economy alone. But though the boon is substantial, it will take awhile to feed through to economic data. Meanwhile, the effect of investors dumping stocks and bonds related to the energy sector has rippled across financial markets. "Markets will take the hit before economies get the benefit," said Ewen Cameron Watt, global chief investment strategist at BlackRock Inc., the world's largest money manager, with $4.3 trillion of assets. Oil exploration and production are costly activities, and U.S. energy companies in particular haven't shied away from tapping financial markets to raise cash. Energy companies now account for 17% of U.S. high-yield and 12% of investment-grade bonds. They also make up 9% of the MSCI Emerging Markets index, and 8% of both the S&P 500 and MSCI Europe stock indexes. Stocks and bond markets consequently fell when oil first dipped below $100 in September, with energy companies leading from the front, before staging a rapid recovery the following month as oil prices appeared to stabilize around $85. When oil's free fall shifted up another gear in late November, once again it was energy-related assets that led the downward lurch. Master limited partnerships, publicly traded securities that don't pay corporate income taxes, took a hammering. NGL Energy Partners LP, an MLP, fell 31%. High-yield bond funds slumped, experiencing $3.8 billion of outflows last week, which amounts to 0.8% of assets under management, according to Bank of America Merrill Lynch. The yield on Barclays's U.S. Corporate High Yield Bond index rose to 7.3% Tuesday -- over a percentage point higher than at the start of the month. Yields rise as prices fall. Mark Haefele, global chief investment officer at UBS Wealth Management, which oversees around $2 trillion of assets, believes U.S. high-yield bond default rates could rise above 5.5%, from around 2% currently, if WTI crude oil remains below $60 a barrel. With WTI now at $58, he is reducing his exposure to the sector. The heavy weighting of major oil companies such as BP PLC and Royal Dutch Shell PLC have dragged down the UK's FTSE 100 index 2.7% so far this month, taking its year-to-date performance into negative territory. The rot even spread to emerging markets that are expected to benefit from the oil-price slump. The Indian rupee dropped 2.7% against the U.S. dollar over the first half of the month, while the Turkish lira sank 7.2%. "At what price does falling oil create more financial distress than it produces economic benefits? That is the question markets have been trying to focus on in the past couple of weeks," said Toby Nangle, head of multiasset investment at Threadneedle Investments, which handles GBP 93 billion ($145.7 billion) of assets. One problem is that the lower oil price is reinforcing the possibility of a default by Russia, notes Francois Savary, who oversees about $10 billion of assets as chief investment officer at Swiss bank Reyl. "That would have an impact on financial institutions and economic activity in Europe, and it is making people nervous," he said. But despite the current skittishness, most analysts still believe the impact of lower oil prices on the real economy will be positive. In the U.S., for instance, the gain for consumers is predicted to outweigh any loss in energy-related investment, which was only around 1% of gross domestic product in 2013, according to Morgan Stanley. "At the global level we think a lower oil price is very good for growth, although there are regional implications," said Ric Deverell, head of global fixed income and economics research at Credit Suisse. "The problem is the costs are upfront and the benefits are more diffuse: Everyone saves $10 a week filling up their car, while high-yield bonds in the U.S. get hit [more immediately]." Europe, as an oil importer, should benefit, too. As a result, the selloff in European stocks piqued the interest of some investors. European equities should also get a leg up if the European Central Bank decides to make mass purchases of sovereign bonds next year to ward off deflationary pressures, which lower oil prices will exacerbate. "Some investors see this as a good entry point -- there is buy-in for monetary policy having a very positive impact on European stocks," said Stephane Mattatia, global head of the macro group at Societe Generale. There already are signs of investors putting money to work. Global stock markets rebounded in the latter half of the week following the Fed's dovish statement Wednesday and the stabilization of oil prices around $60. But Mr. Deverell, for one, believes markets will have to get used to permanently lower oil prices. Credit: By Christopher Whittall and Tommy Stubbington
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2014
Publication date: Dec 20, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language ofpublication: English
Document type: News
ProQuest document ID: 1639331272
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639331272?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gulf Oil Exporters Blame Non-OPEC Producers for Glut; Saudi Oil Minister Dismisses Suggestions That OPEC Decision Was Targeted at Countries
Author: Said, Summer; Kent, Sarah; Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Dec 2014: n/a.
Abstract:
Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries--along with speculators and misleading information--for the slump.
Full text: ABU DHABI--Gulf oil officials on Sunday defended OPEC's decision last month to keep , blaming producers outside of the group for the glut of oil on the market that has depressed prices. Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries--along with speculators and misleading information--for the slump. On Nov. 27, OPEC kept its production ceiling intact, sending crude prices plunging. OPEC officials since have said the move was aimed at protecting market share. If the cartel had cut output in a bid to bolster prices, non-OPEC producers may have swept in and stolen customers, Gulf oil ministers have said. OPEC officials have singled out American shale producers as a particular problem. , reducing OPEC exports to the U.S. Non-OPEC producers "will realize that it is in their interests to cooperate to ensure high prices for everyone," Mr. Naimi said. He noted that articles and analyses saying that the kingdom's policies are aimed against one country or another are incorrect. Officials in Iran, Venezuela and Russia have suggested Saudi Arabia was working with the West to depress prices and weaken their governments. "Talking about such alleged conspiracies against our country is absolutely incorrect and indicates a misunderstanding in some minds. Our economy is based on strictly economic strategies, no more, no less," he said. Mr. Naimi added that the oil industry and market will recover from the current situation and that plummeting oil prices won't have a major impact on the kingdom's economy. "One of the main reasons that led to the price fall is the irresponsible production from some of the producers outside the organization [OPEC]," said Suhail Mohamed Faraj Al-Mazrouei, the oil minister for the United Arab Emirates. Kuwaiti Oil Minister Ali Saleh Al-Omair called last month's OPEC decision "a good action, because the action doesn't mean we have to cut and have the others take our part in the market." There should be some form of cooperation between all countries involved in the global energy market, he said, including non-OPEC members. But decisions on production shouldn't hurt the interests of OPEC while benefiting others, he added. "It is not fair that OPEC takes the decision to reduce while the others are producing and investing," Mr. Omair said. Write to Summer Said at summer.said@wsj.com, Sarah Kent at sarah.kent@wsj.com and Asa Fitch at Asa.fitch@wsj.com<mailto:Asa.fitch@wsj.com> Credit: By Summer Said, Sarah Kent and Asa Fitch
Subject: Petroleum industry; Cartels; Prices; Energy industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 21, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638792231
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Railcar Bottleneck Looms for Oil; Changes Proposed for Tank Cars Could Disrupt Crude, Other Energy Shipments
Author: Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Dec 2014: n/a.
Abstract:
The American Petroleum Institute, the oil industry's trade group, declined to comment directly on the Brattle report, but said it has warned the DOT's Pipeline and Hazardous Materials Safety Administration of looming output disruptions and car shortages if the government sticks to deadlines proposed in July.
Full text: One-third of the crude oil hauled from North Dakota's Bakken Shale region by railcars could be forced off the tracks and into expensive truck fleets in the next four years, according to a railcar-industry trade group. The Railway Supply Institute says there aren't enough shops to retrofit cars carrying flammable liquids in time to meet , and that tens of thousands of cars as a result. The U.S. Department of Transportation wants tank cars carrying crude oil to be retrofitted with more puncture-resistant features in two years, and those carrying ethanol to be upgraded in three years. Those carrying other flammable liquids, such as heating oil and chemicals, have five years to be upgraded. "They can't all be modified by the deadline, and the only alternative would be to yank them out of service," said Kevin Neels, a transportation consultant for the Brattle Group, which studied the impact of the proposed regulations for the railway institute, which represents railcar-leasing companies and car manufacturers. The DOT is expected to complete standards and compliance deadlines for tank cars by early next year. Without enough tank cars, producers of oil, ethanol and other flammables could be forced to curtail production or switch to other, more expensive types of transportation, mainly trucks. The oil "is either going to move by trucks or it's going to stay in the ground," said Mr. Neels, adding that expanding the use of pipelines and river barges would provide only limited additional capacity. Greater reliance on trucks would add traffic to congested interstate highways and expose more motorists to flammable cargoes, Brattle says. The American Petroleum Institute, the oil industry's trade group, declined to comment directly on the Brattle report, but said it has warned the DOT's Pipeline and Hazardous Materials Safety Administration of looming output disruptions and car shortages if the government sticks to deadlines proposed in July. The Brattle study estimated that, if implementation of the new regulations starts next year, 33% of the crude oil shipped from the Bakken region by rail, or 177 million barrels a year, would be displaced from North American railroads beginning in 2018, the first year sturdier tank cars would be required for crude oil. Brattle predicts ethanol shipments by rail could fall about 34%, or 109 million barrels, in 2019, if the deadline for upgrading the car fleet is 2018. The report "confirms what many of the shippers have been telling DOT," said Bob Dinneen, president of the Renewable Fuels Association, the trade group for the ethanol industry. "You'd try to find some other way [to ship ethanol], but it's clearly going to cause disruptions." For the oil and ethanol producers alone, transportation costs could rise more than 100% between 2017 and 2024, according to the report. Some industry executives say concerns about repair-shop capacity and service disruptions will evaporate once shop owners expand capacity in response to the new standards. Greenbrier Cos.--a smaller builder of new tank cars--is expanding to retrofit about 2,000 cars a year, up from about 600 now. "We expect others in the market will scale up in a similar fashion," said a spokesman for Greenbrier, which is based in Lake Oswego, Ore. The Railway Supply Institute, based in Washington, D.C., submitted the Brattle Group study to the transportation regulators as part of its last-ditch effort to persuade the government to extend the proposed deadlines. The Pipeline and Hazardous Materials Safety Administration declined to comment on the filing, but said the agency will review it and more than 3,000 other responses on the proposed rules. The government's tougher standards are primarily targeted at 75,000 older tank cars, known as DOT-111s, which have the least crash-resistant components. An oil train with DOT-111s in July 2013, killing 47 people. Most DOT-111s built before 2011 would need extensive modification, including installation of heat-resistant insulation on the outside of the tanks that would be covered with a steel outer jacket. The DOT has recommended thick steel plates for both ends of the tanks, as well as sturdier valves on them. Repair-shop operators say the curved-steel jacket sections must be welded in place manually, and that a car could take 12 weeks to retrofit. The Brattle report said retrofits alone could cost car owners about $2 billion, plus $1 billion in lost revenue from idling cars that aren't upgraded before the deadlines. The group said 6,400 to 6,600 cars can be retrofitted each year, well below the 16,800 cars a year that the DOT assumes. Said Bill Finn, an engineer consultant for the Railway Supply Institute: "It's just not possible to do what they're saying can be done." Laura Stevens contributed to this article. Write to Bob Tita at Credit: By Bob Tita
Subject: Ethanol; Petroleum industry; Railroads; Trucks; Deadlines; Pipelines
Location: North Dakota
Company / organization: Name: Renewable Fuels Association; NAICS: 813910; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Department of Transportation; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 21, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place ofpublication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638835697
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638835697?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Propane, Other Fuel Prices Feel the Burn as Oil Declines; Prices of Natural-Gas Liquids Have Been Hurt; 40% Declines Since September
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Dec 2014: n/a.
Abstract:
The fuels, called natural-gas liquids, are a byproduct of oil and gas drilling and are used to heat homes, fire up grills and make plastics. have been a source of profits for energy producers because their prices, until recently, stayed high even as natural-gas prices dropped.
Full text: Sinking oil prices are taking propane, butane and other products used in the chemicals industry and home heating along with them. The fuels, called natural-gas liquids, are a byproduct of oil and gas drilling and are used to heat homes, fire up grills and make plastics. have been a source of profits for energy producers because their prices, until recently, stayed high even as natural-gas prices dropped. Chemical companies have expanded their U.S. production to take advantage of plentiful supply. But prices for NGLs--which include ethane, propane, butane, isobutane and natural gasoline--have turned sharply lower in recent months. From Sept. 1 to Dec. 15, the price of all the aforementioned NGLs except ethane dropped at least 40%, according to Oil Price Information Service. Ethane prices dropped 23%. Prices for the fuels are closely linked to oil, so a sharp drop in crude prices has exerted downward pressure. A glut in the U.S. is also weighing on these markets. Propane and butane are at more than 10-year lows, down nearly half since the start of September, according to Oil Price Information Service, which tracks these markets. The low cost of propane will help the roughly 5% of American households that use the NGL for heating to save anywhere from 20% to 34% this winter, the U.S. Energy Information Administration said recently. Producers in the U.S. Northeast are likely to be among the biggest losers from the retreat, according to Citigroup Inc. These companies had stepped up drilling in NGL-rich areas in Ohio and Pennsylvania, counting on the fuels to add several dollars to the value of every barrel of oil produced. But pipeline space to carry NGLs out of the region is limited, which is expected to worsen a regional glut, Citi said. "Things look pretty ugly overall," said Francisco Blanch, commodities and derivatives strategist at Bank of America Merrill Lynch. "It really is an amazing amount of supply, and it's very difficult to place fast. That's created consistent selling pressure." Many chemical companies were relying on a cheap supply of NGLs to give them a competitive advantage over companies abroad that rely on the oil product naphtha. But as oil falls and naphtha also becomes cheaper, it erodes some of the competitive advantage NGL users had counted on when they budgeted billions for expansion projects. Surging U.S. operations for LyondellBasell Industries NV and Dow Chemical Co. have made them two of the biggest beneficiaries of the shale boom, but now they could be among the biggest losers of the continuing oil-price crash, Credit Suisse said. LyondellBasell shares have shed 28% of their value since early September; Dow has lost 16%. LyondellBasell's Sergey Vasnetsov, senior vice president of strategic planning and transactions, said his company's U.S. business remains "quite profitable" at current crude oil, NGL and natural-gas prices. Dow has plants around the world that can benefit from low oil prices, its officials said. They also believe investors are wrong to think NGL-fed plants in the U.S. wouldn't have advantages if all those fuels have dropped in price. "The net effect is that in the long term, a more stable oil price and stable markets will drive GDP growth and consumer spending, which is a good thing for Dow," said Mauro Gregorio, Dow's president of feedstocks and energy. Falling NGL prices have been a draw for traders. The number of outstanding propane futures contracts on the New York Mercantile Exchange has quadrupled since May. Propane futures ended Friday down more than 50% for the year. As oil markets collapsed, energy and commodities firm Vitol Group became one of the big NGL sellers, according to people with knowledge of its trading. One of those people said Mercuria Energy Group and BP PLC have also been taking positions that would benefit from falling prices. Vitol and BP declined to comment. Mercuria didn't respond to requests for comment. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Petroleum industry; Chemical industry; Advantages; Prices; Natural gas; Propane
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Dow Chemical Co; NAICS: 325199, 325211, 325180; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 21, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638835699
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638835699?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Shakes Venezuelan Debt to Its Foundations; Venezuela Benchmark Bonds Fell to Record Low Last Week
Author: Hong, Nicole; Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract: None available.
Full text: is hitting Venezuela hard, raising questions among investors about the South American country's ability to pay its debts and heightening concerns about the health of developing economies around the world. Venezuelan debt was widely held by emerging-market investors until the summer. Many viewed the bonds as a safe bet because the country brought in ample revenue as a major oil exporter. But a nearly 50% drop in the price of crude since mid-June has left Venezuela's finances in shambles. The price of credit-default swaps on Venezuela debt, a type of insurance, indicate a 61% chance of default in the next year and a 90% chance in the next five years. The country is an extreme example of the turmoil that sliding prices for oil and other commodities have had on emerging markets, where stocks, bonds and currencies have recently sold off from Russia to South Africa. Venezuela and its state-run oil company, Petróleos de Venezuela SA, known as PdVSA, issued more debt than any other emerging market between 2007 and 2011. Venezuela and PdVSA have $66 billion in outstanding debt, analysts say. Venezuela's woes show how the boom times that drew investors to certain developing economies can quickly evaporate when commodities prices fall. Investors for years were willing to overlook widening budget gaps and rising inflation as they sought higher returns than they could get in developed countries. But now that lower commodities prices have dimmed economic prospects for many countries, money managers are increasingly cautious about where they invest in emerging markets. "High oil prices helped a lot of these countries cover up their problems, and now the tide is going out and the problems are being exposed," said Win Thin, global head of emerging-market strategy at private bank Brown Brothers Harriman & Co. "Venezuela will be the first to fall because it's the weakest...and happens to be the most dependent on oil." Last week, Fitch Ratings cut Venezuela's credit rating deeper into junk territory to CCC from B, citing the Venezuelan economy's limited ability to respond to the sharp fall in oil prices. However, analysts said a default in Venezuela isn't imminent. If the country defaults, it would lose access to international markets, which would cut it off from financing to develop its vast oil and gas deposits. A default could also open the door for investors to seize assets of PdVSA, including oil refineries in the U.S. operated through its Citgo subsidiary. "The cost of defaulting is still too high relative to the benefits," said Carl Ross, a sovereign-credit analyst at Grantham Mayo Van Otterloo & Co., a $120 billion investment firm that owns Venezuelan bonds. "Investors are expecting some sort of positive policy response that allows Venezuela to muddle through." Venezuela's benchmark bonds tumbled to a record low early last week before rising following a modest rebound in oil prices. The benchmark bond was trading at around 46 cents on the dollar Friday, after falling to around 38 cents on the dollar last Monday. Yields on some short-dated PdVSA bonds are above 40%. Bond yields rise when prices fall. A Venezuelan default would be unlikely to spill over into other emerging-market countries. Venezuela is regarded as one of the world's most poorly managed economies, stemming from years of government overspending and a cumbersome currency regime that has deterred investment into the country. Venezuela has emerged as a potential target for hedge funds that specialize in making money off troubled debt. Some are gambling that oil prices will rebound. Others see an upside in default, in which the government would likely swap outstanding bonds for new debt. With some bonds already below 40 cents on the dollar, the restructured debt might be worth more. "If you own Venezuelan bonds, you're not rooting for a restructuring, but you can build a positive argument around it if it does happen," said A.J. Mediratta, co-president of Greylock Capital Management LLC, which participated in debt restructurings by governments in Argentina and Greece. Mr. Mediratta said Greylock began buying Venezuelan bonds this summer. Even before the plunge in oil prices, Venezuela had been in economic crisis. Rigid currency controls and dollar shortages have brought the economy to a standstill and inflation to the highest rate in the world. Polls show President Nicolás Maduro's popularity at a record low 24.5%. Analysts said the low approval rating is why Mr. Maduro has taken only piecemeal actions to deal with declining oil prices. They include increasing taxes on luxury products and using a $4 billion loan from China to boost international reserves, which have fallen near decade lows to $21.4 billion. Venezuela's dwindling reserves make the country more vulnerable than other oil exporters like Russia, which has $414.6 billion in its coffers. "There is no possibility of a default," Mr. Maduro said during a televised speech earlier this month, "unless we decide not to pay anymore as part of our economic development strategy...and that is not the strategy that has been developed in these years." About 67% of Venezuelans say the government should keep paying off its external debts, according to Caracas-based pollster Datanalisis. Mr. Maduro hasn't taken more-drastic steps that analysts say are necessary to right the economy, such as reducing domestic fuel subsidies, loosening foreign-exchange controls and cutting off the cheap oil that Venezuela exports to Cuba and other Caribbean countries. "What we're seeing in the markets is a reaction to the complete lack of response from the government" in the face of the economic problems, said Francisco Ghersi, managing director of the Knossos Fund, which specializes in Venezuelan debt. Corrections & Amplifications A chart accompanying an earlier version of this article transposed the flags of Colombia and Venezuela. (Dec. 22) Write to Nicole Hong at and Kejal Vyas at Credit: By Nicole Hong and Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638836788
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638836788?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Midtier Oil Explorers Suffer With Price Drop; Producers Like Tullow Hold Particular Vulnerabilities
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
Though still the U.K.'s largest oil explorer by market value, Tullow is now valued at less than a quarter of the $22.4 billion it reached at its 2012 peak. [...]recently, London's small and midtier oil companies were attractive to investors looking for big returns as they backed so-called wildcatters.
Full text: LONDON--The day after global crude prices closed at their year high at just over $115 a barrel in June, the champagne flowed freely at Tullow Oil PLC's annual golf outing at an exclusive course near London--for years a summer highlight for the company's bankers, investors and other business contacts. Today, Brent, the international oil benchmark, is trading around $60, and Tullow shares are off more than 50% since the company's June 20 celebration. Founded in 1986 to extract oil and natural gas from old, onshore concessions in Senegal, Tullow and Aidan Heavey, its Irish founder and chief executive, came to embody a global oil boom that lasted the better part of a decade. Now, with oil prices well off their highs, the company points up the particular vulnerabilities of smaller exploration-and-production firms--many of which, like Tullow, are listed in London. Oil industry giants, like Exxon Mobil Corp. and Royal Dutch Shell PLC, are insulated somewhat from volatility in crude prices. They have huge refining and processing businesses that make more money when oil--a feedstock--becomes cheaper. Exploration-and-production, or E&P, outfits like Tullow live or die on oil prices. They typically borrow heavily or raise capital in equity markets to fund expensive exploration, and then rely on the cash flow from developing a big find or look to sell whole or partial stakes in their fields to a bigger player. Tullow's problems started well before this summer. A big discovery off Ghana's coast hasn't lived up to expectations. Hampered by expensive drilling programs, the company's debt has tripled since 2012. Though still the U.K.'s largest oil explorer by market value, Tullow is now valued at less than a quarter of the $22.4 billion it reached at its 2012 peak. Until recently, London's small and midtier oil companies were attractive to investors looking for big returns as they backed so-called wildcatters. More than 100 oil exploration companies are now traded on London markets. Unlike U.S.-based independent oil companies, which are now mostly focused on onshore shale oil and gas production in North America, U.K.-listed wildcatters have targeted more politically risky areas such as northern Iraq and oil-rich countries in Africa. Ophir Energy PLC shared in big exploration successes in offshore gas fields in Tanzania. Gulf Keystone PLC, along with Genel Energy PLC, has spearheaded the oil industry onshore in Iraqi Kurdistan. Cairn Energy PLC made India's largest onshore oil discovery in 25 years. These and other U.K.-listed E&P companies have on average raised around $2 billion in equity each year over the last decade, according to data from Dealogic. "Two to three years ago there was a sense that Tullow, Cairn and Ophir could do no wrong," said Neil Gregson, a fund manager at J.P. Morgan Asset Management. "But it felt like expectations were getting too high," he said. "At the end of the day exploration is a risky business." Now, the funding taps have mostly dried up. U.K.-listed explorers have raised just $342 million in new shares this year, according to data from Dealogic. Meanwhile, about $14.4 billion of value has been wiped out for the U.K.'s top seven E&P companies since June 19. "In the E&P sector, every company is looking vulnerable." said Andy Brogan, Ernst & Young's global oil and gas transactions leader. Tullow founder Mr. Heavey said the company isn't for sale. "I've seen this happen about five or six times," the 61-year-old executive said in an interview. "You just have to ignore it." In 2006, Tullow made five oil discoveries in Uganda, opening up a major new oil province there. It is developing the field with France's Total SA and Chinese state-owned energy giant Cnooc Ltd. Tullow, with partner Kosmos Energy, announced the following year its largest-ever discovery--the Jubilee oil field off Ghana's coast. Jubilee now produces around 100,000 barrels a day gross, about 20,000 barrels less than originally planned due to technical problems. Following on from the discoveries, investors propelled Tullow onto the London Stock Exchange's prestigious FTSE 100 benchmark index. Industrywide, major finds surged from 2009 to 2011, but discovery rates are now back at their long-run average, according to oil consultancy Wood Mackenzie. In 2012 and 2013, Tullow had a number of disappointments--most notably four dry holes in wells in French Guiana. It wrote off a combined $1.5 billion on failed wells in those years. "You can't be finding oil at every well that you drill," Mr. Heavey said. That said, Mr. Heavey last month cut Tullow's annual exploration budget for the first time in its near three-decade history. "You can't keep your head in the sand and just assume the oil price will save you," he said. Write to Selina Williams at Credit: By Selina Williams
Subject: Petroleum industry; Oil exploration; Natural gas; Crude oil prices
Location: United Kingdom--UK Senegal
Company / organization: Name: Genel Energy PLC; NAICS: 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Ophir Energy PLC; NAICS: 211111; Name: Cairn Energy PLC; NAICS: 211111; Name: Tullow Oil PLC; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638843738
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638843738?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Oil-Price Plunge Pressures Tullow, Its Peers
Author: Williams, Selina
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Dec 2014: B.4.
Abstract:
Though still the U.K.'s largest oil explorer by market value, Tullow is now valued at less than a quarter of the $22.4 billion it reached at its 2012 peak. [...]recently, London's small and midtier oil companies were attractive to investors looking for big returns as they backed so-called wildcatters.
Full text: LONDON -- The day after global crude prices closed at their year high at just over $115 a barrel in June, the champagne flowed freely at Tullow Oil PLC's annual golf outing at an exclusive course near London -- for years a summer highlight for the company's bankers, investors and other business contacts. Today, Brent, the international oil benchmark, is trading around $60, and Tullow shares are off more than 50% since the company's June 20 celebration. Founded in 1986 to extract oil and natural gas from old, onshore concessions in Senegal, Tullow and Aidan Heavey, its Irish founder and chief executive, came to embody a global oil boom that lasted the better part of a decade. Now, with oil prices well off their highs, the company points up the particular vulnerabilities of smaller exploration-and-production firms -- many of which, like Tullow, are listed in London. Oil industry giants, like Exxon Mobil Corp. and Royal Dutch Shell PLC, are insulated somewhat from volatility in crude prices. They have huge refining and processing businesses that make more money when oil -- a feedstock -- becomes cheaper. Exploration-and-production, or E&P, outfits like Tullow live or die on oil prices. They typically borrow heavily or raise capital in equity markets to fund expensive exploration, and then rely on the cash flow from developing a big find or look to sell whole or partial stakes in their fields to a bigger player. Tullow's problems started well before this summer. A big discovery off Ghana's coast hasn't lived up to expectations. Hampered by expensive drilling programs, the company's debt has tripled since 2012. Though still the U.K.'s largest oil explorer by market value, Tullow is now valued at less than a quarter of the $22.4 billion it reached at its 2012 peak. Until recently, London's small and midtier oil companies were attractive to investors looking for big returns as they backed so-called wildcatters. More than 100 oil exploration companies are now traded on London markets. Unlike U.S.-based independent oil companies, which are now mostly focused on onshore shale oil and gas production in North America, U.K.-listed wildcatters have targeted more politically risky areas such as northern Iraq and oil-rich countries in Africa. Ophir Energy PLC shared in big exploration successes in offshore gas fields in Tanzania. Gulf Keystone PLC, along with Genel Energy PLC, has spearheaded the oil industry onshore in Iraqi Kurdistan. Cairn Energy PLC made India's largest onshore oil discovery in 25 years. "Two to three years ago there was a sense that Tullow, Cairn and Ophir could do no wrong," said Neil Gregson, a fund manager at J.P. Morgan Asset Management. "But it felt like expectations were getting too high," he said. "At the end of the day exploration is a risky business." Now, the funding taps have mostly dried up. U.K.-listed explorers have raised just $342 million in new shares this year, according to data from Dealogic. "In the E&P sector, every company is looking vulnerable." said Andy Brogan, Ernst & Young's global oil and gas transactions leader. Tullow founder Mr. Heavey said the company isn't for sale. "I've seen this happen about five or six times," the 61-year-old executive said in an interview. "You just have to ignore it." In 2006, Tullow made five oil discoveries in Uganda, opening up a major new oil province there. It is developing the field with France's Total SA and Chinese state-owned energy giant Cnooc Ltd. Tullow, with partner Kosmos Energy, announced the following year its largest-ever discovery -- the Jubilee oil field off Ghana's coast. Jubilee now produces around 100,000 barrels a day gross, about 20,000 barrels less than originally planned due to technical problems. Following on from the discoveries, investors propelled Tullow onto the London Stock Exchange's prestigious FTSE 100 benchmark index. Industrywide, major finds surged from 2009 to 2011, but discovery rates are now back at their long-run average, according to oil consultancy Wood Mackenzie. In 2012 and 2013, Tullow had a number of disappointments -- most notably four dry holes in wells in French Guiana. It wrote off a combined $1.5 billion on failed wells in those years. "You can't be finding oil at every well that you drill," Mr. Heavey said. That said, Mr. Heavey last month cut Tullow's annual exploration budget for the first time in its near three-decade history. "You can't keep your head in the sand and just assume the oil price will save you," he said. Credit: By Selina Williams
Subject: Petroleum industry; Crude oil prices
Location: United Kingdom--UK
Company / organization: Name: Tullow Oil PLC; NAICS: 211111
Classification: 9175: Western Europe; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Dec 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638854517
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638854517?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Corporate News: Railcar Bottleneck Looms Over Oil --- Changes Proposed for Tank Cars Could Disrupt Crude, Other Energy Shipments
Author: Tita, Bob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Dec 2014: B.3.
Abstract:
The American Petroleum Institute, the oil industry's trade group, declined to comment directly on the Brattle report, but said it has warned the DOT's Pipeline and Hazardous Materials Safety Administration of looming output disruptions and car shortages if the government sticks to deadlines proposed in July.
Full text: One-third of the crude oil hauled from North Dakota's Bakken Shale region by railcars could be forced off the tracks and into expensive truck fleets in the next four years, according to a railcar-industry trade group. The Railway Supply Institute says there aren't enough shops to retrofit cars carrying flammable liquids in time to meet proposed federal deadlines, and that tens of thousands of cars will be idled as a result. The U.S. Department of Transportation wants tank cars carrying crude oil to be retrofitted with more puncture-resistant features in two years, and those carrying ethanol to be upgraded in three years. Those carrying other flammable liquids, such as heating oil and chemicals, have five years to be upgraded. "They can't all be modified by the deadline, and the only alternative would be to yank them out of service," said Kevin Neels, a consultant for the Brattle Group, which studied the impact of the proposed regulations for the railway institute, which represents railcar-leasing companies and car manufacturers. The DOT is expected to complete standards and compliance deadlines for tank cars by early next year. Without enough tank cars, producers of oil, ethanol and other flammables could be forced to curtail production or switch to other, more expensive types of transportation, mainly trucks. The oil "is either going to move by trucks or it's going to stay in the ground," said Mr. Neels, adding that expanding the use of pipelines and river barges would provide only limited additional capacity. Greater reliance on trucks would add traffic to congested interstate highways and expose more motorists to flammable cargoes, Brattle says. The American Petroleum Institute, the oil industry's trade group, declined to comment directly on the Brattle report, but said it has warned the DOT's Pipeline and Hazardous Materials Safety Administration of looming output disruptions and car shortages if the government sticks to deadlines proposed in July. The Brattle study estimated that, if implementation of the new regulations starts next year, 33% of the crude oil shipped from the Bakken region by rail, or 177 million barrels a year, would be displaced from North American railroads beginning in 2018, the first year sturdier tank cars would be required for crude oil. Brattle predicts ethanol shipments by rail could fall 34%, or 109 million barrels, in 2019, if the deadline for upgrading the car fleet is 2018. The report "confirms what many of the shippers have been telling DOT," said Bob Dinneen, president of the Renewable Fuels Association, the trade group for the ethanol industry. "You'd try to find some other way [to ship ethanol], but it's clearly going to cause disruptions." For the oil and ethanol producers, transportation costs could rise more than 100% between 2017 and 2024, according to the report. Some industry executives say concerns about repair-shop capacity and service disruptions will evaporate once shop owners expand capacity in response to the new standards. Greenbrier Cos. -- a builder of tank cars -- is expanding to retrofit 2,000 cars a year, up from about 600 now. "We expect others in the market will scale up," said a spokesman for Greenbrier, which is based in Lake Oswego, Ore. The Railway Supply Institute submitted the Brattle Group study to the transportation regulators as part of its effort to persuade the government to extend the proposed deadlines. The Pipeline and Hazardous Materials Safety Administration declined to comment on the filing, but said the agency will review it and 3,000 other responses on the proposed rules. The government's tougher standards are primarily targeted at 75,000 older tank cars, known as DOT-111s, which have the least crash-resistant components. An oil train with DOT-111s exploded in a rural Quebec town in July 2013, killing 47 people. Most DOT-111s built before 2011 would need installation of heat-resistant insulation on the outside of the tanks that would be covered with a steel outer jacket. The DOT has recommended thick steel plates for both ends of the tanks, as well as sturdier valves on them. Repair-shop operators say a car could take 12 weeks to retrofit. The Brattle report said retrofits alone could cost car owners about $2 billion, plus $1 billion in lost revenue from idling cars that aren't upgraded before the deadlines. The group said 6,400 to 6,600 cars can be retrofitted each year, well below the 16,800 cars a year the DOT assumes. --- Laura Stevens contributed to this article. Credit: By Bob Tita
Subject: Petroleum industry; Federal regulation; Railroads; Retrofitting; Crude oil
Location: United States--US
Company / organization: Name: Railway Supply Co Institute Inc; NAICS: 813910; Name: Department of Transportation; NAICS: 926120
Classification: 9190: United States; 4310: Regulation; 8510: Petroleum industry; 8350: Transportation & travel industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2014
Publication date: Dec 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638854956
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638854956?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Shakes Venezuelan Debt to Its Foundations
Author: Hong, Nicole; Vyas, Kejal
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Dec 2014: C.1.
Abstract:
Venezuela and its state-run oil company, Petroleos de Venezuela SA, known as PdVSA, issued more debt than any other emerging market between 2007 and 2011. "High oil prices helped a lot of these countries cover up their problems, and now the tide is going out and the problems are being exposed," said Win Thin, global head of emerging-market strategy at private bank Brown Brothers Harriman & Co. "Venezuela will be the first to fall because it's the weakest.
Full text: A slide in oil prices is hitting Venezuela hard, raising questions among investors about the South American country's ability to pay its debts and heightening concerns about the health of developing economies around the world. Venezuelan debt was widely held by emerging-market investors until the summer. Many viewed the bonds as a safe bet because the country brought in ample revenue as a major oil exporter. But a nearly 50% drop in the price of crude since mid-June has left Venezuela's finances in shambles. The price of credit-default swaps on Venezuela debt, a type of insurance, indicate a 61% chance of default in the next year and a 90% chance in the next five years. The country is an extreme example of the turmoil that sliding prices for oil and other commodities have had on emerging markets, where stocks, bonds and currencies have recently sold off from Russia to South Africa. Venezuela and its state-run oil company, Petroleos de Venezuela SA, known as PdVSA, issued more debt than any other emerging market between 2007 and 2011. Venezuela and PdVSA have $66 billion in outstanding debt, analysts say. Venezuela's woes show how the boom times that drew investors to certain developing economies can quickly evaporate when commodities prices fall. Investors for years were willing to overlook widening budget gaps and rising inflation as they sought higher returns than they could get in developed countries. But now that lower commodities prices have dimmed economic prospects for many countries, money managers are increasingly cautious about where they invest in emerging markets. "High oil prices helped a lot of these countries cover up their problems, and now the tide is going out and the problems are being exposed," said Win Thin, global head of emerging-market strategy at private bank Brown Brothers Harriman & Co. "Venezuela will be the first to fall because it's the weakest. . .and happens to be the most dependent on oil." Last week, Fitch Ratings cut Venezuela's credit rating deeper into junk territory to CCC from B, citing the Venezuelan economy's limited ability to respond to the sharp fall in oil prices. However, analysts said a default in Venezuela isn't imminent. If the country defaults, it would lose access to international markets, which would cut it off from financing to develop its vast oil and gas deposits. A default could also open the door for investors to seize assets of PdVSA, including oil refineries in the U.S. operated through its Citgo subsidiary. "The cost of defaulting is still too high relative to the benefits," said Carl Ross, a sovereign-credit analyst at Grantham Mayo Van Otterloo & Co., a $120 billion investment firm that owns Venezuelan bonds. "Investors are expecting some sort of positive policy response that allows Venezuela to muddle through." Venezuela's benchmark bonds tumbled to a record low early last week before rising following a modest rebound in oil prices. The benchmark bond was trading at around 46 cents on the dollar Friday, after falling to around 38 cents on the dollar last Monday. Yields on some short-dated PdVSA bonds are above 40%. Bond yields rise when prices fall. A Venezuelan default would be unlikely to spill over into other emerging-market countries. Venezuela is regarded as one of the world's most poorly managed economies, stemming from years of government overspending and a cumbersome currency regime that has deterred investment into the country. Venezuela has emerged as a potential target for hedge funds that specialize in making money off troubled debt. Some are gambling that oil prices will rebound. Others see an upside in default, in which the government would likely swap outstanding bonds for new debt. With some bonds already below 40 cents on the dollar, the restructured debt might be worth more. "If you own Venezuelan bonds, you're not rooting for a restructuring, but you can build a positive argument around it if it does happen," said A.J. Mediratta, co-president of Greylock Capital Management LLC, which participated in debt restructurings by governments in Argentina and Greece. Mr. Mediratta said Greylock began buying Venezuelan bonds this summer. Even before the plunge in oil prices, Venezuela had been in economic crisis. Rigid currency controls and dollar shortages have brought the economy to a standstill and inflation to the highest rate in the world. Polls show President Nicolas Maduro's popularity at a record low 24.5%. Analysts said the low approval rating is why Mr. Maduro has taken only piecemeal actions to deal with declining oil prices. They include increasing taxes on luxury products and using a $4 billion loan from China to boost international reserves, which have fallen near decade lows to $21.4 billion. Venezuela's dwindling reserves make the country more vulnerable than other oil exporters like Russia, which has $414.6 billion in its coffers. "There is no possibility of a default," Mr. Maduro said during a televised speech earlier this month, "unless we decide not to pay anymore as part of our economic development strategy . . . and that is not the strategy that has been developed in these years." About 67% of Venezuelans say the government should keep paying off its external debts, according to Caracas-based pollster Datanalisis. Mr. Maduro hasn't taken more-drastic steps that analysts say are necessary to right the economy, such as reducing domestic fuel subsidies, loosening foreign-exchange controls and cutting off the cheap oil that Venezuela exports to Cuba and other Caribbean countries. "What we're seeing in the markets is a reaction to the complete lack of response from the government" in the face of the economic problems, said Francisco Ghersi, managing director of the Knossos Fund, which specializes in Venezuelan debt. Credit: By Nicole Hong and Kejal Vyas
Subject: Bond issues; Credit default swaps; Debt; Crude oil prices
Location: Venezuela
Classification: 9173: Latin America; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 22, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638854983
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638854983?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russian Ruble Firms in Early Trade; Currency Strengthens as Oil Prices Stabilize
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
The central bank data released Monday showed it sold $500 million from the country's international currency reserves to halt the ruble's rapid depreciation last Thursday. Since the beginning of the month the central bank has sold more than $10 billion in a bid to ease pressure on the ruble, which lost around 42% of its value versus the dollar so far this year.
Full text: MOSCOW--The ruble firmed across the board on Monday as oil prices showed some signs of stability. The ruble gained nearly 7% versus the U.S. dollar to 54.5 in the afternoon, its highest since Dec. 11. Against the euro, the ruble firmed by nearly 8% to 66.70. The currency has become increasingly volatile since Russia's central bank let the ruble float last month, with the currency hitting fresh record lows on an almost daily basis until last week, as the price of oil, Russia's key export, plunged below $60 a barrel. The ruble selloff prompted authorities to step in with a combination of verbal and financial intervention. The central bank data released Monday showed it sold $500 million from the country's international currency reserves to halt the ruble's rapid depreciation last Thursday. Since the beginning of the month the central bank has sold more than $10 billion in a bid to ease pressure on the ruble, which lost around 42% of its value versus the dollar so far this year. This week the ruble is expected to get support from monthly tax payments, which usually prompt export-focused companies to convert dollars and euros into rubles to meet local liabilities. Last week President Vladimir Putin to convince them to sell foreign currencies on the market. Write to Andrey Ostroukh at Credit: By Andrey Ostroukh
Subject: Rubles; Currency; Central banks
Location: Russia United States--US
People: Putin, Vladimir
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638855549
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cnooc Unit Suspends Oil Production in Yemen Citing Security Threat; Shutdown Affects Yemeni Assets of Cnooc's Canadian Subsidiary Nexen ULC
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
The shutdown affects the Yemeni assets of Cnooc's Canadian subsidiary Nexen ULC, which operates a crude oil field and processing facility in the country.
Full text: CALGARY--The Canadian unit of China National Offshore Oil Corp., or Cnooc, said Sunday it has halted oil production in Yemen due to an unspecified "security threat" to its personnel in the Arabian country. The shutdown affects the Yemeni assets of Cnooc's Canadian subsidiary Nexen ULC, which operates a crude oil field and processing facility in the country. It comes after the pro-U.S. government of Yemen collapsed in September amid a civil war. "We've determined there is a security threat and undue risk" in Yemen, said a spokesperson for the Calgary-based Cnooc subsidiary. "The shutdown was progressed in a timely manner, production has ceased and our personnel have safely departed," she said. The Yemeni oil ministry wasn't immediately available for comment. Nexen's production is centered at the Bashir al Khair-A field on lease Block 51 in Yemen, a little over 62 miles inland from the Gulf of Aden coast. The company began production there in 2004 and has a 87.5% stake in the field, with the remainder owned by the Yemeni government. Nexen said the move was temporary and that it plans to restart operations once it can be sure that its personnel will be safe. China's state-owned Cnooc, which bought Nexen in late 2012, doesn't report production data for Yemen. In 2011, when it was publicly listed, Nexen said it produced between 6,000 to 8,000 barrels of oil a day in Block 51, about half of which were transferred to the Yemeni government in the form of royalties. Nexen's 18-year lease to Yemen's largest oil project, called Masila or Block 14, expired in 2011 and the operation was taken over by Yemen's government. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Petroleum industry; Petroleum production
Location: United States--US Yemen Gulf of Aden
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638855585
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638855585?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Fall After Early Gains; OPEC Members Defend Refusal to Take Action to Prop up Prices
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
According to Mr. al-Naimi, who is OPEC's secretary-general and its most influential voice, the current market situation is temporary and prices will rebound.
Full text: Crude-oil prices fell Monday, the first day of trading after several OPEC members defended their refusal to take drastic action to prop up prices. Oil officials from several leading members of the Organization of the Petroleum Exporting Countries on Sunday blamed producers outside of the group for the glut of oil on the market that has depressed prices. Oil prices have now fallen by nearly half since mid-June as U.S. shale producers battle Saudi Arabia and its Middle Eastern allies for market share. Light, sweet crude for February delivery was down $1.45, or 2.5%, to $55.68 a barrel on The New York Mercantile Exchange after rallying earlier in the session by more than a percentage point. The February contract for Brent crude, the global benchmark, fell recently by $1.03, or 1.7%, to $60.35 a barrel on London's ICE Futures exchange, after flirting with $63 in morning trade. "The reality of Saudi Arabia and (United Arab Emirates) saying, 'We're cool,' has taken over. It's still a bearish market," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "It comes down to a battle between U.S. shale and Saudi Arabia." Speaking at an energy conference in Abu Dhabi on Sunday, Saudi Arabia's oil minister, Ali al-Naimi, blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the price slump. According to Mr. al-Naimi, who is OPEC's secretary-general and its most influential voice, the current market situation is temporary and prices will rebound. Mr. al-Naimi's comments were echoed Monday by Iraq's oil minister, who said that not to rein in production but to let the market decide the oil price. Prices have plummeted since OPEC decided on Nov. 27 to keep its production ceiling unchanged. "The market doesn't have the momentum to sustain gains right now," said Kash Kamal, research analyst at Sucden Financial. According to Mr. Kamal, the comments by the officials provided some excuse for traders to enter long positions, but they quickly realized that fundamentals haven't changed. "The market is still under pressure, still oversupplied. It's business as usual." Volatility in the oil market rose in December with the OVX index rising to its highest level since the inception of the series in 2012, the National Australia Bank said in a note. The OVX index measures the market's expectation of 30-day volatility of WTI crude prices. Last week provided a practical primer on volatility with a pattern emerging in which early gains have been whittled away over the course of the day. On Thursday, crude had rallied by as much as 3% in early trade only to see the gains pared as negative sentiment overwhelmed the market. Despite a rally on Friday, the price WTI crude fell 2.2% for the week, the fourth consecutive week of declines. During those four weeks WTI lost more than 26%, the largest percentage decline for that time period since the week ended Dec. 26, 2008. Monday's early gains appeared to suffer the same fate, with an early rally sputtering by midday in Europe. Nymex reformulated gasoline blendstock for January--the benchmark gasoline contract--was down 1.17 cents, or 0.8% at $1.5478 a gallon. January diesel lost 0.7 cent, or 0.4%, to $1.9552 a gallon. Sarah Kent and Summer Said contributed to this article Write to Georgi Kantchev at Credit: By Timothy Puko and Georgi Kantchev
Subject: Crude oil prices; Petroleum industry; Volatility
Location: United States--US Saudi Arabia
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638857343
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638857343?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
OPEC Remains United on Output Decision, Says Iraqi Oil Minister; Move Having Uneven Impact on Economies of Member Countries
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
"Up to now we didn't see any tension. although there are different views within OPEC, but at the end OPEC is united," he said. Since members of the at their semiannual meeting prices have slumped to below $60 a barrel.
Full text: ABU DHABI--Iraq's oil minister said Monday that the Organization of the Petroleum Exporting Countries remains united in its decision not to rein in production, but let the market decide the oil price, despite the uneven impact the stark slide in oil prices is having on the economies of member countries. "No one's saying everything is OK," said Oil Minister Adel Abdul-Mehdi in an interview with The Wall Street Journal on the sidelines of an energy conference in Abu Dhabi. "Up to now we didn't see any tension. although there are different views within OPEC, but at the end OPEC is united," he said. Since members of the at their semiannual meeting prices have slumped to below $60 a barrel. That is taken some member countries to the brink of economic crisis, while powerful Gulf producers are seen to be in a more comfortable position thanks to sizable fiscal cushions built up during years of high oil prices. Iraq itself is facing a budget deficit because of falling prices. However, Mr. Abdul-Mehdi was philosophical about the oil price's impact on Iraq's economy, saying it would encourage better financial discipline. "Economic realities are economic realities. We have to see those realities and adjust ourselves accordingly," he said. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Crude oil prices; Petroleum industry; Iraq War-2003
Location: Iraq
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: Englis h
Document type: News
ProQuest document ID: 1638857347
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638857347?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Rosneft Repays $7 Billion of TNK-BP Bridge Loan; Russian Oil Giant Repays Part of Foreign Debt Despite Western Sanctions
Author: Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
[...]Rosneft, Russia's most indebted company to be hit by sanctions, raised 625 billion rubles from the Russian bond market on Dec. 12, just one working day before the Bank of Russia by 6.5 percentage points to 17% in an effort to support the ruble and rein in inflation.
Full text: MOSCOW--State-controlled OAO Rosneft said Monday that it paid back $7 billion of a bridge loan it had taken to acquire TNK-BP, in the largest foreign debt repayment by a Russian company since Western sanctions were imposed. Rosneft bought TNK-BP for some $55 billion in cash and shares, becoming the world's largest listed oil producer by output. The payment confirmed Monday settled part of a $12.7 billion bridge loan raised from international banks to finance the deal. So far this year, Rosneft has repaid about $24 billion of its foreign debt, the company said. Its net debt stood at 1.77 trillion rubles ($29.77 billion) at the end of the third quarter of 2014. After Western from global capital markets earlier this year, Rosneft asked the government for 1.5 trillion rubles in state aid in August, saying it needed the money to weather sanctions. Moscow has yet to decide whether to provide Rosneft with aid from the National Welfare Fund, which is designed to support the pension system. But Rosneft, Russia's most indebted company to be hit by sanctions, raised 625 billion rubles from the Russian bond market on Dec. 12, just one working day before the Bank of Russia by 6.5 percentage points to 17% in an effort to support the ruble and rein in inflation. Rosneft confirmed that it won't use the rubles it raised from the debt market to buy in foreign currencies. "The company has no need to tap the currency market for servicing its debts as it generates enough of revenue in foreign currency," Rosneft Chairman Igor Sechin said. Mr. Sechin said Rosneft sells part of its revenue in foreign currencies, which has "a positive impact on the domestic currency market." Last week, President Vladimir Putin said he had personally contacted major companies to on the market to ease pressure on the battered ruble. Mr. Sechin also said that if Rosneft eventually were to receive money from the National Welfare Fund, it would spend it on strategically important projects in Russia. Analysts saw the bond sale by Rosneft as an alternative to a capital raising, because the company--sanctioned by the West for Moscow's and support of separatist rebels in Ukraine--is cut off from the international capital markets. Large bond placements were popular in Russia during the 2008-2009 financial crisis, when indebted companies issued bonds to subsidiary banks, which in turn used them as a collateral against the central bank's loans. Credit: By Andrey Ostroukh
Subject: Rubles; Sanctions; International finance; Banking; Currency
Location: Russia
People: Putin, Vladimir
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: TNK-BP; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638862217
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
South Sudan Signs Agreement With China's CNPC to Boost Oil Production; Output Slump Has Left War-Ravaged Nation Struggling to Pay For Vital Imports
Author: Bariyo, Nicholas
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
KAMPALA Uganda--South Sudan has signed an agreement with China National Petroleum Co., or CNPC, to boost oil production in at least three blocks, officials said Monday as the war-ravaged nation attempts to heal its battered oil industry.
Full text: KAMPALA Uganda--South Sudan has signed an agreement with China National Petroleum Co., or CNPC, to boost oil production in at least three blocks, officials said Monday as the war-ravaged nation attempts to heal its battered oil industry. CNPC said in a statement that it would use heavy oil recovery technologies in "stabilizing and increasing crude output" in the three blocks in the oil-rich but restive nation. The deal highlights how quickly China wants to restore South Sudan's oil production which has slumped by a third since the outbreak of the conflict late last year, posing a threat to a vital source of crude for Chinese refiners. "CNPC will...work with the operators of three blocks to increase crude production in South Sudan, and provide relevant training to the technicians from the Ministry of Petroleum and Mining." The company said. A government official said that under the deal, aging oil fields will also be rehabilitated to bolster production and exports. Company and government officials couldn't immediately provide the financial details of the deal. South Sudan's oil regions have experienced the heaviest combat since a long running power struggle between President Salva Kiir and his former deputy, Riek Machar, turned violent. More than 10,000 people have been killed in the conflict. Oil companies have evacuated dozens of workers. Beijing has already announced plans to send a 700-strong battalion to protect its oil interests in the country. Oil accounts for more than 90% of South Sudan's foreign revenues. The slump in production has left the country struggling to pay for food and other vital imports. Last month, the country's central bank issued new restrictions on the sale of dollars to importers, citing dwindling foreign-exchange reserves. NCPC, Malaysia's Petroliam Nasional Bhd. and India's Oil & Natural Gas Corp. produce the bulk of South Sudan's crude. Write to Nicholas Bariyo at Credit: By Nicholas Bariyo
Subject: Oil fields; Petroleum industry; Petroleum production; Oil recovery
Location: China Uganda South Sudan
People: Machar, Riek
Company / organization: Name: Petronas; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638862218
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction o r distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Afren Gets Bid Approach From Seplat; The Approach is The Latest Sign of Oil Deal Activity Heating Up
Author: Williams, Selina; Walker, Ian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
Afren's board fired its chief executive and chief operating officer in October following a scandal involving unauthorized payments made to the pair that were connected to some of the company's key Nigerian assets.
Full text: LONDON--Nigeria-focused oil producer Afren PLC said Monday it has received a "highly preliminary" approach from Nigerian peer Seplat Petroleum Development Company PLC in the latest sign that deal activity is heating up among oil exploration companies. Shares in Afren surged 14% after the news, though that only partially makes up for a near-70% slump in the company's value this year to around $900 million. Afren's board fired its chief executive and chief operating officer in October following a scandal involving unauthorized payments made to the pair that were connected to some of the company's key Nigerian assets. The sharp slide in oil prices since the summer has also hit Afren hard, along with other U.K.-listed exploration and production companies. That has led to speculation some of these typically small to midsize companies could be snapped up by cash-rich rivals. Seplat, which raised $500 million in an initial public offering in London and Lagos in April, has already been rumored as a potential buyer for Afren. It currently produces around 60,000 barrels a day from three oil blocks it bought from Royal Dutch Shell PLC in 2010, while Afren expects to produce 32,000 to 36,000 barrels a day this year from the Ebok, Okoro and Setu fields offshore Nigeria, as well as the Ogini and Isoko fields onshore. Afren also has exploration licenses elsewhere in Africa, including in Ghana, Kenya and Tanzania, as well as stakes in two projects in the Kurdish region in northern Iraq. Afren was the subject of bid speculation earlier this year after privately-held Nigerian firm South Atlantic Petroleum built up a stake of around 7% in the company. Afren said there was no certainty that an offer from Seplat would be made. Seplat has until Jan. 19 to make a firm offer or withdraw. Write to Selina Williams at and Ian Walker at Credit: By Selina Williams and Ian Walker
Subject: Petroleum industry
Location: Nigeria United Kingdom--UK
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638866085
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tesco Corp. Cuts Outlook as Falling Oil Prices Slow Drilling; Some Customers Have Deferred or Canceled Shipments
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
The guidance excludes eight to 10 cents a share in charges Tesco expects to book related to Russian currency devaluations and executive retirement costs.
Full text: Tesco Corp. slashed its outlook for its current quarter on Monday, saying the rapid decline in energy prices is hampering demand for its drilling equipment. Houston-based Tesco, which develops and commercializes drilling technology, said some of its customers have asked to defer shipments of drilling equipment until next year, while others have canceled orders altogether. The company has also seen tubular activity slow down in North America, while activity in Russia remains weak. The Russian ruble has hit record lows in recent weeks as the price of oil, a critical export, has plunged. Tesco said it now expects per-share earnings of 10 to 15 cents a share in its fourth quarter, compared with the 32 cents a share analysts polled by Thomson Reuters had been expecting. The guidance excludes eight to 10 cents a share in charges Tesco expects to book related to Russian currency devaluations and executive retirement costs. Tesco also said it no longer expects its revenue to improve sequentially in the quarter. Analysts had expected Tesco to post $154.2 million in revenue in the December quarter, compared with $141.9 in revenue in its most recently-ended quarter. Shares of Tesco have fallen about 31.2% this year. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Rubles; Financial performance
Location: Russia North America
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638866099
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Why Saudis Decided Not to Prop Up Oil; In American Shale Oil, A Perceived Threat to OPEC Market Share
Author: Solomon, Jay; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract: None available.
Full text: In early October, Saudi Arabia's representative to OPEC surprised attendees at a New York seminar by revealing his government was content to let global energy prices slide. Nasser al-Dossary's message broke from decades of Saudi orthodoxy that sought to keep prices high by limiting global oil production, said people familiar with the session. That set the stage for Saudi Arabia's oil mandarins to send crude prices tumbling late last month after persuading other members of the Organization of the Petroleum Exporting Countries to . Hard-hit countries like Iran, Russia and Venezuela suspected the move was a coordinated effort between the oil kingdom and its longtime ally, the U.S., to weaken their foes' economies and geopolitical standing. But the story of Saudi Arabia's new oil strategy, pieced together through interviews with senior Middle Eastern, American and European officials, isn't one of an old alliance. It is a story of a budding rivalry, driven by what Saudi Arabia views as a threat posed by American energy firms, these officials said. Shale-oil production in places like Texas and North Dakota has boosted U.S. output, displacing exports to the U.S. from OPEC members and adding to global oversupply. Mr. Dossary's October message signaled a direct challenge to North American energy firms that the Arab monarchy believes have fueled a supply glut by using new shale-oil technologies, said the people familiar with the session. Saudi officials became convinced they couldn't bolster prices alone amid the new-crude flood. They also concluded many other OPEC members would balk at meaningful cuts, as would big non-OPEC producers like Russia and Mexico. If Riyadh cut production alone, Saudi officials feared, other producers would swoop in and steal market share. Saudi oil minister Ali al-Naimi tested that conclusion just 48 hours before the Nov. 27 OPEC decision, meeting in Vienna with oil heads of several big producer nations to suggest a coordinated output cut. As he suspected going in, he couldn't get an agreement, said people familiar with the meeting. The option left: Let prices slide to test how long, and at what levels, American shale producers can keep pumping. --and among other energy powers--who have grown accustomed to triple-digit oil prices padding their governments' balance sheets. "In a situation like this, it is difficult, if not impossible for the kingdom or OPEC, to take any action that may result in lower market share and higher quotas from others, at a time when it is difficult to control prices," the official Saudi press agency quoted him as saying. Mr. Naimi didn't respond to inquiries. Saudi oil-ministry representatives wouldn't comment for this article. The Saudi approach is part of a significant evolution in Riyadh's relationship with Washington over the past decade. Close allies since World War II, the countries prospered on the kingdom's providing a steady oil flow in exchange for America's securing its borders. But the U.S.'s emergence as an energy rival is testing this foundation in ways not yet widely appreciated, said U.S. and Saudi officials, as have major differences over American Middle East policies. Saudi Arabia is taking a risk by letting oil prices plunge, said Arab, American and European officials. Saudi officials have said their economy can survive at least two years with low prices, thanks partly to the kingdom's $750 billion foreign-exchange reserves. Arab officials believe many less-efficient producers will be driven out of the market. Still, some oil-industry executives said, Riyadh and Mr. Naimi may underestimate how technology and the shale-oil boom have fundamentally altered energy markets. Many U.S. companies, they said, can make money or break even with oil below $40. The move has also exposed cracks inside the Saudi ruling circle. In October, as the oil-price slide accelerated, billionaire in an open letter for appearing to shrug off price declines. Belittling the impact, he wrote, "is a catastrophe that cannot go unmentioned." At about that time, Mr. Naimi's deputy, Prince Abdulaziz bin Salman, another nephew of the king, worried to colleagues that the kingdom's budget couldn't bear lower prices long, said people familiar with the matter. The offices of Prince Abdulaziz and Prince al-Waleed didn't respond to inquiries. Saudi Arabia and its massive energy reserves have played a major role in shaping world affairs for 50 years. During the 1980s, the Reagan administration credited the Saudis with maintaining high oil production to drive down prices and weaken the Soviet Union's finances. The price drop also fueled an economic recovery in the U.S. A spokesman for the National Security Council on Sunday said Washington's alliance with Saudi Arabia remains strong and focused on cooperation on numerous economic and security issues. "Our bilateral relationship is built on over 70 years of close cooperation whether it is counterterrorism, military to military training, educational exchanges, energy security, or bolstering trade and investment," said NSC spokesman Alistair Baskey. President Barack Obama's administration has worked closely with Saudi Arabia to try using energy markets to pressure Iran into constraining its nuclear program, according to U.S. and Saudi officials. Beginning in 2009, U.S. officials coordinated with Saudi Arabia, the United Arab Emirates and Kuwait to assure major buyers of Iranian oil would have alternatives if they weaned themselves off Tehran. The strategy helped the West cut by half Iran's energy exports over the past three years, said Robert Einhorn, who coordinated U.S. sanctions on Iran in the Obama administration. "What made this possible was that the Saudis and others were able to produce more." But Washington's relations with Riyadh have soured in recent years due to differences over the Obama administration's handling of Middle East political instability. King Abdullah was incensed last year when Mr. Obama reneged on his pledge to launch military strikes against Syrian President Bashar al-Assad's regime following its alleged poison-gas use against civilians. Saudi officials also felt deceived after the Obama administration launched secret nuclear negotiations in 2012 with Iran, Riyadh's regional rival. "Saudi Arabia's reliance on U.S. protection is a thing of the past," said Nawaf Obaid, a visiting scholar at Harvard University's Belfer Center who has advised the Saudi government on foreign policy. "The Saudis will remain America's most important strategic partner in the Middle East, but not its closest." Washington is entering a new era in its Saudi Arabia relationship, although the alliance remains crucial to the global economy, said Amos Hochstein, the U.S. State Department's special envoy and coordinator for international energy affairs. "Our relationship with Saudi Arabia was never dependent on energy. Our relationship is evolving," he said. "We will never be energy independent because it's a global commodity. But we can be more efficient and self-sufficient." The American energy boom has further complicated relations, said U.S. and Saudi officials. In late September, Ibrahim al-Muhanna, a top adviser to Mr. Naimi, said publicly in Bahrain he didn't foresee oil prices falling much below $90 a barrel due to what he said was the high cost of extracting North American shale oil. He didn't respond to inquiries. The Saudis largely kept silent as prices kept falling. Then Mr. Naimi went on vacation in late September, removing himself from a public debate over whether OPEC should rein in production at its November meeting. Mr. Naimi tended sheep before starting as an errand boy at Saudi Aramco, the national oil company. He worked his way to chief executive before becoming minister in 1995. He won a reputation for data-driven decision making. In the late 1990s, he focused on U.S. Midwest commercial crude-oil inventories--if levels got too high, OPEC needed to cut. Mr. Naimi's comments can rattle or soothe oil markets. So his vacation's timing puzzled many of his colleagues, said people familiar with the matter, and during his absence there was bickering inside the government about how to arrest the price decline. The question: whether to focus on stopping the short-term revenue impact of the price decline or to exploit the medium-term potential of its reducing competition from North American shale producers. Meanwhile, OPEC members were slashing prices, often undercutting one another. In early November, Saudi Aramco cut prices to U.S. customers, a move aimed at locking in customers as shale output swelled, industry officials said. Returning from his holiday, Mr. Naimi met with Venezuela's foreign minister and its chief OPEC representative, Rafael Ramirez, on a Venezuelan resort island. Privately, the Saudi told his hosts he would support a production cut only if the Venezuelans could persuade producers inside and outside OPEC to participate, people briefed on the meeting said. A Venezuelan foreign ministry spokeswoman declined to comment. Mr. Ramirez traveled to Russia, Algeria, Iran and Qatar to woo production-cut support. Two days before OPEC's Nov. 27 meeting, he gathered senior energy officials from Russia, Mexico and Saudi Arabia--including Mr. Naimi--at Vienna's Hyatt Hotel. On the table was a proposal to take two million barrels a day off the market, officials familiar with the talks said. OPEC would shoulder the bulk of the cut, but Russia and Mexico were expected to trim a combined 500,000 daily barrels. Mr. Naimi had expected Russia to balk, these people said. Indeed, the Russian delegates said they couldn't cut production for technical reasons and because they might lose pumping capacity by shutting wells. An official at OAO Rosneft, the Russian state oil company, confirmed the meeting took place but denied there were discussions about an output cut. The discussions never made it as far as what Mexico might be willing to do. "From the start, Russia made it clear that it wasn't going to cut production, and the meeting ended there," said a person familiar with the discussion. A Mexican energy-ministry spokesman didn't respond to inquiries. Mr. Naimi argued it was in everyone's interest to take collective action and that the market would eventually force the Russians to cut. Russia, he said, couldn't keep producing roughly 10 million barrels a day unless oil prices were over at least $100. Mr. Naimi headed to the Nov. 27 OPEC meeting with King Abdullah's support to align OPEC's Arab states behind a policy of no production cuts and of defending market share, said people familiar with his mandate. The U.A.E., Kuwait and Qatar gave their support ahead of the meeting. At the meeting, Mr. Naimi addressed other OPEC ministers, who were asked to leave aides outside the room. He conceded falling prices would be painful but said losing customers to U.S. shale would be worse, people briefed on his comments said. Mr. Naimi wasn't advocating forcing down prices to hurt U.S. shale producers, these people said, but was warning that if OPEC cut output, non-cartel crude would likely replace it. OPEC ministers agreed to keep their production ceiling unchanged. Sell orders flooded oil markets. Shares in big producers tumbled, along with currencies of petro-states like Russia and Nigeria. U.S. and Arab officials have privately gushed that the decline could undercut the ability of Tehran, Moscow and Caracas to play destabilizing roles globally, and have voiced optimism that Iran's financial woes could force it into more nuclear concessions. "If in the process, you have 30% off Iran's income, fine," said a senior Arab official involved in the oil deliberations. "If in the process, you shave 30% off Russia's income, fine." There remains a risk prices don't quickly recover. Some in the Saudi media have criticized Mr. Naimi for a policy they say could be disastrous for the kingdom's economy. Riyadh depends on oil for 90% of its budget. "All OPEC and non-OPEC officials are in a state of shock," said Muhammad al-Sabban, a former adviser to Mr. Naimi, adding that a " 'wait and see' is their only option." Benoît Faucon, Sarah Kent and Kejal Vyas contributed to this article. Write to Jay Solomon at and Summer Said at Credit: Jay Solomon, Summer Said
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638866110
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gulf Oil Exporters Blame Non-OPEC Producers for Glut; Saudi Oil Minister Dismisses Suggestions That OPEC Decision Was Targeted at Countries
Author: Said, Summer; Kent, Sarah; Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries--along with speculators and misleading information--for the slump.
Full text: ABU DHABI--Gulf oil officials on Sunday defended OPEC's decision last month to keep , blaming producers outside of the group for the glut of oil on the market that has depressed prices. Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries--along with speculators and misleading information--for the slump. On Nov. 27, OPEC said it was keeping its production ceiling unchanged, sending crude prices into a tailspin. OPEC officials since have said the move was aimed at protecting the group's market share, saying a reduction in output to boost prices could have allowed non-OPEC producers to sweep in and take its customers. OPEC officials have singled out American shale producers as a particular problem. as a result of the shale boom, reducing OPEC exports to the U.S. Non-OPEC producers "will realize that it is in their interests to cooperate to ensure high prices for everyone," Mr. Naimi said. He noted that articles and analyses saying that the kingdom's policies are aimed against one country or another are incorrect. Officials in Iran, Venezuela and Russia have suggested Saudi Arabia was working with the West to depress prices and weaken their governments. "Talking about such alleged conspiracies against our country is absolutely incorrect and indicates a misunderstanding in some minds. Our economy is based on strictly economic strategies--no more, no less," he said. Mr. Naimi added that the oil industry and market will recover from the current situation and that plummeting oil prices won't have a major impact on the kingdom's economy. But when asked by reporters later in the day whether OPEC would cut output if non-OPEC producers offered to reduce their own production, Mr. Naimi said, "It is too late." If other, non-OPEC producers want to cut, they are welcome to, he added. "One of the main reasons that led to the price fall is the irresponsible production from some of the producers outside the organization [OPEC]," said Suhail Mohamed Faraj Al-Mazrouei, the oil minister for the United Arab Emirates. Kuwaiti Oil Minister Ali Saleh Al-Omair called last month's OPEC decision "a good action, because the action doesn't mean we have to cut and have the others take our part in the market." There should be some form of cooperation between all countries involved in the global energy market, including non-OPEC members, he said. But decisions on production shouldn't hurt the interests of OPEC while benefiting others, he added. "It is not fair that OPEC takes the decision to reduce while the others are producing and investing," Mr. Omair said. Qatari Oil Minister Mohammed Bin Saleh al-Sada, meanwhile, said those who cannot stand the pressure of lower prices will have to step down and give way to those who can do better in terms of efficiency. The sharp dip in oil prices has left many wondering about a possible floor for the commodity that has lost nearly half its value since June. OPEC's secretary-general pointed out that the slide didn't reflect market fundamentals. There will be a rebound but we don't see any action before the end of the first half of 2015, Abdalla Salem el-Badri said, adding that this was just a prediction. Write to Summer Said at , Sarah Kent at and Asa Fitch at Credit: By Summer Said, Sarah Kent and Asa Fitch
Subject: Petroleum industry; Supply & demand; Cartels; Crude oil prices; Energy industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638888825
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638888825?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eurozone Consumer Confidence Boosted by Oil Price; Household Spending May Increase in Coming Months
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
The European Central Bank has said it would reassess its existing stimulus policies, which include cheap bank loans and purchases of asset-backed securities and covered bonds, in early 2015, and decide whether to do more to ensure that annual inflation moves closer to its target of just below 2%.
Full text: Consumers in the 18 countries that share the euro became slightly more upbeat in December, likely reflecting the boost to real incomes from falling oil prices. The pickup in confidence indicates that household spending may increase slightly in coming months, a development that would help the eurozone economy avoid a slide back into contraction despite weak business investment and disappointing export sales. The European Commission on Monday said its preliminary measure of consumer confidence rose to minus 10.9 in December from minus 11.5 in November. The consensus forecast of 15 economists surveyed by The Wall Street Journal last week was for a rise to minus 11.0. Economists often compare falling oil prices to declining income or sales tax rates, since they leave households with more money to spend on other goods and services. The recent sharper fall in oil prices is likely to have made many eurozone households feel better about their near-term financial positions. Indeed, consumer spending has edged higher in the eurozone as the inflation rate has fallen over recent quarters, expanding by 0.5% in the third quarter, having increased by 0.3% in the second and 0.2% in the first. When inflation rates were higher, policy makers would likely have ignored falling oil prices, expecting the boost to real household spending power to compensate over the medium term, as prices of other goods and services rose. But right now, falling oil prices mean the eurozone's annual rate of inflation is likely to turn to negative in coming months, as consumer prices dip below the levels recorded in late 2013 and early 2014. Very low levels of inflation can be harmful to economic growth, crimping company profits and investment, while making it more difficult for governments and households to reduce high levels of debt. And a slide into deflation--or a period of falling prices--would exacerbate those problems. Policy makers worry that if consumer prices start to fall, businesses and households will start to postpone spending decisions in the expectation that goods will be cheaper in the future. That in turn can become a self-perpetuating downward spiral, and the case of Japan has shown how difficult it can be to revive growth after deflation has taken hold. The European Central Bank has said it would reassess its existing stimulus policies, which include cheap bank loans and purchases of asset-backed securities and covered bonds, in early 2015, and decide whether to do more to ensure that annual inflation moves closer to its target of just below 2%. Write to Paul Hannon at Credit: By Paul Hannon
Subject: Households; Consumer Price Index; Eurozone; Deflation
Company / organization: Name: European Central Bank; NAICS: 521110; Name: European Commission; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638898590
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638898590?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Rosneft's Planned Deal for Morgan Stanley Oil Business Collapses; Companies Failed to Win Regulatory Approval
Author: Baer, Justin; Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
Morgan Stanley had sought to head off Washington's concerns about the transaction by running a separate sale process for its TransMontaigne unit, which owns oil-storage facilities and pipelines on U.S. soil, people familiar with the matter have said. , as well as related inventory, to NGL Energy Partners LP.
Full text: MOSCOW--Morgan Stanley scotched a deal to sell an oil-trading and storage business to Russia's OAO Rosneft, leaving the Wall Street firm on the lookout for a new buyer of the division. Morgan Stanley and Rosneft, Russia's largest oil company, said Monday the two sides had terminated their contract after they failed to win U.S. clearance on the deal amid tensions over Russia's intervention in Ukraine. The agreement won't proceed "due to an objective impossibility to complete the deal that has arisen as a result of regulatory clearances being refused," the companies said in a statement. A Morgan Stanley spokesman said the firm would "now consider a variety of options for the unit.'' Macquarie Group Ltd., an Australian bank eager to build out its commodities-trading arm, is among the firms that has expressed interest in the business, people familiar with the matter said Monday. Rosneft had agreed to buy the assets for several hundred million dollars, The Wall Street Journal reported earlier this year. Several analysts said they didn't expect Morgan Stanley to find a new buyer quickly, in part because could make the business less attractive in the short term. Morgan Stanley had sought a buyer for the business amid pressure from U.S. regulators to shed physical commodities assets that might pose risks to Wall Street firms and the markets. Other banks, including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., had also moved to shed certain corners of their commodities-trading arms. State-controlled Rosneft emerged as a willing bidder and reached an agreement with Morgan Stanley in December 2013. The two companies then pursued the necessary regulatory approvals, including one from a confidential U.S. committee that vets security risks. They told investors they expected to complete the transaction in the second half of 2014. Morgan Stanley had sought to head off Washington's concerns about the transaction by running a separate sale process for its TransMontaigne unit, which owns oil-storage facilities and pipelines on U.S. soil, people familiar with the matter have said. , as well as related inventory, to NGL Energy Partners LP. Meanwhile, the situation in Ukraine deteriorated. In April, that restricts travel and freezes assets. And as the U.S. escalated its response to Russia's push in Ukraine, Morgan Stanley executives turned more pessimistic that their agreement would win regulatory approval. Those relations frayed further in August, when Russia was accused of providing aid and artillery to Ukrainian rebels. The standoff has prodded other would-be buyers of Morgan Stanley's trading and storage assets to ask about the business's availability, people familiar with the matter have said. , Morgan Stanley acknowledged publicly that the deal with Rosneft might never close. At that point, the two companies still had a contract, and Rosneft indicated it wouldn't agree to break the deal before it expired in late December, the people said. That agreement meant Morgan Stanley couldn't begin talks with other potential buyers. "Having invested substantial efforts in the deal, the parties regret that it could not be completed," the companies said Monday. Rosneft has been hit by the Western sanctions and is facing restrictions to acquire certain technologies and raise capital in the West. Morgan Stanley has said it would continue to operate the business, which includes an inventory of oil and a 49% stake in tanker operator Heidmar Holdings LLC. The firm had reached retention agreements with employees slated to be transferred to Rosneft following the sale, guaranteeing some of their pay, people familiar with the matter have said. In its statement announcing the deal, the firm said the transaction wasn't "material." Morgan Stanley has maintained one of Wall Street's biggest commodities-trading businesses for decades. Since the financial crisis, though, the division has been shrinking. The firm told a Senate subcommittee last year that annual revenue had dropped to $912 million in 2012 from $3 billion in 2008. Christian Berthelsen and Georgi Kantchev contributed to this article. Write to Justin Baer at and Alexander Kolyandr at Credit: By Justin Baer And Alexander Kolyandr
Subject: Agreements; Investment bankers; Inventory; Regulatory approval
Location: Russia United States--US Ukraine
Company / organization: Name: Macquarie Group; NAICS: 523110; Name: OAO Rosneft; NAICS: 324110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: NGL Energy Partners LP; NAICS: 211112; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638898840
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638898840?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Decline Creating Stock Bargains; Shares of some midstream energy companies 'have been overdone on the down side,' says an adviser
Author: Maxey, Daisy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
Over the past few weeks, they have been buying shares of midstream energy firms, large exploration-and-production companies and energy-focused master limited partnerships.
Full text: For financial adviser Keith Goddard, the steep decline in stocks of U.S. energy companies has turned into a buying opportunity. The chief executive of Capital Advisors Inc. in Tulsa, Okla., has been snapping up shares of discounted midstream oil companies. Prices "are attractive enough to give us a good return over three years," says Mr. Goddard, whose independent investment firm oversees $1.5 billion, mostly for high-net-worth clients. Like Mr. Goddard, many advisers and mutual-fund managers aren't waiting to see if oil prices decline further. Over the past few weeks, they have been buying shares of midstream energy firms, large exploration-and-production companies and energy-focused master limited partnerships. Many nevertheless expect the sector to remain volatile at least for the near term and perhaps longer. Stocks of midstream companies--those involved in the transport and storage of oil and gas products--"have been overdone on the downside," says Mr. Goddard. Over the last couple of weeks, he's added to his position in natural-gas pipeline firm Williams Cos. and purchased shares of Continental Resources Inc., a major producer in North Dakota's Bakken Shale. About a week ago, he also bought shares of natural-gas producer Range Resources Corp., and last week he was adding to his position in Oneok Inc., which distributes natural gas through utilities in Kansas, Oklahoma and Texas. Mr. Goddard isn't happy to see the stock market's rally, which is making some energy stocks less of a bargain. His goal is to invest up to 20% of the firm's growth-stock strategy in shares of energy companies, up from just 4% to 5%. "We're not going to do it unless we get a fatter pitch than this," he says. However, he expects more pain for energy companies in the New Year, saying the growth rate of North American oil production will likely slow by the second half of 2015. When oil prices will rise will depend on demand, he says. Treven Ayers, chief investment officer at Clearview Wealth Management in Charlotte, N.C., has also been taking advantage of the downturn, rebalancing client portfolios into the selloff. His firm, which manages $65 million, is finding opportunities in domestic and international stocks as well as energy-focused MLPs and global bonds. Last month, the firm added to its holdings in Exxon Mobil Corp. and Chevron Corp., the nation's first- and second-largest energy companies, which explore for, produce and refine oil and natural gas. "A month ago, they became very attractively priced and each have nice solid dividends," Mr. Ayers says. The firm has also added to its stake in oil-field-services equipment maker National Oilwell Varco Inc. It is currently considering adding more to those three positions, he says. Mr. Ayers's firm also beefed up its stake in JPMorgan Alerian MLP Index Exchange Traded Notes, which offer exposure to midstream energy MLPs. The ETNs have gained more than 15% annually over the past five years, he points out. But many of the energy-focused MLPs have plunged around 18% over the last three months and aren't for the faint of heart, warns Mr. Ayers. Each client of his firm has 3% to 4% of their overall portfolio invested in MLPs. With more volatility likely in the first quarter, Dan Heckman, senior fixed-income strategist at U.S. Bank Wealth Management, says he wouldn't heavily overweight beaten-down oil stocks now. Cyclical and consumer-oriented stocks will benefit from falling oil prices as consumers will have more discretionary dollars to spend, and early next year may be a good time to acquire them. If investors want to buy energy companies, they should look for well-known, well-diversified companies with strong balance sheets, he adds. Larry Adam, chief investment officer at Deutsche Asset & Wealth Management's wealth-management division in the Americas, says he likes midstream MLPs, which are less sensitive to the price of oil than some other MLPs. But he says he wouldn't be "overly aggressive" about buying them now; early next year might be a better time. Integrated oil companies--those that engage in exploration, production, refinement and distribution of oil and gas--will likely offer opportunities, Mr. Adam says: They will experience much less volatility than other parts of the energy sector, many are now trading at attractive valuations and have positive cash flows, and they'll be free to take over any distressed oil rigs or companies, he notes. Oil prices will likely start to grind higher in the first half of 2015 due to a reduction in supply, Mr. Adam says. His firm expects West Texas Intermediate crude oil, a benchmark in oil pricing, to range between $50 and $70 a barrel in the first half of next year, and to rise to $84 a barrel by the end of next year, from just $56.50 Friday. Write to Daisy Maxey at Credit: By Daisy Maxey
Subject: Master limited partnerships; Petroleum industry; Energy industry; Investments; Stocks; Volatility; Natural gas; Petroleum production
Location: United States--US
Company / organization: Name: National Oilwell Varco Inc; NAICS: 333132; Name: Chevron Corp; NAICS: 324110, 211111; Name: Capital Advisors Inc; NAICS: 523930; Name: Williams Cos Inc; NAICS: 486910, 517110, 523130, 325312, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Range Resources Corp; NAICS: 211111, 211112; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1638913273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1638913273?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Continental Resources Cuts 2015 Budget Amid Oil-Price Decline; Oil Producer Cuts Budgeted Capital Expenditures to $2.7 Billion
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Dec 2014: n/a.
Abstract:
The oil producer, which has a strong presence in the Bakken Shale, said "this revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015."
Full text: Continental Resources Inc. has joined the list of energy companies reducing 2015 capital budgets as have fallen about 50% from their summer peak. Continental said its nonacquisition capital expenditure budget is $2.7 billion. The company already had reduced its budget in November, to $4.6 billion from $5.2 billion. The oil producer, which has a strong presence in the Bakken Shale, said "this revised budget prudently aligns our capital expenditures to lower commodity prices, targeting cash flow neutrality by mid-year 2015." Continental anticipates production growth of 16% to 20% next year. The company plans to reduce its current average operated rig count from about 50 to about 34 by the end of first quarter. U.S. energy companies are starting to cut drilling, lay off workers and slash spending in the face of an accelerating decline in oil prices. This month, EOG Resources Inc. said it would shed many of its Canadian oil and gas fields, close its Calgary office and lay off employees there as it refocuses in the U.S. Meanwhile, Matador Resources Co. is contemplating temporarily leaving the Eagle Ford Shale area in South Texas. On Monday, oil and gas company Rex Energy Corp. said its 2015 operational capital budget is $180 million to $220 million, representing a 43% decrease from the midpoint of its previously announced plans. Write to Josh Beckerman at Credit: By Josh Beckerman
Subject: Petroleum industry; Acquisitions & mergers; Budgets
Location: United States--US Calgary Alberta Canada
Company / organization: Name: Rex Energy Corp; NAICS: 211111; Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 22, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639079204
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Drop, Nuclear Deal Delay Unsettle Iran's Economy; President Rouhani Oversaw Fragile Recovery
Author: Faucon, Benoît; Spindle, Bill
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract: None available.
Full text: TEHRAN--Plummeting oil prices and the failure so far to conclude a nuclear agreement are dealing a double blow to Iran's economy just as it was starting to recover. Oil prices, which have fallen about 50% since June, resumed their decline on Monday after Saudi Arabia, the world's largest crude exporter, said it may boost production despite a global glut. The slide in prices is strangling revenues in Iran, a country dependent on oil money. Compounding the problem, Iran and six world powers also missed a deadline in November to conclude a comprehensive deal on limiting Iran's nuclear activities, something that has dimmed hopes for crippling economic sanctions to be lifted anytime soon. The renewed economic travails are eroding gains that accompanied President Hasan Rouhani's surprise election 18 months ago. Mr. Rouhani, whose political fortunes rest largely on an economic recovery, has been scrambling to contain the damage. In a recent address to parliament, he touted a radical but difficult plan to address what he called an unprecedented oil slump: cutting dependence on oil income by boosting industrial exports and hiking taxes. He has also proposed dramatic fiscal tightening in the new Iranian year that begins in March. "Iran is moving to a very austere budget," said Fereydoun Khavand, an Iran expert and senior lecturer at Paris Descartes University. Iran's economic progress came after significant reforms, bolstered by a leap in optimism that the president would be able to get international sanctions over Iran's nuclear program lifted through an agreement with the West. Inflation had stopped accelerating over the past year, falling to about 20% on an annual basis currently compared with 35% in recent months, according to the government. The rial lost two thirds of its value against the dollar in 2012 as banking sanctions tightened. It has regained some ground since then, but lost 5% in a week against the dollar when the deadline for reaching a nuclear deal was extended beyond November. President Rouhani continues to focus on nuclear talks. He advocated for a deal again in remarks carried by Iranian state media in recent days, directly challenging hard-liners who oppose any agreement with the West. Such an agreement would bring access to oil funds blocked abroad and foreign investment that "would largely make up for the oil slump," Mr. Khavand said. Iran's top lawmaker indicated that the hardships won't influence Tehran's regional policies. "This is a mistake to imagine that by oil they can change the strategic major issues in the region," Iranian Parliament Speaker Ali Larijani said Sunday during a visit to the Syrian capital Damascus, where he pledged closer ties to President Bashar al-Assad's regime. "We Iranians have experienced much harder situations than this." Iran's financial support for Mr. Assad in the Syrian civil war is adding to the headwinds, said Karim Sadjadpour, an analyst with the Carnegie Endowment. "Syria is costing billions of dollars, the drop in oil prices tens of billions and the (35 years of) sanctions, hundreds of billions," he said. It is expensive to provide the Syrian regime credit lines on oil and other goods along with military aid. But Iran sees the battle in Syria as one of its highest overseas priorities and "can justify the cost of sticking with Assad," said Emile Hokayem, an analyst with the International Institute for Strategic Studies. Combined with the cost of Iran's foreign policy, the new economic hardships pose formidable challenges for Mr. Rouhani and the optimistic turn in sentiment his presidency ushered in. Sanctions relief agreed with the West a year ago has unlocked $4.2 billion of oil funds and eased oil sales and food imports. Thanks to a detente with the U.S. and tighter monetary policies, the economy had reversed a two-year recession and returned to a projected growth track of about 1.5 % in the fiscal year ending March 2015, according to the International Monetary Fund. Inflation had started to plateau. "During the last government, we have faced a lot of difficulties as a result of sanctions," said Shahram, a perfume and cosmetics seller at Tehran's bazaar who only gave his first name. "Since President Rouhani was elected, we can't say everything has changed for the better. At least, prices have stabilized." The government's recently released budget plan for next year assumes oil prices will average $72 per barrel, more than one-quarter below the average price of $100 per barrel assumed in this year's budget. But, according to the IMF, the Islamic Republic needs close to $131 a barrel to cover government spending this year and next. To try to avoid a fiscal shortfall, Iran plans to cut the share of oil revenue it sets aside for a separate infrastructure budget to 20% from 31%, according to government officials. Parliament has also voted to raise taxes, possibly even on currently tax-exempt religious foundations and military-linked companies, though Supreme Leader Ayatollah Ali Khamenei would need to sign off on such a radical change. Iran's massive religious foundations operate like corporate conglomerates outside the country's regular laws, while a Byzantine web of companies tied to the powerful Iranian Revolutionary Guards have won billions of dollars of oil contracts after Western giants pulled out. Meanwhile, the Rouhani government hopes to take advantage of the drop in global energy prices to reduce government subsidies on fuel and food. To avoid hurting low income earners and industrial companies, additional revenue will come from direct taxes on wealthier families, said Hamidreza Fouladgar, a member of Iran's parliamentary commission on industries. For the first time, a previously ignored consumer tax has appeared on restaurant bills, Tehran residents say. In his administration's budget presentation, Mr. Rouhani also proposed cutting reliance on oil revenue, which finances 50% of the current budget to 33% and compensating with non-oil exports. The latter--which include cheap Iranian-made vehicles sold to Iraq and Afghanistan and natural gas-based petrochemicals shipped to China--have risen by 20% in the past eight months, according to Iran's customs administration. Still, sectors that had been considered as havens against the economic pain inflicted by sanctions are also being hit. The Tehran Stock Exchange has fallen sharply by 8% since the extension of nuclear talks was announced as investors have adjusted their expectations. So has what was a surprisingly bubbly real-estate market, according to industry sources. One real-estate investor said current transactions on Tehran's property market suggested a drop of 35% compared with two years ago. "The real estate bubble is bursting because of political uncertainty," he said. By contrast, the rental market is booming, he added, a sign people are holding on to cash instead of investing it. Gold, another hedge against risk for many Iranians, has also gained value, said a 53-year-old trader of the commodity near Tehran's bazaar. When the extension of the nuclear talks was announced on Nov. 24, the price of a coin rose by 4% in two days, he said. While taking a huge toll on the economy, the Western-led sanctions regime has also provided something of a buffer against the drop in oil prices. Among top hydrocarbons producers, Iran is one of the least dependent on oil revenue. They account for 22% of its gross domestic product compared with about 46% for Iraq and Saudi Arabia, according to the World Bank. The economy has been forced to further diversify away from oil revenues, and only a trickle of actual funds from overseas sales makes it through the international banking system and into government coffers where it can be spent. "Lower oil prices simply magnify the effect of the sanctions," said Mostafa Pakzad, Chairman at Pakzad Consulting Corp., which advises foreign companies trading in Iran. But all the same, "there are buffers because Iran has been under sanctions for so long." In his address to parliament, Mr. Rouhani said the proposed budget expands revenues beyond oil sales to an "unprecedented" extent and represents an "opportunity to separate the budget from dependence on oil revenues." Because of banking restrictions, more than $100 billion in oil revenue is blocked abroad, Rahim Zareh, the spokesman for the economic commission in Iran's parliament, told The Wall Street Journal. "The direction we are taking is to stop relying on oil anymore and to use it as savings for investment," he added. Jay Solomon in Washington contributed to this article. Write to Bill Spindle at Credit: By Benoît Faucon and Bill Spindle
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639100411
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China's Dark Shadow Looms Over Oil's Future
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract:
At the heart of global oil demand in China, there remains darkness. With China now burning one of every nine barrels of oil in the world, it is gotten too big to keep growing so fast.
Full text: At the heart of global oil demand in China, there remains darkness. Oil's collapse in 2014 has been a tale of gushing supply, but it is worth remembering that investors started the year feeling jittery about slowing demand. That centered around China, the world's largest contributor to oil demand growth in recent years. The problem for investors next year isn't only that . It is also inscrutable. Most observers can't agree on how much oil China actually burns. A few days before 2014 ends, the International Energy Agency says China will consume 2.5% more barrels this year than in 2013. Wood Mackenzie reckons 3.4%. IHS Energy Insight thinks 2% and Barclays 1.1%. Why the differences? Analysts infer demand by combing through refinery output, trade and inventory of products such as gasoline. This being China, questions surround most data, especially inventories, with guesswork often needed. Analysts are also sometimes watching different moving parts. IEA doesn't adjust for inventory. Barclays, IHS and Wood Mackenzie do. Still their numbers differ. Instead of agonizing over the precise magnitude of change, investors are left assessing its direction. Growth next year is likely, yet lackluster. Beijing is already stimulating the economy, like with . Plus, low fuel prices should themselves stimulate consumption. Though these figures deserve a grain of salt, Barclays, one of the least optimistic forecasters, estimates demand will grow faster at 1.9% in 2015. Wood Mackenzie says 3.3%. But even the most optimistic forecasts aren't high enough for what oil bulls have come to expect of China. When the economy boomed between 2009 and 2013, oil demand averaged 6.5% growth every year by Barclays' measure. With China now burning one of every nine barrels of oil in the world, it is gotten too big to keep growing so fast. Over the longer term, Chinese demand could even stagnate. Diesel, China's most widely used fuel, which construction machines and coal-carrying trucks run on, looks set to register negligible growth in 2014 for the second year in a row, according to London-based Energy Aspects. With Beijing , construction and mining activity--and hence diesel use--may contract. Gasoline consumption, which supported oil demand by rising 11.3% so far this year, may turn into a weak sauce, too. Passenger-car sales decelerated to their lowest in nearly two years in November. That China's . This is mostly because of a roughly 7% expansion in refinery capacity this year, according to Citigroup. Those refineries had to stay busy, so they imported crude that was processed and put back on tankers to sell to China's neighbors. In effect, China's crude purchases stole oil-product demand from others and didn't necessarily add to global demand. Next year, refinery additions will slow down and crude purchases could too. China may continue to next year to import crude for its . These purchases support oil to a degree, but hoarding isn't a long-term source of demand. And China is unlikely to fill reserves in a way that causes prices to rebound. Cutting out the noise about data discrepancies and inflated imports, investors are left with a long-term signal of weaker underlying demand growth than they've come to rely on. China remains a reason for the oil market to stay dark. Write to Abheek Bhattacharya at Credit: By Abheek Bhattacharya
Subject: Gasoline prices; Petroleum refineries; Petroleum industry; Demand
Location: Beijing China China
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639218992
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639218992?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
CFO Journal: Big Names In Oil, Tech And Retail Fell Short
Author: Alix, Stuart
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Dec 2014: B.4.
Abstract:
Amazon, for example, poured about $10 billion into new distribution centers over the past three years, which pushed down profit margins and consequently affected returns on capital, said Mark Mahaney, a technology analyst with RBC Capital Markets. [...]recently, investors have been fairly patient with that approach, especially since the e-commerce giant's stock rose 69% over the three years through June 30, 2014, compared with a 55% gain for the S&P 500 index.
Full text: Some of America's largest, best-known and ostensibly most successful companies didn't perform well enough for their chief financial officers to win a place among this year's Top 20. Notable for missing the mark in CFO Journal's ranking of S&P 500 companies were Apple Inc., Exxon Mobil Corp., Google Inc., Wal-Mart Stores Inc. and Amazon Inc. All five companies scored below the median in their sectors for return on invested capital over the past three years. That benchmark reflected increases or declines in profit and investment spending, and was the most heavily weighted of the nine main criteria in the ranking's core analysis. Those companies also fell short by several other metrics. In fact, none of the 10 companies in the S&P 500 with the highest stock-market value made the list. In Wal-Mart's case, the nature of discount retailing, plus the challenge of making any significant changes in such a large enterprise hurt results, said David Schick, who covers the retail sector for Stifel, Nicolaus & Co. Dogged by hefty real-estate costs and thin margins, "Wal-mart's return on capital is very low, and not much is going to change that," he said. "It's such a huge company; being the CFO of Wal-Mart is kind of like being [U.S.] Treasury Secretary." Wal-Mart spokesman Randy Hargrove said the company "takes a balanced approach between growth and investment," adding, "we have a thorough process for making investments driven by our weighted average cost-of-capital guidelines." For some companies, their miss was the result of taking an especially long-term approach to investment, spending aggressively with little to show for it within the three-year timeframe. Amazon, for example, poured about $10 billion into new distribution centers over the past three years, which pushed down profit margins and consequently affected returns on capital, said Mark Mahaney, a technology analyst with RBC Capital Markets. Until recently, investors have been fairly patient with that approach, especially since the e-commerce giant's stock rose 69% over the three years through June 30, 2014, compared with a 55% gain for the S&P 500 index. "The last time they went through a major investment cycle about 10 years ago, it yielded the Kindle, Amazon Web Services and Amazon Marketplace for third-party sellers," Mr. Mahaney said. Amazon declined to comment. Big and still-unprofitable investments in new fields diluted the impact of Google's highly profitable search engine. Those investments included social media -- via its YouTube unit -- and devices such as phones and Google Glass. Still, Google's stock rose 141% over the three years. Google declined to comment. Another thing in common for Amazon and Google: chief executives who are founders. "It's a little harder to push back on strategic plans or the future direction of the company when the CEO is also the biggest shareholder," said Scott Simmons, a managing director at recruiting firm Crist/Kolder. Past success impeded some companies. Apple CFO Luca Maestri was too new in the role to be considered, but his predecessor would have missed on financial grounds. One factor: the company's operating margins peaked at close to 40% at the beginning of the ranking period, thanks to the popularity of its iPhone 4S. But its margins shrank with the launch of the iPhone 5. Ultimately, the margins should recover, but a CFO can do little to speed the process, said Toni Sacconaghi, a tech analyst with Sanford C. Bernstein & Co. "CFOs can cut costs and really improve margins, because even a one-point change is a big deal," he said. But, at already successful companies, "cost cutting is not really a lever for major change." Apple declined to comment. At Exxon Mobil, which has a principal financial officer, not a CFO, the management philosophy is to be prepared for storms, and not necessarily to capture short-term opportunities. "Exxon Mobil is the most conservatively managed company in its sector," said Pavel Molchanov, an energy analyst at Raymond James, adding, "that helps them when oil prices are low." Exxon Mobil declined to omment. Credit: By Alix Stuart
Subject: Chief executive officers; Financial performance; Investments; Ratings & rankings; Chief financial officers
Location: United States--US
People: Maestri, Luca
Company / organization: Name: YouTube Inc; NAICS: 519130; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Apple Inc; NAICS: 511210, 334111, 334220; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910; Name: Amazon.com Inc; NAICS: 454111
Product name: Amazon Kindle, Apple iPhone 5, Google Glass
Classification: 2130: Executives; 3100: Capital & debt management; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2014
Publication date: Dec 23, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639260479
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Slips After OPEC Talk --- Cartel Officials Sunday Blamed Outsiders for Glut That Has Depressed Prices
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Dec 2014: C.4.
Abstract:
According to Mr. al-Naimi, who is OPEC's secretary-general and its most influential voice, the current market situation is temporary and prices will rebound.
Full text: Crude-oil prices slid Monday, the first day of trading after several OPEC members defended their refusal to take drastic action to prop up prices. Oil officials from several leading members of the Organization of the Petroleum Exporting Countries on Sunday blamed producers outside of the group for the glut that has depressed prices. Oil prices have now fallen by 48% since mid-June as U.S. shale producers battle Saudi Arabia and its Middle Eastern allies for market share. Light, sweet crude for February delivery settled down $1.87, or 3.3%, to $55.26 a barrel on the New York Mercantile Exchange after rallying earlier in the session by more than a percentage point. The February contract for Brent crude, the global benchmark, ended down $1.27, or 2.1%, to $60.11 a barrel on London's ICE Futures exchange, after flirting with $63 in morning trade. "You see a lot of bottom-pickers come into this market all the time now, so when they get foiled they get out quickly," said John Kilduff, founding partner of Again Capital in New York, which invests in energy. Speaking at an energy conference in Abu Dhabi on Sunday, Saudi Arabia's oil minister, Ali al-Naimi, blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the price slump. According to Mr. al-Naimi, who is OPEC's secretary-general and its most influential voice, the current market situation is temporary and prices will rebound. Mr. al-Naimi's comments were echoed Monday by Iraq's oil minister, Adel Abdul-Mehdi, who said OPEC remains united in its decision not to rein in production but to let the market decide the oil price. Prices have plummeted since OPEC decided on Nov. 27 to keep its production ceiling unchanged. "The reality of Saudi Arabia and [United Arab Emirates] saying, 'We're cool,' has taken over. It's still a bearish market," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "It comes down to a battle between U.S. shale and Saudi Arabia." The U.S. is producing record amounts of oil, topping 9.1 million barrels a day in the week ended Dec. 12, according to data from the U.S. Energy Information Administration. The U.S., the third-largest crude producer, is quickly catching up to No. 2Saudi Arabia, as output fromshale-oil deposits races ahead of expectations. Russia is No. 1. "The market doesn't have the momentum to sustain gains right now," said Kash Kamal, research analyst at Sucden Financial. According to Mr. Kamal, the comments by the OPEC officials provided some excuse for traders to enter long positions, but they quickly realized that fundamentals haven't changed. "The market is still under pressure, still oversupplied. It's business as usual." Credit: By Timothy Puko and Georgi Kantchev
Subject: Crude oil; Commodity prices
Location: United States--US
People: Naimi, Ali I
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 23, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639260909
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639260909?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Iran's Economy Staggers As Oil Falls, Deal Stalls
Author: Faucon, Benoit; Spindle, Bill
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Dec 2014: A.1.
Abstract:
"During the last government, we have faced a lot of difficulties as a result of sanctions," said Shahram, a perfume and cosmetics seller at Tehran's bazaar who only gave his first name. "Since President Rouhani was elected, we can't say everything has changed for the better.
Full text: TEHRAN -- Plummeting oil prices and the failure so far to conclude a nuclear agreement are dealing a double blow to Iran's economy just as it was starting to recover. Oil prices, which have fallen about 50% since June, resumed their decline on Monday after Saudi Arabia, the world's largest crude exporter, said it may boost production despite a global glut. The slide in prices is strangling revenues in Iran, a country dependent on oil money. Compounding the problem, Iran and six world powers also missed a deadline in November to conclude a comprehensive deal on limiting Iran's nuclear activities, something that has dimmed hopes for crippling economic sanctions to be lifted anytime soon. The renewed economic travails are eroding gains that accompanied President Hasan Rouhani's surprise election 18 months ago. Mr. Rouhani, whose political fortunes rest largely on an economic recovery, has been scrambling to contain the damage. In a recent address to parliament, he touted a radical but difficult plan to address what he called an unprecedented oil slump: cutting dependence on oil income by boosting industrial exports and hiking taxes. He has also proposed dramatic fiscal tightening in the new Iranian year that begins in March. "Iran is moving to a very austere budget," said Fereydoun Khavand, an Iran expert and senior lecturer at Paris Descartes University. Iran's economic progress came after significant reforms, bolstered by a leap in optimism that the president would be able to get international sanctions over Iran's nuclear program lifted through an agreement with the West. Inflation had stopped accelerating over the past year, falling to about 20% on an annual basis currently compared with 35% in recent months, according to the government. The rial lost two thirds of its value against the dollar in 2012 as banking sanctions tightened. It has regained some ground since then, but lost 5% in a week against the dollar when the deadline for reaching a nuclear deal was extended beyond November. President Rouhani continues to focus on nuclear talks. He advocated for a deal again in remarks carried by Iranian state media in recent days, directly challenging hard-liners who oppose any agreement with the West. Such an agreement would bring access to oil funds blocked abroad and foreign investment that "would largely make up for the oil slump," Mr. Khavand said. Iran's top lawmaker indicated that the hardships won't influence Tehran's regional policies. "This is a mistake to imagine that by oil they can change the strategic major issues in the region," Iranian Parliament Speaker Ali Larijani said Sunday during a visit to the Syrian capital Damascus, where he pledged closer ties to President Bashar al-Assad's regime. "We Iranians have experienced much harder situations than this." Iran's financial support for Mr. Assad in the Syrian civil war is adding to the headwinds, said Karim Sadjadpour, an analyst with the Carnegie Endowment. "Syria is costing billions of dollars, the drop in oil prices tens of billions and the (35 years of) sanctions, hundreds of billions," he said. It is expensive to provide the Syrian regime credit lines on oil and other goods along with military aid. But Iran sees the battle in Syria as one of its highest overseas priorities and "can justify the cost of sticking with Assad," said Emile Hokayem, an analyst with the International Institute for Strategic Studies. Combined with the cost of Iran's foreign policy, the new economic hardships pose formidable challenges for Mr. Rouhani and the optimistic turn in sentiment his presidency ushered in. Sanctions relief agreed with the West a year ago has unlocked $4.2 billion of oil funds and eased oil sales and food imports. Thanks to a detente with the U.S. and tighter monetary policies, the economy had reversed a two-year recession and returned to a projected growth track of about 1.5 % in the fiscal year ending March 2015, according to the International Monetary Fund. Inflation had started to plateau. "During the last government, we have faced a lot of difficulties as a result of sanctions," said Shahram, a perfume and cosmetics seller at Tehran's bazaar who only gave his first name. "Since President Rouhani was elected, we can't say everything has changed for the better. At least, prices have stabilized." The government's recently released budget plan for next year assumes oil prices will average $72 a barrel, more than one-quarter below the average price of $100 a barrel assumed in this year's budget. But, according to the IMF, the Islamic Republic needs close to $131 a barrel to cover government spending this year and next. To try to avoid a fiscal shortfall, Iran plans to cut the share of oil revenue it sets aside for a separate infrastructure budget to 20% from 31%, according to government officials. Parliament has also voted to raise taxes, possibly even on currently tax-exempt religious foundations and military-linked companies, though Supreme Leader Ayatollah Ali Khamenei would need to sign off on such a radical change. Iran's massive religious foundations operate like corporate conglomerates outside the country's regular laws, while a Byzantine web of companies tied to the powerful Iranian Revolutionary Guards have won billions of dollars of oil contracts after Western giants pulled out. Meanwhile, the Rouhani government hopes to take advantage of the drop in global energy prices to reduce government subsidies on fuel and food. In his administration's budget presentation, Mr. Rouhani also proposed cutting reliance on oil revenue, which finances 50% of the current budget to 33% and compensating with non-oil exports. The latter -- which include cheap Iranian-made vehicles sold to Iraq and Afghanistan and natural gas-based petrochemicals shipped to China -- have risen by 20% in the past eight months, according to Iran's customs administration. Still, sectors that had been considered as havens against the economic pain inflicted by sanctions are also being hit. --- Jay Solomon in Washington contributed to this article. Credit: By Benoit Faucon and Bill Spindle
Subject: Sanctions; Agreements; Recessions; Lines of credit; Military aid; Crude oil prices; Arms control & disarmament; Petroleum production; Economic conditions -- Iran
Location: Iran Saudi Arabia
Classification: 1110: Economic conditions & forecasts; 5310: Production planning & control; 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 23, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639260951
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Morgan Stanley, Rosneft Oil Deal Collapses
Author: Baer, Justin; Kolyandr, Alexander
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Dec 2014: C.3.
Abstract:
Morgan Stanley had sought a buyer for the business amid pressure from U.S. regulators to shed physical commodities assets that might pose risks to Wall Street firms and the markets.
Full text: Morgan Stanley scotched a deal to sell an oil-trading and storage business to Russia's OAO Rosneft, leaving the Wall Street firm on the lookout for a new buyer. Morgan Stanley and Rosneft, Russia's largest oil company by output, said Monday that the two sides had terminated their contract after they failed to win U.S. clearance on the deal amid tensions over Russia's intervention in Ukraine. The agreement won't proceed "due to an objective impossibility to complete the deal that has arisen as a result of regulatory clearances being refused," the companies said in a statement. A Morgan Stanley spokesman said the firm would "now consider a variety of options for the unit." Macquarie Group Ltd., an Australian bank eager to expand its commodities-trading arm, is among the firms that has expressed interest in the business, people familiar with the matter said. Rosneft had agreed to buy the assets for several hundred million dollars, The Wall Street Journal reported earlier this year. Several analysts said they didn't expect Morgan Stanley to find a new buyer quickly, in part because the fall in oil prices could make the business less attractive in the short term. The price of crude has dropped 48% from its 2014 high hit in June. Morgan Stanley had sought a buyer for the business amid pressure from U.S. regulators to shed physical commodities assets that might pose risks to Wall Street firms and the markets. Other banks, including J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., had also moved to shed certain corners of their commodities-trading arms. State-controlled Rosneft emerged as a bidder and reached an agreement with Morgan Stanley in December 2013. The two companies then pursued the necessary regulatory approvals, including one from a confidential U.S. committee that vets security risks. They told investors they expected to complete the transaction in the second half of 2014. Morgan Stanley had sought to head off Washington's concerns about the transaction by running a separate sale process for its TransMontaigne unit, which owns oil-storage facilities and pipelines on U.S. soil, people familiar with the matter have said. The firm sold its interests in TransMontaigne, as well as related inventory, to NGL Energy Partners LP. Meanwhile, the situation in Ukraine deteriorated. In April, U.S. officials added Rosneft President Igor Sechin to a sanctions list that restricts travel and freezes assets. And as the U.S. escalated its response to Russia's push in Ukraine, Morgan Stanley executives turned more pessimistic that their agreement would win regulatory approval, people familiar with the matter have said. The standoff has prodded other would-be buyers of Morgan Stanley's trading and storage assets to ask about the business's availability, people familiar with the matter have said. In October, Morgan Stanley acknowledged publicly that the deal with Rosneft might never close. At that point, the two companies still had a contract, and Rosneft indicated it wouldn't agree to break the deal before it expired in late December, the people said. That agreement meant Morgan Stanley couldn't begin talks with other potential buyers. Rosneft has been hit by the Western sanctions and is facing restrictions to acquire certain technologies and raise capital in the West. Morgan Stanley has said it would continue to operate the business, which includes an inventory of oil and a 49% stake in tanker operator Heidmar Holdings LLC. The firm had reached retention agreements with employees slated to be transferred to Rosneft following the sale, guaranteeing some of their pay, people familiar with the matter have said. In its statement announcing the deal, the firm said the transaction wasn't material. Morgan Stanley has maintained one of Wall Street's biggest commodities-trading businesses for decades. Since the financial crisis, though, the division has been shrinking. The firm told a Senate subcommittee last year that annual revenue had dropped to $912 million in 2012 from $3 billion in 2008. Meanwhile, Rosneft said Monday that it paid back $7 billion of a bridge loan it had taken to acquire TNK-BP, in the largest foreign debt repayment by a Russian company since Western sanctions were imposed. Rosneft bought TNK-BP in 2013 for some $55 billion in cash and shares. The payment settled part of a bridge loan of $12.7 billion raised from international banks to finance the deal. So far this year, Rosneft has repaid about $24 billion of its foreign debt, the company said. Credit: Justin Baer, Alexander Kolyandr
Subject: Agreements; Acquisitions & mergers; Regulatory approval
Location: Russia United States--US Ukraine
Company / organization: Name: Macquarie Group; NAICS: 523110; Name: NGL Energy Partners LP; NAICS: 211112; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: OAO Rosneft; NAICS: 324110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Classification: 1300: International trade & foreign investment; 2330: Acquisitions & mergers; 4310: Regulation; 8130: Investment services; 8510: Petroleum industry; 9176: Eastern Europe; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2014
Publication date: Dec 23, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639337020
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639337020?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Gain on Demand Signals in U.S., China; Oil Market Appears to Stabilize After Recent Tumble
Author: Puko, Timothy; Cowley, Matthew
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract:
Crude-oil prices rose to their highest level in more than a week on Tuesday amid signs of stronger demand in both the U.S. and China, the world's largest oil consumers.
Full text: Crude-oil prices rose to their highest level in more than a week on Tuesday amid signs of stronger demand in both the U.S. and China, the world's largest oil consumers. Light, sweet crude for February delivery ended $1.86, or 3.4%, higher at $57.12 a barrel on the New York Mercantile Exchange. Brent crude for February delivery gained $1.58, or 2.6%, to $61.69 a barrel on the ICE Futures Europe exchange. Each benchmark climbed to its highest settlement since Dec. 12. "Crude continued to stabilize," said Gene McGillian, an analyst at Tradition Energy. "The market does have the makings for a turnaround; I just don't think it's immediate." Traders have said that bottom pickers have been searching for an entry into crude. Several previous small bumps have been met with immediate retreats. But closing prices have stayed within a $4 range for eight sessions, the market's most stable period since November. U.S. consumer spending is rising faster than expected, the Commerce Department said, adding to hopes that gasoline sales could increase. In China, consumption of crude oil rose 717,000 barrels a day from a year ago, according to analysts at JBC Energy. That is good news for in crude prices since June. A pickup in demand in response to the drop in prices could help absorb some of the ample supplies. "Those are the kind of things you'll need to see to balance the market," said Anthony Lerner, senior vice president of industrial commodities at brokerage R.J. O'Brien in New York. The American Petroleum Institute, an industry group, said late Tuesday that its data for last week show a 5.4-million-barrel gain in crude-oil supplies, according to industry sources. The group also said that gasoline supplies grew by 5.5 million barrels and distillate stocks rose by 1.1 million barrels, according to the sources. The U.S. benchmark fell 1% since the news in off-hours trading while Brent fell 0.6%. U.S. crude stocks are expected to decline in data due Wednesday from the Energy Department, according to a survey of analysts by The Wall Street Journal. Estimates from 10 analysts surveyed showed that U.S. oil inventories are projected to have fallen by 1.8 million barrels, on average, in the week ended Dec. 19. The closely watched survey from the Energy Information Administration is due at 10:30 a.m. EST Wednesday. U.S. shale-oil activity has already taken "a downward lurch," creating optimism for prices going into 2015, analysts at Standard Chartered Bank said in a research note. The trend will continue through the first three months of the year "unless there is an unexpectedly early move up in oil prices," the analysts said. By the end of the first quarter, the U.S. will be losing more production from old oil wells than it is gaining in production from new wells, "and net growth would likely become negative," the Standard Chartered analysts said. The moves would help the market overcome its current global glut in the first half of 2015, the bank said. Saudi Arabia--and by implication the Organization for the Petroleum Exporting Countries--"is aiming for a short sharp shock to other producers rather than a long slow war of attrition," the analysts said. Still, "should demand sag or non-OPEC supply show any resilience at current prices, we would expect to roll its low-price policy into the second half," they said. January reformulated gasoline blendstock, or RBOB, settled up 3.54 cents, or 2.3%, to $1.5704 a gallon. January diesel settled up 3.93 cents, or 2%, to $1.9907 a gallon. Write to Timothy Puko at and Matthew Cowley at Credit: By Timothy Puko And Matthew Cowley
Subject: Petroleum industry; Supply & demand; Crude oil prices
Location: United States--US China
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Standard Chartered Bank; NAICS: 522110; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639367359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639367359?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada October GDP Expands 0.3%; Economy Saw Unexpected Strength In Manufacturing And Higher Oil-Sands Production
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract:
The growth gap between the U.S. and Canada "is widening to Canada's disadvantage," said Derek Holt, economist at Bank of Nova Scotia, "and I can't see that changing over our 2015-16 forecast horizon that favors the U.S. as the oil price shock carries negative effects on Canada."
Full text: OTTAWA--Canada's economy advanced at a faster-than-anticipated clip in October on unexpected strength in manufacturing and higher oil-sands production. But analysts warned against putting too much weight on the report, given it didn't reflect the full impact of the plunge in the price of crude oil, Canada's top export. The energy sector accounts for more than 20% of total business investment in the country, and in recent weeks a large number of Canadian oil producers have curtailed capital-spending plans for next year amid plunging prices. Gross domestic product--the broadest measure of goods and services produced in the economy--advanced 0.3% to 1.650 trillion Canadian dollars ($1.418 trillion) in October, following a 0.4% increase in September, Statistics Canada said Tuesday. Market expectations were for a 0.1% advance in October. On a year-over-year basis, GDP increased 2.3%. The Canadian data came as the U.S. Commerce Department said the in the third quarter, supported by robust consumer spending and business investment. Gross domestic product rose at an annual rate of 5.0%, up from the second quarter's growth rate of 4.6% and the strongest pace since the third quarter of 2003. The growth gap between the U.S. and Canada "is widening to Canada's disadvantage," said Derek Holt, economist at Bank of Nova Scotia, "and I can't see that changing over our 2015-16 forecast horizon that favors the U.S. as the oil price shock carries negative effects on Canada." Policy makers here expect the Canadian economy to benefit from strength in the U.S. economy, which takes up some three-quarters of Canada's exports and is expected to be among the top performers among industrialized countries in 2015. Economists project Canadian economic output to slow in the fourth quarter from the 2.8% pace of expansion in the third quarter. The Bank of Canada has forecast 2.5% growth in the fourth quarter, based on its most recent outlook published in October, although it may revise that projection given that the price of oil is now down roughly 45% from its peak in June, and oil-producing states in the Middle East suggest there is no urgency to curtail production. The oil and gas industry accounts for roughly 10% of Canadian GDP. In its most recent interest-rate decision, Canada's central bank left its key overnight rate at the 1% level where it has stood for more than four years, and said that while the recovery showed signs of broadening, slumping oil prices would weigh on the economy. Tuesday's GDP report said output in mining and energy extraction sector rose 1.2% in October to C$139.82 billion, on the strength of production in the oil sands. Natural gas output declined, while mining gained due to a "notable" advance in potash production, the data agency said. Manufacturing, which stands to benefit from a weaker Canadian currency and robust U.S. demand, advanced 0.7% to C$176.40 billion. CIBC World Markets called the manufacturing sector's performance unexpected. Canada's economy also benefited from a 2.6% gain in educational services, the largest such advance in this category in nearly 17 years, as output returned to normal levels after the end of a labor dispute involving teachers in British Columbia, the country's third-largest province. Write to Paul Vieira at Credit: By Paul Vieira
Subject: Manufacturing; Petroleum industry; Labor disputes; Economic growth; Gross Domestic Product--GDP; Energy industry
Location: United States--US Canada
Company / organization: Name: Statistics Canada; NAICS: 926110; Name: Bank of Canada; NAICS: 521110; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639503505
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639503505?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Budget Airlines Fly Higher on Lower Oil; Lower-Cost Carriers' Lean Operating Model Could Give Them More Bang for Their Buck
Author: Hua, Thao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract:
[...]the models determines how much of the savings from lower oil prices filters through to the bottom line. : airlines who hedged a larger proportion of oil costs won't gain as much because they've already locked in higher prices.
Full text: They are already flying high, but budget airlines could gain more altitude thanks to lower oil prices. Jet fuel is , which are down about 45% this year. But the models determines how much of the savings from lower oil prices filters through to the bottom line. : airlines who hedged a larger proportion of oil costs won't gain as much because they've already locked in higher prices. U.S. carriers tend to hedge less of their jet fuel costs than European counterparts and benefit more from fuel costs being priced in dollars, analysts say. European carriers can also lock in foreign exchange rates, but that comes at an additional cost. Within Europe, another group that stands to do well is budget airlines. As fuel becomes a smaller proportion of the total cost for carriers, budget airlines' lean operating model could give them more bang for their operational buck. Next year, fuel should account for about 26% of the global sector's total operating costs compared with 30% in 2013, according to industry body IATA. But for budget airlines, that figure is usually higher. Take Ryanair. Fuel costs account for nearly 45% of its operating expenses. That means fuel savings translate into a larger boost to pretax profit. There may be another benefit for budget airlines--if lower oil prices are here to stay. These cut-price carriers could push ahead with low-cost growth. Ryanair, for instance, added four new bases and 57 new routes in the six months to September while unit costs fell 2%, mainly thanks to lower oil prices. Meanwhile, discretionary spending--and leisure travel--tends to increase with lower oil prices. That should also disproportionately benefit budget carriers. On the other hand, some sectors such as energy companies could suffer, squeezing corporate travel budgets. That is more likely to hurt carriers such as IAG--the group that owns British Airways, which is more dependent on business travel for growth. All airline stocks have benefited from oil's descent. But low-cost competitors have been outperforming their legacy peers. IAG is trading at 9.7 times forward earnings while Ryanair is trading at 14.7 times forward earnings, according to FactSet. Extracting more profit from lower oil prices should still allow budget carriers to fly higher. Credit: By Thao Hua
Subject: Airlines; Profits; Petroleum industry; Business travel
Location: Europe United States--US
Company / organization: Name: Ryanair Holdings PLC; NAICS: 481111, 492110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639518195
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Lukoil Sells Stake in Venezuela Project to Rosneft; Rosneft's Stake in National Oil Consortium Rises to 80%
Author: Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract: None available.
Full text: MOSCOW--Russia's largest privately owned oil company Lukoil said Tuesday it sold its share in a Venezuelan project to state-controlled oil giant Rosneft. Rosneft, the world's largest publicly traded oil company, said its share in the National Oil Consortium LLC, the company that is developing the project called PetroMiranda, rose to 80%. Gazprom Neft, the oil arm of Russia's natural gas monopoly Gazprom, owns 20%. All the three companies are under Western sanctions imposed for Moscow's policy toward Ukraine. Rosneft has consistently increased its cooperation with Venezuela, Chief Executive Igor Sechin said. "Taking into account the future decline of shale production in the U.S. and Canada, it is Venezuelan oil that can become the substitutional element for the receding volumes of those markets," said Mr. Sechin. Lukoil President Vagit Alekperov said the company "is now implementing a number of strategically important projects, both in Russia and abroad. After the sale of our stake in the NOC, we will be able to focus on these particular projects and optimize the investment structure by steering the key financial resources into the asset development at the production stage." National Oil Consortium was established by Russian oil companies in October 2008 as part of the joint Russian-Venezuelan economic initiative. In 2010, the consortium and Venezuelan company PdVSA registered a joint venture, PetroMiranda, to develop the Junin-6 block in the Orinoco heavy-oil belt. Write to Alexander Kolyandr at Credit: By Alexander Kolyandr
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639580312
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Firms' Predicament: Who Should Cut Output? Companies Act Against Collective Interest by Waiting for Rivals to Turn Off Tap First
Author: Gold, Russell; Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Dec 2014: n/a.
Abstract:
[...]even though it's in the collective interest of the country's oil producers to cut production, the interests of any of those producers is the opposite.
Full text: If the of oil that has sent plunging has come largely from the U.S., why aren't American energy companies turning off the tap? The answer can largely be explained by simple game theory. In short, even though it's in the collective interest of the country's oil producers to cut production, the interests of any of those producers is the opposite. Each one of them is waiting for a rival to make the change. This behavior--hoping someone else will cut production so you don't have to--is a classic example of the "prisoner's dilemma," says Roger McCain, a professor in Drexel University's economics department. "If you can't coordinate, you may as well go for what you can get, and make decisions on the basis of self-serving rationality," he says. U.S. law bars companies from acting in concert to influence prices, so an organized response from the oil industry is all but impossible, experts say. "If there was ever a time for cooperation, it would be now," said Fred Julander, president of Denver-based Julander Energy, who has been in the oil business for more than 40 years. "But I don't see that happening." U.S. oil production has grown by 1.1 million barrels a day just in the last 12 months, according to federal data, and is over 9.1 million daily barrels. And there is no sign of a slowdown yet. Federal data show that at the end of November U.S. oil companies were pumping 641,000 more barrels a day than they were at the end of June, after crude prices peaked. Estimates of the sheer amount of ranges as high as Barclays PLC's 1.4 million barrels a day; and as low as 600,000 barrels a day, according to Chris Lafakis, senior economist at Moody's Analytics. Growing demand for crude won't absorb the glut and push prices up, he said, so "most of the adjustment will have to come from lower supply." For nearly three decades, when oil prices rose too high, or fell too low, to stabilize the market. Now the Kingdom says it is done being the world's so-called "swing producer." Russia, in the midst of an oil-driven economic crisis, can't step into that role, and other oil-producing countries say that the U.S. caused the problem and should fix it. But for the U.S., reducing oil production by a million barrels a day would require an enormous shift. If the cuts were shared equally, every U.S. producer would have to trim 11% of its output. Or Exxon Mobil Corp., Chevron Corp. and EOG Resources Inc. would all have to turn off their U.S. production. Dozens of small U.S. companies could close in all their oil wells at once without really making a dent. But they probably won't, until their funding dries up, says Jim Burkhard, vice president of global oil research for IHS Corp. Some North American companies have said they plan to cut their capital spending next year and dial back on exploring for new oil. But at the same time, they say their oil output will rise. Continental Resources Inc. this week announced a 41% cut to its capital spending next year. Even so, its annual oil and natural gas output will increase by 16% to 20% next year, said Continental, which is a major crude-oil producer in North Dakota and Oklahoma. Other companies are waiting until early next year to disclose spending plans. Pioneer Natural Resources Co. President and Chief Operating Officer Tim Dove said earlier this month the company hadn't issued any guidance on production or spending for 2015--and likely wouldn't until February. Rather than focusing on drilling fewer wells, he said, "We are seeking out cost reductions from all our suppliers." Cutting back on oil production would be risky for companies, which could lose market share, not to mention the cash they need to pay off debt and drill new wells. If they drop rigs and crews, companies run the risk of not being able to ramp up when crude prices improve, said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "You want to wait as long as possible to let them go because you don't know if you'll get them back," he said. Eric Otto describes it using a theory called the "tragedy of the commons," in which everyone who has access to a pasture grazes as many cattle there as possible--a rational decision that leads to the field being overgrazed and ruined. An analyst at CLSA Americas LLC, the North American arm of a Hong Kong-based brokerage firm, Mr. Otto says that U.S. oil companies with a lot of debt, oversized spending plans, and little liquidity are locked in a game of survival, each vying to be the last to cut back. "If you eventually have to cut, you want to be the last," he says. Write to Russell Gold at and Erin Ailworth at Credit: By Russell Gold And Erin Ailworth
Subject: Petroleum industry; Capital expenditures; Presidents; Petroleum production; Energy industry
Location: United States--US
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Chevron Corp; NAICS: 324110, 211111; Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Drexel University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y .
Pages: n/a
Publication year: 2014
Publication date: Dec 23, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639606291
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1639606291?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyrig ht owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Rise on Signs Of a Pickup in Demand
Author: Puko, Timothy; Cowley, Matthew
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Dec 2014: C.4.
Abstract:
Crude-oil prices rose to their highest level in more than a week amid signs of stronger demand in both the U.S. and China, the world's largest oil consumers.
Full text: Crude-oil prices rose to their highest level in more than a week amid signs of stronger demand in both the U.S. and China, the world's largest oil consumers. Light, sweet crude for February delivery gained $1.86, or 3.4%, to settle at $57.12 a barrel on the New York Mercantile Exchange. Brent crude for February delivery advanced $1.58, or 2.6%, to $61.69 a barrel on the ICE Futures Europe exchange. "Crude continued to stabilize," said Gene McGillian, an analyst at Tradition Energy. "The market does have the makings for a turnaround; I just don't think it's immediate." Traders have said that bottom pickers have been searching for an entry into crude. Several previous small bumps have been met with immediate retreats. But closing prices have stayed within a $4 range for eight sessions, the market's most stable period since November. U.S. consumer spending is rising faster than expected, the Commerce Department said, adding to hopes that gasoline sales could increase. In China, consumption of crude oil rose 717,000 barrels a day from a year ago, according to analysts at JBC Energy. That is good news for oil producers, which have been hammered by the roughly 46% decline in crude prices since June. A pickup in demand in response to the drop in prices could help absorb some of the ample supplies. "Those are the kind of things you'll need to see to balance the market," said Anthony Lerner, senior vice president of industrial commodities at brokerage R.J. O'Brien in New York. The American Petroleum Institute, an industry group, said late Tuesday that its data for last week shows a 5.4 million-barrel gain in crude-oil supplies. The group also said gasoline supplies rose 5.5 million barrels and distillate stocks increased by 1.1 million barrels. The U.S. benchmark fell 1% since the news in after-hours trading, while Brent fell 0.6%. U.S. crude stocks are expected to decline in data due Wednesday from the Energy Department, according to a survey of analysts by The Wall Street Journal. Estimates from 10 analysts surveyed showed that U.S. oil inventories are projected to have fallen by 1.8 million barrels, on average, in the week ended Dec. 19. The survey from the Energy Information Administration is due at 10:30 a.m. EST. U.S. shale-oil activity has already taken "a downward lurch," creating optimism for prices going into 2015, analysts at Standard Chartered Bank said in a research note. The trend will continue through the first three months of the year "unless there is an unexpectedly early move up in oil prices," the analysts said. By the end of the first quarter, the U.S. will be losing more production from old oil wells than it is gaining in production from new wells, "and net growth would likely become negative," the Standard Chartered analysts said. The moves would help the market overcome its global glut in the first half of 2015, the bank said. January reformulated gasoline blendstock, or RBOB, settled up 3.54 cents, or 2.3%, to $1.5704 a gallon. January diesel settled up 3.93 cents, or 2%, to $1.9907. Credit: By Timothy Puko and Matthew Cowley
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 24, 2014
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639839283
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Firms Play a Waiting Game --- Everyone Wants Less Production, but Nobody Wants to Turn Off the Tap First
Author: Gold, Russell; Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Dec 2014: B.1.
Abstract:
[...]even though it's in the collective interest of the country's oil producers to cut production, the interests of any of those producers is the opposite. Or Exxon Mobil Corp., Chevron Corp. and EOG Resources Inc. would all have to turn off their U.S. production.
Full text: If the global glut of oil that has sent crude prices plunging has come largely from the U.S., why aren't American energy companies turning off the tap? The answer can largely be explained by simple game theory. In short, even though it's in the collective interest of the country's oil producers to cut production, the interests of any of those producers is the opposite. Each one of them is waiting for a rival to make the change. This behavior -- hoping someone else will cut production so you don't have to -- is a classic example of the "prisoner's dilemma," said Roger McCain, a professor in Drexel University's economics department. "If you can't coordinate, you may as well go for what you can get, and make decisions on the basis of self-serving rationality," he said. U.S. law bars companies from acting in concert to influence prices, so an organized response from the oil industry is all but impossible, experts say. "If there was ever a time for cooperation, it would be now," said Fred Julander, president of Denver-based Julander Energy, who has been in the oil business for more than 40 years. "But I don't see that happening." U.S. oil production has grown by 1.1 million barrels a day just in the last 12 months, according to federal data, and is over 9.1 million daily barrels. And there is no sign of a slowdown yet. Federal data show that at the end of November U.S. oil companies were pumping 641,000 more barrels a day than they were at the end of June, after crude prices peaked. U.S. crude-oil prices rose 3.4% Tuesday to $57.12 a barrel, but are still more than 40% below the peak. Estimates of the sheer amount of excess oil sloshing around the globe ranges as high as Barclays's 1.4 million barrels a day; and as low as 600,000 barrels a day, according to Chris Lafakis, senior economist at Moody's Analytics. Growing demand won't absorb the glut and push prices up, he said, so "most of the adjustment will have to come from lower supply." For nearly three decades, when oil prices rose too high, or fell too low, Saudi Arabia adjusted its output to stabilize the market. Now the Kingdom says it is done being the world's so-called "swing producer." Russia, in the midst of an oil-driven economic crisis, can't step into that role, and other oil-producing countries say that the U.S. caused the problem and should fix it. But for the U.S., reducing oil production by a million barrels a day would require an enormous shift. If the cuts were shared equally, every U.S. producer would have to trim 11% of its output. Or Exxon Mobil Corp., Chevron Corp. and EOG Resources Inc. would all have to turn off their U.S. production. Dozens of small U.S. companies could close in all their oil wells at once without really making a dent. But they probably won't, until their funding dries up, says Jim Burkhard, vice president of global oil research for IHS Corp. Some North American companies have said they plan to cut their capital spending next year and dial back on exploring for new oil. But at the same time, they say their oil output will rise. Continental Resources Inc. this week announced a 41% cut to its capital spending next year. Even so, its annual oil and natural gas output will increase by 16% to 20% next year, said Continental, which is a major crude-oil producer in North Dakota and Oklahoma. Other companies are waiting until early next year to disclose spending plans. Pioneer Natural Resources Co. President and Chief Operating Officer Tim Dove said earlier this month the company hadnt issued any guidance on production or spending for 2015 -- and likely wouldnt until February. Rather than focusing on drilling fewer wells, he said, "We are seeking out cost reductions from all our suppliers." Cutting back on oil production would be risky for companies, which could lose market share, not to mention the cash they need to pay off debt and drill new wells. If they drop rigs and crews, companies run the risk of not being able to ramp up when crude prices improve, said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "You want to wait as long as possible to let them go because you don't know if you'll get them back," he said. Eric Otto describes it using a theory called the "tragedy of the commons," in which everyone who has access to a pasture grazes as many cattle there as possible -- a rational decision that leads to the field being overgrazed and ruined. An analyst at CLSA Americas LLC, the North American arm of a Hong Kong-based brokerage firm, Mr. Otto said U.S. oil companies with a lot of debt, oversized spending plans, and little liquidity are locked in a game of survival, each vying to be the last to cut back. "If you eventually have to cut, you want to be the last," he said. Credit: By Russell Gold and Erin Ailworth
Subject: Petroleum industry; Petroleum production
Location: United States--US
Classification: 9190: United States; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2014
Publication date: Dec 24, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639839815
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP in Talks With Rosneft Over Stake in Siberian Oil Field; Proposed Deal Unlikely to Be Subject to West's Sanctions on Shale and Arctic Reserves Technology
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Dec 2014: n/a.
Abstract:
BP PLC is negotiating a deal with Kremlin-controlled oil giant OAO Rosneft that could give it a percentage of an Eastern Siberia field believed to have large petroleum reserves, according to a person familiar with the matter.
Full text: BP PLC is negotiating a deal with Kremlin-controlled oil giant OAO Rosneft that could give it a percentage of an Eastern Siberia field believed to have large petroleum reserves, according to a person familiar with the matter. The talks for the U.K. oil and gas company to acquire a stake in the Taas-Yuriakh field come at a time when Western sanctions--imposed in response to Russia's role in Ukraine-- for tapping shale and arctic reserves to Russia. The proposed deal would likely not be subject to any such sanctions. BP already owns nearly 20% of Rosneft, which has been under pressure due to the and by more than 40% since June. It isn't yet clear how that pressure will affect BP's income from Rosneft, which paid BP a dividend of close to $700 million this year. Rosneft declined to comment. The talks were first reported by Kommersant. Alexander Kolyandr contributed to this article Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry; Equity stake
Location: Russia United Kingdom--UK Ukraine
Company / organization: Name: OAO Rosneft; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 24, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1639953929
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017 -11-21
Database: The Wall Street Journal
Oil Prices Slide on Surge in Supplies; U.S. Crude Supplies Unexpectedly Rise, Adding to Glut of Oil
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Dec 2014: n/a.
Abstract:
Oil producers added 7.3 million barrels in the week ended Dec. 19, the U.S. Energy Information Administration said Wednesday.
Full text: Oil futures retreated Wednesday and auto fuels closed at multiyear lows after data showed an unexpected surge in U.S. crude supplies. Oil producers added 7.3 million barrels in the week ended Dec. 19, the U.S. Energy Information Administration said Wednesday. The supply surge adds even more to a growing glut of oil that has already sparked an international showdown for market share and a nearly 50% decline in futures since June. "The market is very fragile and...this is not going to help sentiment in the least," said Andrew Lebow, a broker at investment bank Jefferies. Analysts surveyed by The Wall Street Journal had expected a drop of 1.9 million barrels. The unexpected addition comes in contrast to how supplies usually drop at the end of the year when the industry tries to clear stockpiles to help its tax accounting, analysts said. Traders sold on the news. Light, sweet crude for February delivery settled down $1.28, or 2.2%, to $55.84 a barrel on The New York Mercantile Exchange. The February contract for Brent crude, the global benchmark, recently traded down $1.54, or 2.5%, to $60.24 a barrel on London's ICE Futures exchange. January reformulated gasoline blendstock, or RBOB, hit its lowest settlement price since April 30, 2009. It lost 5.8 cents, or 3.7%, to close at $1.5127 a gallon. Gasoline stockpiles rose by 4.1 million barrels--10 times more than expected--to 226.1 million barrels, the EIA said in its weekly report. January diesel hit its lowest settlement price since July 6, 2010. It lost 6.71 cents, or 3.4%, to close at $1.9236 a gallon. Distillate stocks, which include heating oil and diesel fuel, added 2.3 million barrels--more than double expectations--to 123.8 million barrels. For some analysts the buildup of products shows that low prices aren't triggering enough consumer demand to end the glut anytime soon. "If the U.S. gasoline market can't pull us higher ... then it reinforces the idea that we are still in a petroleum bear market," said Tim Evans, analyst at Citi Futures Perspective in New York. But there are some who found hope in the numbers that consumers are starting to buy more. Refiners moved an additional 572,000 barrels of products like gasoline and jet fuel last week, according to the EIA. That number is more akin to the summer driving season than the start of winter, said Carl Larry, director of oil and gas for Frost & Sullivan. "That's a crazy number," Larry said. "You're really seeing these low prices drive the consumer (to) increase the demand." Write to Timothy Puko at Credit: By Timothy Puko
Subject: Petroleum industry; Gasoline; Crude oil
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Frost & Sullivan; NAICS: 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640024909
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640024909?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
SMFG President: Oil Drop May Lead to More Caution on Deals; Koichi Miyata Says Russia's Troubles Aren't a Big Concern for Sumitomo Mitsui Financial Group
Author: Fukase, Atsuko
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Dec 2014: n/a.
Abstract: None available.
Full text: The president of Sumitomo Mitsui Financial Group Inc. said the recent fall in oil prices may make him more cautious about selecting projects for financing, although he doesn't see a big impact on the bank's current energy-related portfolio. "No one expected this situation a year ago, and if crude oil prices drop to the level of $50, people may have to think about slowing down new oil development," said Koichi Miyata said in an interview this week. In mid-December, crude prices dropped to their lowest level in five years. Brent crude, the international benchmark, tumbled to about $60 a barrel from more than $100 a barrel five months ago. Japanese banks have been beefing up their presence in project finance around the globe, seeking new business in areas such as infrastructure, resources and transport because loan demand is weak at home. SMFG is Japan's second-largest lender by revenue after Mitsubishi UFJ Financial Group Inc. According to Dealogic, Sumitomo Mitsui Banking Corp., the banking unit of SMFG, ranks third after State Bank of India and MUFG in global project finance this year to date. This year Sumitomo Mitsui was among the bookrunners for a $7.7 billion loan for a U.S. shale gas project, the Louisiana-based Cameron liquefied-natural-gas plant. "Regarding project finance, we run a simulation from various angles in advance--including the case of a plunge in oil prices," said Mr. Miyata, expressing confidence that the upheaval in energy wouldn't hit his bank hard. He said Sumitomo Mitsui was focusing on the quality of projects rather than the number of deals. Mr. Miyata also said Russia's recent troubles including a ruble plunge wouldn't be a big concern for his bank despite its $5.7 billion loan balance in the country. "Our exposure includes deals involving blue-chip companies and Japanese-related projects so I'm not worried," Mr. Miyata said. Domestically, Mr. Miyata reiterated that his company has no immediate plans to further reduce its exposure to Japanese government bonds. "We've minimized the exposure level as much as we could," he said. Japanese banks are a big holder of JGBs, whose credit rating was recently lowered to A1 from Aa3 by Moody's Investors Service. Mitsubishi UFJ has about ¥40 trillion ($331.43 billion) in JGBs, while Mizuho Financial Group Inc., the third of Japan's three megabanks, has about ¥22 trillion. Sumitomo Mitsui has been more aggressive about reducing its exposure, holding ¥12 trillion in JGBs while shifting investments to stocks. "For investments, JGBs are no longer attractive because of razor-thin yields, but we have to hold them at a certain level as a collateral for various trading activities," said Mr. Miyata, who long served as the head of the bank's market division. Mr. Miyata said Sumitomo Mitsui might add to its Japanese government bond portfolio if the bonds begin to factor in an economic recovery and a recent modest rise in consumer prices. "But that won't happen now or early next year," he said. Write to Atsuko Fukase at Credit: By Atsuko Fukase
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 24, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640039927
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Saudi Arabia Maintains Spending Plans in 2015 Despite Oil Slide; Riyadh Will Keep Policies That Help It Head Off Political Unrest
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]25 Dec 2014: n/a.
Abstract:
[...]the kingdom will achieve "positive" economic growth, he said.
Full text: DAMMAM, Saudi Arabia--Saudi Arabia on Thursday unveiled its 2015 budget, signaling the government's intention to maintain its large spending policy despite a steep fall in oil prices in recent months that has pressured the kingdom. But Saudi King Abdullah struck a note of caution in the budget announcement, instructing officials to consider these developments by "rationalizing the expenditure," according to a statement on state television, as he noted "the developments in the global oil market that led to a large decline in oil prices." The crude-producing giant depends on the hundreds of billions of dollars in oil revenue to fund social spending, helping the monarchy head off the kind of unrest that has roiled Middle Eastern countries since 2011. "The government decision to continue expansion plans focused on building infrastructure and creating jobs could result in deficit but this shouldn't be a source of concern," Saudi economist Fadhil Albuainain said. "But it is worrying when the expanding government expenditure begins to erode the financial surpluses built over the last few years." Riyadh decided in recent weeks not to cut output in an effort to push up prices, despite its dependence on its export for 90% of its revenue. Officials justified the decision as a move to protect its market share, indicating the government's confidence that it can weather the current market volatility which oil minister Ali Al Naimi described as "a temporary situation." The kingdom didn't say at what price of oil it based its 2015 budget on, but the International Monetary Fund and others estimate a fiscal break-even price for the country at well above $90 a barrel, underlining the country's finances vulnerable to changes in the energy market. Saudi Arabia said on Thursday that it projects total expenditure in 2015 to reach 860 billion Saudi riyals ($229.3 billion), an increase of nearly 1% from the last budget, a record. It will likely use cash from its reserves to spend on development projects in key sectors such as health care and education. However, the kingdom expects to run a wider deficit of 145 billion riyals to continue with its spending plans, as projected revenue falls by nearly a third to 715 billion riyals, according to a finance ministry statement. The expected 2015 deficit is unlikely to pinch the country. The IMF estimates that Saudi Arabia has about $750 billion in foreign-exchange reserves built over the years from oil-sale revenue. The budget is in line with what the country's finance minister, Ibrahim bin Abdulaziz Al-Assaf, told the state news agency last week. He was quoted as saying the government will continue to spend heavily on "huge development projects" in health care, education, social services and the military. As a result, the kingdom will achieve "positive" economic growth, he said. The Saudi stock market, the Middle East's biggest, led a Gulf stocks rebound last week as investors cheered the minister's statement, which helped alleviate regionwide worries about Gulf states' cutting back their economic-expansion plans due to lower oil prices. Saudi shares rose 0.6% on Thursday, 19% higher since the finance minister's comments. Write to Ahmed Al Omran at Credit: By Ahmed Al Omran
Subject: Budgets; Petroleum industry; Prices
Location: Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 25, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640321892
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640321892?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia Maintains Spending Plans in 2015 Despite Oil Slide; Riyadh Will Keep Policies That Help It Head Off Political Unrest
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Dec 2014: n/a.
Abstract:
[...]the kingdom will achieve "positive" economic growth, he said.
Full text: DAMMAM, Saudi Arabia--The Saudi government unveiled a 2015 budget on Thursday that signaled a continuation of a high level of spending despite pressures from a steep fall in oil prices in recent months. The kingdom, the world's top oil exporter, depends on oil revenue to fund social spending, helping head off the kind of unrest that has roiled Middle Eastern countries since 2011. A prolonged oil-price slump could threaten such policies here and in other Gulf monarchies. Saudi King Abdullah struck a note of caution in the budget announcement, instructing officials to consider the developments that led to oil's decline by "rationalizing the expenditure." Riyadh has chosen not to cut output in an effort to push up prices, despite its dependence on oil exports. The Saudi oil minister, Ali al-Naimi--secretary-general of the Organization of the Petroleum Exporting Countries--on Sunday blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the fall in the oil price. In an indication of the government's confidence that it can weather the market volatility, Mr. al-Naimi described the slump as "a temporary situation." The kingdom didn't say on what price of oil it based its 2015 budget. The International Monetary Fund and others estimate a Saudi Arabia's fiscal break-even price for oil at well above $90 a barrel--it has been trading recently under $60--underlining the country's vulnerability to changes in the energy market. "It is worrying when the expanding government expenditure begins to erode the financial surpluses built over the last few years," Saudi economist Fadhil Albuainain said. Saudi Arabia said on Thursday that it projects total expenditure in 2015 to reach 860 billion Saudi riyals ($229.3 billion), an increase of nearly 1% from the last budget, a record. It will likely use cash from its reserves to spend ondevelopment projects in sectors such as health care and education. The kingdom expects to run a wider deficit of 145 billion riyals to continue with its spending plans, as projected revenue falls by nearly a third to 715 billion riyals, according to a finance ministry statement. The expected 2015 deficit is unlikely to pinch the country. The IMF estimates that Saudi Arabia has about $750 billion in foreign-exchange reserves built over the years from oil-sale revenue. The budget is in line with comments by Finance Minister Ibrahim bin Abdulaziz Al-Assaf to the state news agency last week that the government would continue to spend heavily on "huge development projects" in health care, education, social services and the military. As a result, the kingdom will achieve "positive" economic growth, he said. The Saudi stock market, the Middle East's biggest, led a Gulf stocks rebound last week as investors cheered the minister's statement, which helped alleviate regionwide worries about Gulf states' cutting back their economic-expansion plans due to lower oil prices. Saudi shares rose 0.6% on Thursday, 19% higher since the finance minister's comments. Write to Ahmed Al Omran at Credit: By Ahmed Al Omran
Subject: Budgets; Petroleum industry; Prices
Location: Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 26, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640419394
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640419394?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Saudis Keep Up Spending As Oil Falls
Author: Ahmed Al Omran
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Dec 2014: A.6.
Abstract:
The Saudi oil minister, Ali al-Naimi -- secretary-general of the Organization of the Petroleum Exporting Countries -- on Sunday blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the fall in the oil price.
Full text: DAMMAM, Saudi Arabia -- The Saudi government unveiled a 2015 budget on Thursday that signaled a continuation of a high level of spending despite pressures from a steep fall in oil prices in recent months. The kingdom, the world's top oil exporter, depends on oil revenue to fund social spending, helping head off the kind of unrest that has roiled Middle Eastern countries since 2011. A prolonged oil-price slump could threaten such policies here and in other Gulf monarchies. Saudi King Abdullah struck a note of caution in the budget announcement, instructing officials to consider the developments that led to oil's decline by "rationalizing the expenditure." Riyadh has chosen not to cut output in an effort to push up prices, despite its dependence on oil exports. The Saudi oil minister, Ali al-Naimi -- secretary-general of the Organization of the Petroleum Exporting Countries -- on Sunday blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the fall in the oil price. In an indication of the government's confidence that it can weather the market volatility, Mr. al-Naimi described the slump as "a temporary situation." The kingdom didn't say on what price of oil it based its 2015 budget. The International Monetary Fund and others estimate a Saudi Arabia's fiscal break-even price for oil at well above $90 a barrel -- it has been trading recently under $60 -- underlining the country's vulnerability to changes in the energy market. "It is worrying when the expanding government expenditure begins to erode the financial surpluses built over the last few years," Saudi economist Fadhil Albuainain said. Saudi Arabia said it projects total expenditure in 2015 to reach 860 billion Saudi riyals ($229.3 billion), an increase of nearly 1% from the last budget, a record. It will likely use cash from its reserves to spend on projects in sectors such as health care and education. The kingdom expects to run a wider deficit of 145 billion riyals to continue with its spending plans, as projected revenue falls by nearly a third to 715 billion riyals. The expected 2015 deficit is unlikely to pinch the country. The IMF estimates that Saudi Arabia has about $750 billion in foreign-exchange reserves. Credit: By Ahmed Al Omran
Subject: Budgets; Petroleum production; Government spending
Location: Saudi Arabia
People: Abdullah, King of Saudi Arabia
Classification: 9178: Middle East; 8510: Petroleum industry; 1110: Economic conditions & forecasts; 1120: Economic policy & planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.6
Publication year: 2014
Publication date: Dec 26, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640451718
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640451718?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop to Nearly Five-Year Lows; Buildup in Crude Supplies Has Weighed on Prices
Author: Josephs, Leslie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Dec 2014: n/a.
Abstract:
Oil producers added 7.3 million barrels in the week ended Dec. 19, the U.S. Energy Information Administration said Wednesday.
Full text: Oil futures gave back early gains to end near five-year lows on Friday as a surge in U.S. supplies weighed on the market. Light, sweet crude for February delivery fell 2%, or $1.11, to $54.73 a barrel on the New York Mercantile Exchange. The U.S. benchmark ended 63 cents away from settling at the lowest price since May 5, 2009. The February contract for Brent crude, the global benchmark, ended down 79 cents, or 1.3%, at $59.45 a barrel on the ICE Futures Europe exchange, also just shy of a new five-year low. "The market at the end of the day just gave in to the fact that inventories are so high," said Phil Flynn, senior market analyst at Price Futures Group in Chicago. "The market I think was really blindsided by the buildup last week." Oil producers added 7.3 million barrels in the week ended Dec. 19, the U.S. Energy Information Administration said Wednesday. The supply surge adds even more to a growing glut of oil that has already sparked an international showdown for market share and a nearly 50% decline in futures since June. Analysts had expected crude stockpiles to fall by 1.8 million barrels. January reformulated gasoline blendstock, or RBOB, tracked oil prices lower, falling to its lowest settlement price since April 30, 2009. The contract lost 0.4 cent, or 0.3%, to close at $1.5087 a gallon. January diesel fell 1.57 cents, or 0.8%, to close at $1.9079 a gallon, its lowest closing price since May 25, 2010. Write to Leslie Josephs at Credit: By Leslie Josephs
Subject: Petroleum industry; Crude oil
Location: United States--US Chicago Illinois
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 26, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640487400
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640487400?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Jobs Squeezed as Prices Plummet; Employers in the Energy Industry Gird for Lengthy Downturn
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Dec 2014: n/a.
Abstract:
[...]HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum.
Full text: U.S. oil and gas companies have been an engine of growth through much of an otherwise lackluster economic expansion, providing steady employment, solid wages and fierce competition for workers across wide swaths of the country. Now, after a roughly 50% plunge in oil prices, exploration and production companies are cutting capital budgets, service companies are weighing layoffs and nonenergy firms that popped up to support the industry are bracing for a protracted slowdown. One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren't renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed. "It's been breathtaking," said Jim Noe, executive vice president of Hercules, which was founded in 2004. "We've never seen this glut of supply and dislocation in oil markets. So we're not surprised to see a significant decline in demand for our services." Lower oil prices are still expected to provide an overall boost to the U.S. economy. Consumers are spending less on gasoline and more at retailers and restaurants, while many companies are benefiting from cheaper costs for energy and raw materials--giving a boost to hiring outside the energy sector. Money that would have gone to imported oil--the U.S. remains a net importer--will remain at home. The U.S. Energy Information Administration said the average U.S. household is expected to spend about $550 less on gasoline next year than in 2014. And HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum. Still, for the energy industry, the belt-tightening is starting to crimp what had been one of the brightest patches of the labor market. Within the narrow set of sectors most closely related to oil and gas extraction--including oil-field services, pipeline construction and equipment manufacturing--employment jumped by almost 50% to more than 779,000 jobs from the end of the recession through October, compared with a 7% gain across all job sectors, according to Labor Department data. Wages in such industries also saw a marked increase, the data showed. Average earnings for workers in oil and gas extraction, for example, climbed nearly 23% to more than $1,700 a week over that period, not adjusting for inflation. That compares with a 13% increase to $848 for all workers. Tom Runiewicz, a U.S. industry economist at IHS Global Insight, forecasts companies providing support services to oil and gas companies could lose 40,000 jobs by the end of 2015, about 9% of the category's total, if oil stays around $56 a barrel through the second quarter of next year. Equipment manufacturers could shed 5,000 to 6,000 jobs, or about 6% of total employment for such companies. These aren't big numbers in an economy where total nonfarm payrolls surpassed 140 million last month. But the jobs generally offer good wages and create demand for other services. "It's a bigger hit than losing service jobs in the hotel sector," said Mark Mills, a senior fellow at the Manhattan Institute who has studied the nation's energy-related employment boom. Mr. Mills, , said shale-oil and -gas production has been the nation's biggest single creator of solid, middle-class jobs across the economy since the recession ended in mid-2009. By his estimate, a total of 10 million jobs are associated with the oil and gas industry in fields as wide-ranging as transportation, construction, education, health care and food services. While many companies say it is too early to notice the impact from lower oil and gas prices, concerns are spreading and companies are planning for a lengthy period of leaner times. "Frack service companies that would not return my phone calls because we are a small operator are now blowing up my phone to go to lunch, a hockey game just to find some work for their crews," said Rob Helbing, vice president of operations at Trek Resources Inc., an oil and gas producer with operations in Texas, Oklahoma, Louisiana and Kansas. "Most service companies and [oil and gas] operators will try their best to get through the Christmas season. But just sit back and watch the layoffs that will follow." Even companies that haven't yet seen any direct effect and expect to fully weather any industry downturn are wary. "If people aren't worried, they are ignorant," said Jim Arthaud, chief executive of MBI Energy Services. The firm, based in Belfield, N.D., employs about 2,000 workers--a roughly fivefold increase from five years ago--and operates a fleet of more than 500 trucks hauling oil, sand, water and other raw materials for fracking companies. Business and rates are holding steady for MBI, and the company isn't worried about having to scale back. But if oil prices stay low, "somebody has to start cutting people," Mr. Arthaud said. An extended downturn could hit hardest in states such as North Dakota and Texas, which have benefited the most from hydraulic fracturing, or fracking, technology that allows oil to be pumped out of shale formations. "While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession," Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co., said in a recent note to clients. Mr. Feroli calculates that more than 90% of U.S. oil-production growth in the past five years has been in North Dakota and Texas. During an energy-price collapse in 1986, the Lone Star state suffered rising unemployment, falling home prices and later a banking crisis. "We think Texas will, at the least, have a rough 2015 ahead," he said. North Dakota is showing possible signs of a drop-off in activity. Within the state, the drilling-rig count fell by 10 to 183 from September through Dec. 12. Oil prices are one among several significant forces driving the slowdown, the North Dakota Industrial Commission's Department of Mineral Resources said this month. "Rig count in the Williston Basin is set to fall rapidly during the first quarter of 2015," the state said, referring to the geologic formation that is rich in oil and covers the western portion of the state. Already, many exploration and production companies are demanding savings from contractors. "We need cost cuts right away or we're going to slow down or we're going to quit doing things," Chip Johnson, president and chief executive of Houston-based Carrizo Oil & Gas Inc., told investors this month. "We're not in a real hurry to drill and frack a lot of wells until we see where the service-cost numbers go." Some service companies are trying to find a silver lining in what could be a slowdown in activity and softening of the labor market. Indeed, companies in the oil and gas industry for years have lamented the difficulty of finding skilled workers, rising wages and short tenure of many employees who are quick to hop between firms. "In my opinion, in a way it's good because it will get the companies more efficient," said Tyler Goodman, president of Borsheim Crane Service, of Williston, N.D. "Having to do everything yesterday costs a lot of money. People will quit making $150,000 a year for $25,000-a-year skills." Ian Talley contributed to this article. Write to Jeffrey Sparshott at Credit: By Jeffrey Sparshott
Subject: Recessions; Petroleum industry; Economic conditions; Employment; Crude oil prices; Gasoline prices; Economic growth; Gross Domestic Product--GDP; Natural gas utilities
Location: United States--US
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 26, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640500047
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640500047?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cheap Oil Needn't Cloud Renewable Power's 2015; Plummeting Crude Prices Don't Automatically Sound Death Knell for Solar Power or Electric Cars
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Dec 2014: n/a.
Abstract:
[...]in regions such as Southeast Asia, oil still accounts for roughly 10% of electricity generation. Where cheaper oil could have an immediate impact is on a critical fuel for renewable energy: low interest rates. Besides worries about ever-scarcer resources and climate change, cheap money has provided a big boost for renewable-energy ventures.
Full text: Cheaper oil has taken down the ruble, OPEC's credibility, and may yet upend Venezuela's government. Might it also undermine renewable energy? Investors seem to think so: The WilderHill Clean Energy index has been sliding since September and is now decidedly negative for the year. Superficially, this makes sense, as cheaper fossil fuels tend to discourage efforts to use more renewable energy. Yet oil's impact on the renewables sector is more complex. Falling prices could actually prove helpful to the likes of Tesla Motor and SolarCity by affecting one important variable: the Federal Reserve. Oil doesn't directly compete with solar and wind power in the developed world, particularly in the U.S., where less than 0.5% of electricity is generated from oil. The bigger competitor is natural gas--also cheap as a result of fracking--where prices move mostly independently of oil. Tesla and other electric vehicle makers are more exposed to oil as they compete against the internal-combustion engine. This matters little while Tesla is still a luxury-car maker, but dents hopes of electric vehicles becoming mass-market, which underpin the company's lofty valuation. Internationally, oil has a closer but still complex bearing on renewable power's prospects. The natural gas used to produce electricity in Europe and Asia is often priced off oil, so it is now more competitive. That weighs on the potential for U.S. gas exports, keeping gas cheaper for longer in the U.S.--and maintaining its competitive edge against renewable power. Moreover, in regions such as Southeast Asia, oil still accounts for roughly 10% of electricity generation. At $115 a barrel, oil-fired power costs 19 cents a kilowatt-hour compared with about 10 cents for solar in sunny, developing markets, says Sanford C. Bernstein. At $75 a barrel, the cost of oil-fired electricity drops to 12.5 cents--still more expensive, but the benefits of solar are reduced. Against that, several developing countries such as India are using the fall in the price of oil as cover to reduce fuel subsidies. So as oil prices rise again, the impact is likely to be felt more sharply in those countries, boosting renewable energy's attractiveness. What these risks have in common: They are essentially medium-term ones. It would likely take a prolonged period of low oil prices to reverse renewable energy's momentum. Where cheaper oil could have an immediate impact is on a critical fuel for renewable energy: low interest rates. Besides worries about ever-scarcer resources and climate change, cheap money has provided a big boost for renewable-energy ventures. Low-cost funding helps consumers afford the upfront investment often required to switch to technologies such as solar. After all, SolarCity's great innovation hasn't been in panels but in financing, such as selling low-yielding securities backed by lease payments on rooftop solar systems. This extends to financial markets. Tesla's market value of about $28 billion isn't based on short-term expectations: Analysts' models routinely ascribe 90% of the company's value to cash flows projected beyond 2020. Collectively, the WilderHill index's components have a market cap of about $131 billion, but net income of only around $420 million, according to FactSet. Renewable-energy companies have made tremendous strides in reducing costs and growing markets. But as investments, most remain options on some future scenario of broader success, similar to Internet stocks in the late 1990s. That doesn't mean they will necessarily fail, but it does make for a wild ride. For example, Morgan Stanley's valuation model for Tesla uses a discount rate of 11%. Increase that by just one percentage point, and the implied valuation drops by 10%. So what the Fed does on interest rates next year is crucial. While a strengthening job market suggests rates should start to rise sometime in 2015, the Fed will be cautious with inflation so close to zero. And based on oil's current trajectory, headline inflation could turn negative in the first quarter. The longer that low inflation stays the Fed's hand, the more time the renewable industry has to funnel cheap capital toward its next breakthrough, be it a revolutionary vehicle battery or smarter solar panels. Oil's volatility, especially when heading upward, makes consuming nations want to diversify away from it. This latest instance going the other way may, perversely, help that process. Credit: By Liam Denning
Subject: Alternative energy sources; Solar energy; Energy policy; Interest rates; Prices; Valuation; Natural gas; Electricity generation; Internet stocks
Location: Venezuela United States--US Southeast Asia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 26, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640500074
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640500074?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Jobs Squeezed As Prices Plummet
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]27 Dec 2014: A.1.
Abstract:
[...]HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum.
Full text: U.S. oil and gas companies have been an engine of growth through much of an otherwise lackluster economic expansion, providing steady employment, solid wages and fierce competition for workers across wide swaths of the country. Now, after a roughly 50% plunge in oil prices, exploration and production companies are cutting capital budgets, service companies are weighing layoffs and nonenergy firms that popped up to support the industry are bracing for a protracted slowdown. One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren't renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed. "It's been breathtaking," said Jim Noe, executive vice president of Hercules, which was founded in 2004. "We've never seen this glut of supply and dislocation in oil markets. So we're not surprised to see a significant decline in demand for our services." Lower oil prices are still expected to provide an overall boost to the U.S. economy. Consumers are spending less on gasoline and more at retailers and restaurants, while many companies are benefiting from cheaper costs for energy and raw materials -- giving a boost to hiring outside the energy sector. Money that would have gone to imported oil -- the U.S. remains a net importer -- will remain at home. The U.S. Energy Information Administration said the average U.S. household is expected to spend about $550 less on gasoline next year than in 2014. And HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum. Still, for the energy industry, the belt-tightening is starting to crimp what had been one of the brightest patches of the labor market. Within the narrow set of sectors most closely related to oil and gas extraction -- including oil-field services, pipeline construction and equipment manufacturing -- employment jumped by almost 50% to more than 779,000 jobs from the end of the recession through October, compared with a 7% gain across all job sectors, according to Labor Department data. Wages in such industries also saw a marked increase, the data showed. Average earnings for workers in oil and gas extraction, for example, climbed nearly 23% to more than $1,700 a week over that period, not adjusting for inflation. That compares with a 13% increase to $848 for all workers. Tom Runiewicz, a U.S. industry economist at IHS Global Insight, forecasts companies providing support services to oil and gas companies could lose 40,000 jobs by the end of 2015, about 9% of the category's total, if oil stays around $56 a barrel through the second quarter of next year. Equipment manufacturers could shed 5,000 to 6,000 jobs, or about 6% of total employment for such companies. These aren't big numbers in an economy where total nonfarm payrolls surpassed 140 million last month. But the jobs generally offer good wages and create demand for other services. "It's a bigger hit than losing service jobs in the hotel sector," said Mark Mills, a senior fellow at the Manhattan Institute who has studied the nation's energy-related employment boom. Mr. Mills, in a study this year, said shale-oil and -gas production has been the nation's biggest single creator of solid, middle-class jobs across the economy since the recession ended in mid-2009. By his estimate, a total of 10 million jobs are associated with the oil and gas industry in fields as wide-ranging as transportation, construction, education, health care and food services. While many companies say it is too early to notice the impact from lower oil and gas prices, concerns are spreading and companies are planning for a lengthy period of leaner times. "Frack service companies that would not return my phone calls because we are a small operator are now blowing up my phone to go to lunch, a hockey game just to find some work for their crews," said Rob Helbing, vice president of operations at Trek Resources Inc., an oil and gas producer with operations in Texas, Oklahoma, Louisiana and Kansas. "Most service companies and [oil and gas] operators will try their best to get through the Christmas season. But just sit back and watch the layoffs that will follow." Even companies that haven't yet seen any direct effect and expect to fully weather any industry downturn are wary. "If people aren't worried, they are ignorant," said Jim Arthaud, chief executive of MBI Energy Services. The firm, based in Belfield, N.D., employs about 2,000 workers -- a roughly fivefold increase from five years ago -- and operates a fleet of more than 500 trucks hauling oil, sand, water and other raw materials for fracking companies. Business and rates are holding steady for MBI, and the company isn't worried about having to scale back. But if oil prices stay low, "somebody has to start cutting people," Mr. Arthaud said. An extended downturn could hit hardest in states such as North Dakota and Texas, which have benefited the most from hydraulic fracturing, or fracking, technology that allows oil to be pumped out of shale formations. "While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession," Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co., said in a recent note to clients. Mr. Feroli calculates that more than 90% of U.S. oil-production growth in the past five years has been in North Dakota and Texas. During an energy-price collapse in 1986, the Lone Star state suffered rising unemployment, falling home prices and later a banking crisis. "We think Texas will, at the least, have a rough 2015 ahead," he said. North Dakota is showing possible signs of a drop-off in activity. Within the state, the drilling-rig count fell by 10 to 183 from September through Dec. 12. Oil prices are one among several significant forces driving the slowdown, the North Dakota Industrial Commission's Department of Mineral Resources said this month. "Rig count in the Williston Basin is set to fall rapidly during the first quarter of 2015," the state said, referring to the geologic formation that is rich in oil and covers the western portion of the state. Already, many exploration and production companies are demanding savings from contractors. "We need cost cuts right away or we're going to slow down or we're going to quit doing things," Chip Johnson, president and chief executive of Houston-based Carrizo Oil & Gas Inc., told investors this month. "We're not in a real hurry to drill and frack a lot of wells until we see where the service-cost numbers go." Some service companies are trying to find a silver lining in what could be a slowdown in activity and softening of the labor market. Indeed, companies in the oil and gas industry for years have lamented the difficulty of finding skilled workers, rising wages and short tenure of many employees who are quick to hop between firms. "In my opinion, in a way it's good because it will get the companies more efficient," said Tyler Goodman, president of Borsheim Crane Service, of Williston, N.D. "Having to do everything yesterday costs a lot of money. People will quit making $150,000 a year for $25,000-a-year skills." --- Ian Talley contributed to this article. Credit: By Jeffrey Sparshott
Subject: Employment; Crude oil prices; Layoffs; Petroleum industry
Location: United States--US
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112
Classification: 9190: United States; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2014
Publication date: Dec 27, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640662559
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640662559?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
What Professional Investors Expect in 2015; Many Say the Key Factors Are Rates, the Dollar and Oil
Author: Gellman, Lindsay
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Dec 2014: n/a.
Abstract:
[...]the U.S. economy has been looking better of late. [...]quarter GDP grew a surprisingly strong 5%.
Full text: As we close the book on 2014, how should you tweak your portfolio for the year ahead? On the whole, the U.S. economy has been looking better of late. Financial experts point to falling unemployment, rising stock prices and an uptick in housing starts as evidence. Third-quarter GDP grew a surprisingly strong 5%. That has prompted rumblings that things might have peaked and may soon be heading downhill. But that notion might be unfounded, say experts. "There is a strong consensus that the global economy is fading" and might enter a deflationary spiral, says James Paulsen, chief investment strategist at Wells Capital Management. "I would bet against that." Alan Zafran, managing director of First Republic Investment Management, is also bullish. "I would tell investors to take a deep breath," he says. "Stay the long-term course. And stay diversified." By some metrics, U.S. stock valuations are relatively high, financial experts say. The S&P 500 index recently traded at a price/earnings ratio of 19.5, up from 18.6 a year ago and a historical average of 15.5, The Wall Street Journal recently reported. Mr. Zafran acknowledges that for 2015, "we're looking at lower rates of return across most asset classes." We can expect to see total returns (price gains plus dividends) compounding at about 7% to 8% over the next two to three years, he says--lower than the historical average of about 10%, but decent. Investors should be discerning, and look to companies in robust financial health, says Darren Pollock, portfolio manager at Cheviot Value Management. "Companies with strong balance sheets and relatively stable growth profiles can provide investors with better downside protection while still performing well in a rising market," he says. Mr. Pollock adds that investors shouldn't feel compelled to be aggressively invested at the moment. "Investment-grade short-term bonds and money-market funds are a fine parking space for investors who want available ammunition for bargain hunting should the market provide intelligent opportunities in the year ahead," he says. And though financial experts are quick to remind us they can't predict the future, there seems to be a consensus on key factors that will influence market activity next year--if not on the direction of that influence. "Everyone's talking about rates, the dollar and oil," says Adam Parker, chief U.S. equity strategist at Morgan Stanley. Interest Rates The Federal Reserve has signaled that it plans to raise interest rates, phasing out easy-money policies designed to stimulate a faltering economy in the wake of the 2008 financial crisis. But the Fed's timeline for doing so remains unclear, and financial experts are split on whether rates will actually go up in 2015. Mr. Paulsen of Wells Capital says investors should prepare for rising interest rates and bond yields next year. He predicts the markets will "start to look at good news here as bad news"--that is, the recent balmy U.S. economic climate will serve to "accelerate and make more aggressive the Fed's need to raise rates," which will affect both stocks and bonds, he says. So it might be a good time to "lighten up on fixed income," moving toward the lower end of your preferred allocation range for the asset class, he suggests. Other experts say it might take longer for rates to increase. "We believe that the Fed won't act aggressively if/when it raises interest rates," says Mr. Pollock in emailed comments. "Interest-rate policy will remain accommodating throughout the year," he adds. Furthermore, Mr. Pollock says the rotation of voters on the Fed's 12-member Federal Open Market Committee--the group that decides on interest-rate policy--is set to lose one of this year's two hawks and add a fifth dove in 2015. Morgan Stanley's Mr. Parker says the Fed won't act until 2016, so "it is too early to be really bullish on rate-sensitive securities." Historically, he adds, the market has rallied during the first Fed action. The Dollar Mr. Zafran says the dollar is poised to strengthen next year, citing U.S. economic stability relative to volatility abroad. Europe is on the verge of a recession, he says. Japan is in one, and China's growth is slowing. Given the significant stimulus measures central banks are taking in Japan, China and elsewhere, it makes sense to have some exposure to international markets now, he says. "Non-U.S. markets are more attractively valued with higher dividends" than U.S. markets at the moment, he says. Mr. Paulsen agrees that investors should look abroad in 2015. "I would diversify away from the U.S." because emerging-market stocks are "really cheap based on fears that are probably overblown," he says. Oil Prices Plunging oil prices mean it is a good time to load up on energy stocks, say financial experts. "It is our view that every time energy stocks have underperformed this much, they've outperformed in the next six months," Mr. Parker says. Though Cheviot's Mr. Pollock is also bullish on energy stocks in the long term, he cautions against picking them up too quickly. "Oil prices will continue to fluctuate and may have more surprises in store," he says. "We recommend not going all-in at once. Investors should remain flexible enough to buy more of the top-tier integrated oil companies should their prices fall further." Growth Sectors Among other sectors offering growth opportunities next year, Mr. Parker recommends stocks in the so-called discretionary category, a catchall for goods on which consumers spend after-tax income not needed for food and other essentials. It includes cable and satellite media, autos and some retailers, he says. But it might be time to dump stocks that fall into the utilities and staples categories, he says. The tech and financial sectors are also poised for growth next year, writes MarketWatch columnist Jeff Reeves. Mr. Reeves notes that tech ETFs outperformed the broader market this year, a trend that could continue. Robust lending led to an 18% uptick in earnings for the financial sector in the third quarter, he writes. With higher interest rates on the horizon, he notes, margins for loans could soon be on their way up. Email: Credit: By Lindsay Gellman
Subject: Rates of return; Interest rates; Housing starts; American dollar; Recessions; Federal Reserve monetary policy
Location: United States--US
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Wells Capital Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 28, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640579281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640579281?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Jobs Squeezed as Prices Plummet; Employers in the Energy Industry Gird for Lengthy Downturn
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Dec 2014: n/a.
Abstract:
[...]HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum.
Full text: U.S. oil and gas companies have been an engine of growth through much of an otherwise lackluster economic expansion, providing steady employment, solid wages and fierce competition for workers across wide swaths of the country. Now, after a roughly 50% plunge in oil prices, exploration and production companies are cutting capital budgets, service companies are weighing layoffs and nonenergy firms that popped up to support the industry are bracing for a protracted slowdown. One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren't renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed. "It's been breathtaking," said Jim Noe, executive vice president of Hercules, which was founded in 2004. "We've never seen this glut of supply and dislocation in oil markets. So we're not surprised to see a significant decline in demand for our services." Lower oil prices are still expected to provide an overall boost to the U.S. economy. Consumers are spending less on gasoline and more at retailers and restaurants, while many companies are benefiting from cheaper costs for energy and raw materials--giving a boost to hiring outside the energy sector. Money that would have gone to imported oil--the U.S. remains a net importer--will remain at home. The U.S. Energy Information Administration said the average U.S. household is expected to spend about $550 less on gasoline next year than in 2014. And HSBC expects lower gasoline prices will boost consumer spending enough to add 0.4 percentage point to the U.S. growth rate for gross domestic product next year, a sizable bump for an economy that has struggled to sustain momentum. Still, for the energy industry, the belt-tightening is starting to crimp what had been one of the brightest patches of the labor market. Within the narrow set of sectors most closely related to oil and gas extraction--including oil-field services, pipeline construction and equipment manufacturing--employment jumped by almost 50% to more than 779,000 jobs from the end of the recession through October, compared with a 7% gain across all job sectors, according to Labor Department data. Wages in such industries also saw a marked increase, the data showed. Average earnings for workers in oil and gas extraction, for example, climbed nearly 23% to more than $1,700 a week over that period, not adjusting for inflation. That compares with a 13% increase to $848 for all workers. Tom Runiewicz, a U.S. industry economist at IHS Global Insight, forecasts companies providing support services to oil and gas companies could lose 40,000 jobs by the end of 2015, about 9% of the category's total, if oil stays around $56 a barrel through the second quarter of next year. Equipment manufacturers could shed 5,000 to 6,000 jobs, or about 6% of total employment for such companies. These aren't big numbers in an economy where total nonfarm payrolls surpassed 140 million last month. But the jobs generally offer good wages and create demand for other services. "It's a bigger hit than losing service jobs in the hotel sector," said Mark Mills, a senior fellow at the Manhattan Institute who has studied the nation's energy-related employment boom. Mr. Mills, , said shale-oil and -gas production has been the nation's biggest single creator of solid, middle-class jobs across the economy since the recession ended in mid-2009. By his estimate, a total of 10 million jobs are associated with the oil and gas industry in fields as wide-ranging as transportation, construction, education, health care and food services. While many companies say it is too early to notice the impact from lower oil and gas prices, concerns are spreading and companies are planning for a lengthy period of leaner times. "Frack service companies that would not return my phone calls because we are a small operator are now blowing up my phone to go to lunch, a hockey game just to find some work for their crews," said Rob Helbing, vice president of operations at Trek Resources Inc., an oil and gas producer with operations in Texas, Oklahoma, Louisiana and Kansas. "Most service companies and [oil and gas] operators will try their best to get through the Christmas season. But just sit back and watch the layoffs that will follow." Even companies that haven't yet seen any direct effect and expect to fully weather any industry downturn are wary. "If people aren't worried, they are ignorant," said Jim Arthaud, chief executive of MBI Energy Services. The firm, based in Belfield, N.D., employs about 2,000 workers--a roughly fivefold increase from five years ago--and operates a fleet of more than 500 trucks hauling oil, sand, water and other raw materials for fracking companies. Business and rates are holding steady for MBI, and the company isn't worried about having to scale back. But if oil prices stay low, "somebody has to start cutting people," Mr. Arthaud said. An extended downturn could hit hardest in states such as North Dakota and Texas, which have benefited the most from hydraulic fracturing, or fracking, technology that allows oil to be pumped out of shale formations. "While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession," Michael Feroli, chief U.S. economist at J.P. Morgan Chase & Co., said in a recent note to clients. Mr. Feroli calculates that more than 90% of U.S. oil-production growth in the past five years has been in North Dakota and Texas. During an energy-price collapse in 1986, the Lone Star state suffered rising unemployment, falling home prices and later a banking crisis. "We think Texas will, at the least, have a rough 2015 ahead," he said. North Dakota is showing possible signs of a drop-off in activity. Within the state, the drilling-rig count fell by 10 to 183 from September through Dec. 12. Oil prices are one among several significant forces driving the slowdown, the North Dakota Industrial Commission's Department of Mineral Resources said this month. "Rig count in the Williston Basin is set to fall rapidly during the first quarter of 2015," the state said, referring to the geologic formation that is rich in oil and covers the western portion of the state. Already, many exploration and production companies are demanding savings from contractors. "We need cost cuts right away or we're going to slow down or we're going to quit doing things," Chip Johnson, president and chief executive of Houston-based Carrizo Oil & Gas Inc., told investors this month. "We're not in a real hurry to drill and frack a lot of wells until we see where the service-cost numbers go." Some service companies are trying to find a silver lining in what could be a slowdown in activity and softening of the labor market. Indeed, companies in the oil and gas industry for years have lamented the difficulty of finding skilled workers, rising wages and short tenure of many employees who are quick to hop between firms. "In my opinion, in a way it's good because it will get the companies more efficient," said Tyler Goodman, president of Borsheim Crane Service, of Williston, N.D. "Having to do everything yesterday costs a lot of money. People will quit making $150,000 a year for $25,000-a-year skills." Ian Talley contributed to this article. Write to Jeffrey Sparshott at Credit: By Jeffrey Sparshott
Subject: Recessions; Petroleum industry; Economic conditions; Employment; Crude oil prices; Gasoline prices; Economic growth; Gross Domestic Product--GDP; Natural gas utilities
Location: United States--US
Company / organization: Name: Hercules Offshore Corp; NAICS: 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 28, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640638175
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Big Asian Debt Issuers Feel Pinch; Oil Price Drop, China Housing Slowdown Weigh on Energy and Property Companies
Author: Law, Fiona
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2014: n/a.
Abstract:
"Given the drop in commodity prices, investors have become more cautious," said Herman van den Wall Bake, Asia head of fixed income capital markets at Deutsche Bank AG. He said the lack of market liquidity at year-end has contributed to volatile bond prices.
Full text: Asian companies issued record amounts of bonds this year, but some of that debt is turning sour as falling oil prices and a shakeout in China's housing market hit energy companies and real-estate developers. Oil-and-gas companies and property developers were the biggest issuers in the year through mid-December, raising a combined 44% of the region's corporate bonds issued in U.S. dollars, euros and yen, figures from data provider Dealogic show. The debt-market boom has been fueled by yield-hungry money managers turning to Asia as the world's major central banks keep interest rates low. At the same time, companies are eager to load up on cheap debt ahead of expected increases in global borrowing costs next year. But a steady decline in new-home prices in major Chinese cities, as developers compete to reduce inventory, has hit Chinese property companies hard, dragging their bond prices down by as much as 25% since early December. Problems are cropping up throughout the sector. Midsize developer Kaisa Group Holdings Ltd. said last week that home sales at many of its residential- and commercial-property projects in Shenzhen, where it is based, have been blocked by the local government. The company didn't elaborate and the reasons for the government's action aren't known. On Monday, the yield on Kaisa's three-year bonds surged as high as 28% from 13.9% on Friday, after two of the company's senior executives resigned. Yields move inversely to prices. The company didn't immediately respond to a request for comment. Oil companies are also being battered as falling energy prices erode profit margins. Chinese oil producer Cnooc Ltd.'s short-term bonds have lost around 2% in value from a June peak. "Given the drop in commodity prices, investors have become more cautious," said Herman van den Wall Bake, Asia head of fixed income capital markets at Deutsche Bank AG. He said the lack of market liquidity at year-end has contributed to volatile bond prices. "Investors and dealers alike are not keen on loading the boat in this environment." Stocks also have been hit as investors pull cash out of Asia's emerging markets. The MSCI AC Asia ex-Japan Index, a broad measure of equities across the region, fell 12.6% since early September before rebounding 3% over recent sessions. Outflows from the region's equity markets totaled $3 billion in the three weeks through Dec. 10, according to EPFR data and ANZ Research. And analysts say Asian equity and bond markets could slump further. "The region is likely to be dragged down as losses hit global emerging-market portfolios and fund managers start to raise cash in anticipation of potential redemption," said Edwin Chan, head of Asia credit research at UBS AG. "As market liquidity declines in December, investors will need to resort to selling the still-liquid assets to raise cash," Mr. Chan said. Oil companies in Asia could sail through the storm, except for some small competitors, analysts say, as most of them enjoy state support and have ample cash from a favorable operating environment over the past few years. But property developers could see more headwinds despite recent steps by Beijing to boost the economy. cut its benchmark interest rate last month and is introducing measures such as relaxing banks' ability to use deposits to issue loans. Still, if the price of oil keeps falling, there will be a "negative spiral effect to other commodities prices, like coal, copper, palm oil and so forth. In particular, Southeast Asian governments' current-account position would deteriorate as most nations there are big net exporters of these commodities," said Arthur Lau, head of Asia ex-Japan fixed income at PineBridge Investments. He said markets will be even choppier in the first half of next year. Write to Fiona Law at Credit: By Fiona Law
Subject: Natural gas utilities; Housing prices; Bond issues
Location: China United States--US
Company / organization: Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Kaisa Group Holdings Ltd; NAICS: 236116, 237210; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 29, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640661947
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640661947?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Close at Five-Year Lows on Glut Expectations; Both Light, Sweet Crude and Brent Crude for February Delivery Were Trading at Their Lowest Price Since May 2009
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2014: n/a.
Abstract:
According to PVM Consultancy, Lybian oil output is down to 230,000 barrels a day, a sharp drop from the country's export capacity of 1.3 million barrels a day.
Full text: Oil prices hit fresh five-year lows on Monday on signs a global glut will keep growing. The latest losses come after a period where oil markets had shown signs of steadying. They all-but clinch the petroleum sector's status as the worst-performer among commodities this year. Both the U.S. and global benchmarks lost more than 2% after Genscape Inc., an energy data service, released figures showing another big build in U.S. oil supplies. The data allowed traders to shrug off worsening violence in oil-rich Libya that had sent futures higher early in the session. Light, sweet crude for February delivery, the U.S. benchmark, ended down 2.1% at $53.61 a barrel on The New York Mercantile Exchange. The February contract for Brent crude settled down $1.57, or 2.6%, to $57.88 a barrel on London's ICE Futures exchange. The closing prices were the lowest since May 2009, adding to a series of new lows oil markets have set this year. Prices are falling because of a sharp rise in U.S. production that has crowded out imports, leaving the global market oversupplied. The Organization of the Petroleum Exporting Countries also opted to maintain its production quotas at its November meeting, sending the market into a tailspin. Oil's slump in recent months is due to "swelling supplies, and more of it coming online," said John Kilduff, founding partner of Again Capital in New York, which invests in energy. "It's going to continue to grind lower until somebody blinks." Brent crude, the global benchmark, is down 48% year-to-date. Gasoline is the only commodity performing worse in 2014, just fractions of a percentage point worse than Brent. Nymex crude oil is down 46%, with heating oil down 40%. The four contracts are the worst performers among the 22 markets tracked in the Bloomberg Commodity Index, which many funds use to guide their investments. Energy's poor performance is a major reason the Bloomberg index is down roughly 15% this year, despite gains in markets such as cattle and coffee. Oil and petroleum products make up about 22% of the weighting in the index, the largest portion for any group of commodities. For investors who failed to bet on falling oil prices or who lost money wagering that prices would rise, "it's pretty hard to crawl out from underneath that" to post strong yearly gains, said Bill O'Grady, chief market strategist at Confluence Investment Management, which oversees $2.6 billion. Mr. O'Grady's funds bet that oil prices would rise until last month, and he now has no positions in crude oil. He expects prices to keep falling. "We're overshooting to the downside, but we'll probably stay weak until you get some kind of catalyst," such as a geopolitical event that takes supplies off the market, he said. Prices had appeared to stabilize in the last two weeks, even rising early Monday after a fire destroyed 800,000 barrels of crude at an oil terminal in Libya. The fire raised questions about whether the country could maintain its unexpectedly robust exports amid widening armed clashes. But with fires now partially extinguished, traders turned their attention back to world-wide oversupply. There is more oil likely coming from the Gulf of Mexico and from U.S. pipeline expansions, and a small, temporary disruption isn't enough to fundamentally change the market, traders said. On Monday, Genscape estimated a 2 million barrel addition to stockpiles at the storage hub Cushing, Okla., where the Nymex contract is priced, for the week ended Dec. 26, traders said. The Genscape data is a widely watched precursor to the U.S. Energy Information Administration's own weekly update gathered from producers and storage operators, which is published every Wednesday. Last week's EIA update showed an unexpected build of 7.3 million barrels. Nymex oil prices fell 2.2% that day. Demand isn't catching up to supply, even as gasoline prices fall below $2 a gallon in some parts of the U.S. Benoît Faucon and Nicole Friedman contributed to this article. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Petroleum industry; Futures; Petroleum production
Location: United States--US Libya
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 29, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640663997
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640663997?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil and Gas Regulatory Push Coming from Obama Administration; Methane Emissions, Fracking, Arctic Drilling, Rail Tanker Cars All Would Be Subject to New Rules
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2014: n/a.
Abstract: None available.
Full text: The Obama administration is planning to release in the coming months a series of regulations on the oil and natural gas industry, a response to the nation's energy boom that also is aimed at burnishing President Barack Obama's environmental legacy in his final two years. The coming rules--at least nine in total--would include the first-ever federal standards addressing methane emissions, stricter controls on hydraulic fracturing, drilling requirements in the Arctic, new rules governing oil shipped by trains and tougher standards on offshore drilling technology. The repercussions for the industry could be higher operating costs and fewer incentives to drill on public lands. Mr. Obama and his environmental backers say new regulations are needed to address the impacts of the surge in oil and gas drilling and production. "The large number of imminent regulations may be a sign that the White House is greening up its oil-and-gas policy," said Kevin Book, managing director of Clearview Energy Partners, a nonpartisan energy research firm that tracks federal regulations. "Fracking produced numerous regulatory responses at multiple levels, and a lot of the federal rules have been pending for a long time." In its first six years, the administration released very few regulations directly affecting the oil-and-gas industry and instead rolled out several significant rules aimed at cutting air pollution from the coal and electric-utility sectors. Some of the coming rules have been in the works for months or even years, and others are required by current laws or court decisions. The U.S. is now the world's largest natural-gas producer and is on track to become the biggest oil producer in 2015. Since 2008, U.S. oil production has surged 74% to 8.8 million barrels a day, while natural-gas production climbed 22% to 2.7 trillion cubic feet in September, according to the U.S. Energy Information Administration. Oil and gas production on public lands has declined 16% and 24%, respectively, over the same period, according to EIA data. Several states have enacted regulations in response to the nation's increased production, but the federal government hasn't. "I think it is fair to say that given the changes in technology and the significant changes that we've seen in terms of domestic oil-and-gas production, there is a need to keep that regulatory process up-to-date," said Heather Zichal, an energy consultant who was a top energy and climate adviser in the White House until October 2013. The White House and energy companies have clashed over proposed fossil-fuel regulations, particularly a rule proposed last spring by the Environmental Protection Agency aimed at cutting carbon emissions from the nation's power plants. The coming oil-and-gas regulations are likely to intensify that tension. White House counselor John Podesta said the administration's plans are part of a continuing effort to move to cleaner sources of power while creating jobs and preserving energy security. "Across the federal government, we've taken steps to develop our oil-and-gas resources safely and responsibly, including by partnering with industry and working with states," he said via email. One of the most-watched actions is what the EPA does about methane emissions from oil and natural gas drilling operations. The agency is expected to announce in January whether it will expand an existing regulation to further regulate methane indirectly, which is the industry's preferred option, or begin regulating methane emissions directly, a broader regulatory approach environmental groups are pushing. Industry executives cite the monthslong drop in oil prices as an argument against the methane regulations. Greg Guidry, an executive vice president at Shell, said at an event in Washington recently that he doesn't want EPA to "impose unnecessary costs and burdens on an industry challenged now by a sustained low-price environment." The Interior Department, which has jurisdiction over public lands, also is planning to propose a rule in April that would set a standard for how much methane companies can either vent into the atmosphere or flare off when drilling for oil and natural gas, whose main component is methane. Janet McCabe, the acting assistant administrator for air at EPA, said recently that cutting methane emissions is an important part of the climate agenda Mr. Obama unveiled in June 2013 and that the administration is working to avoid any duplicative regulatory efforts. "We work closely with our partners at the Interior Department to make sure we're not walking into situations...where we have inconsistent expectations, duplicative expectations," said Ms. McCabe, noting that the regulations are being prompted by "an increasing awareness and concern of the role that methane emissions are playing in global climate concerns." The Transportation Department is expected to issue a final rule by March requiring tougher standards on oil shipped by rail, including phasing out older railcars within two years. Thanks to the boom in oil production and lack of pipeline infrastructure, oil shipped by rail has risen from almost nothing in 2005 to more than 400,000 tank cars of crude oil in 2013, according to the Association of American Railroads. Through the first half of this year, shipments rose an additional 11.7%. The rule, which the department proposed in draft form earlier this year, followed a series of fiery oil-train accidents that began in July 2013 with a derailment and explosion in Lac-Mégantic, Quebec, which killed 47 people. Both the oil and rail industries say they would need more than two years to comply with the rule. Jack Gerard, president and CEO of the American Petroleum Institute, whose organization is among those calling for more time to comply with the pending rail rule, said the upshot of several of these rules is that Mr. Obama is following through on his pledge to act alone without Congress, a move he opposes. "There's this attitude that if the people and the democratically elected institutions don't agree, we're going to go it alone," Mr. Gerard said in an interview. "I think that attitude is permeating some of the regulatory bodies." Write to Amy Harder at Credit: By Amy Harder
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 29, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640762607
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640762607?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Deadline for Decommissioned Tankers Set for Thursday; The Move To Bar Single-Hulled Tankers Grew Out of the 1989 Exxon Valdez Oil Spill
Author: Gay, Mara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2014: n/a.
Abstract:
The U.S. Coast Guard is sending inspectors aboard commercial vessels in New York Harbor to help decommission single-hull tankers ahead of a Thursday deadline, part of a decades-long phase-out in the wake of the 1989 Exxon Valdez oil spill.
Full text: The U.S. Coast Guard is sending inspectors aboard commercial vessels in New York Harbor to help decommission single-hull tankers ahead of a Thursday deadline, part of a decades-long phase-out in the wake of the 1989 Exxon Valdez oil spill. More than a quarter century after a supertanker dumped 12 million gallons of crude oil off the coast of Alaska, single-hulled vessels are set to be banned from U.S. waters. All U.S.-flagged ships that carry oil are required to have double hulls, which add a layer of protection and are designed to prevent accidental spills. The phase-out of single-hulled vessels is taking place under the Oil Pollution Act of 1990, also known as OPA, which expanded the federal government's enforcement authority and made it easier to hold companies liable for spills. "If you're going to be carrying something like oil, you're going to want some safety standards. It just makes sense," said U.S. Coast Guard Lt. Elizabeth Newton. "You have cargo tanks in the middle, then a void, then the shell of the vessel itself. Heaven forbid it were to run aground, there would be an added precaution." As of Jan. 1, any oil carrying ship with a single hull still out on the water will be subject to fines, Coast Guard officials said. So far this month, the Coast Guard has inspected more than a dozen vessels in New York City waters. "They would be in a lot of trouble if they decided to move around," Lt. Newton said. She said that while a couple carriers "have been dragging their feet," she expected all of them to be in full compliance by the deadline. Credit: By Mara Gay
Subject: Oil spills; Environmental protection
Location: United States--US Alaska New York Harbor
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 29, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640765755
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640765755?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Firms Pull Back on Rigs as Prices Fall; Output Remains High Despite Retrenching
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Dec 2014: n/a.
Abstract:
Vertical rigs drill down thousands of feet to access traditional oil reservoirs, while horizontal drilling rigs are often used in combination with hydraulic fracturing, or fracking, to tap oil reserves trapped in shale rock formations.
Full text: U.S. oil producers appear to be scaling back amid low crude prices, with the onshore drilling-rig count falling by 37 last week, according to oil-field services company Baker Hughes Inc. It was the third consecutive week the drilling rig count fell and one of the biggest since crude-oil prices started to tumble in June. Analysts say energy companies operating in the U.S. will need slow their oil production to help bolster international crude prices. Rigs drilling for oil in the U.S. last week dropped by 37 to 1,499, Baker Hughes said Monday. This follows a 10-rig drop the previous week and a 29-rig decline the week before that. "We think it will fall every week for the next three months," analysts at Credit Suisse said of the U.S. rig count. "We expect the market to lose at least 200 vertical and 200 horizontal rigs and it could easily be more than that." Vertical rigs drill down thousands of feet to access traditional oil reservoirs, while horizontal drilling rigs are often used in combination with hydraulic fracturing, or fracking, to tap oil reserves trapped in shale rock formations. Taking oil rigs out of service means fewer wells will be drilled, but the energy industry more efficiently produces crude so more oil can be wrung from fewer wells. U.S. oil output during the week hit 9.14 million barrels a day earlier this month, marking the highest American production on record since the U.S. Energy Information Administration started tracking it in 1983. The EIA is projecting that U.S. oil production will continue to rise to 9.3 million barrels a day during 2015, despite depressed crude-oil prices. Nearly 95% of new oil production in the U.S. between 2011 and 2013 came in seven key regions where fracking is common, including North Dakota's Bakken formation, the Eagle Ford Shale in South Texas and the Permian Basin of West Texas and New Mexico, the EIA said. Credit: By Dan Molinski
Subject: Petroleum industry; Oil reserves; Drilling; Petroleum production; Hydraulic fracturing
Location: United States--US
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 29, 2014
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640765921
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640765921?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Progressive Case for Fracking; Tumbling oil prices have sent repressive regimes around the world reeling. Liberals should rejoice.
Author: Bloodworth, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
Oil wealth helps keep dictators in their palaces by allowing vast military expenditure to repress dissent and providing a ready pool of money with which to co-opt their populations through generous welfare stipends. Despite legitimate environmental concerns about fracking and horizontal drilling, the long-term impact of shale on the global oil price means that regimes that have long relied on a single export for their survival are facing a potentially ruinous economic future.
Full text: Christmas came early for the world's liberal democracies this year, with news in mid-December that repressive regimes from Russia to Venezuela and from Iran to Belarus are tumbling down an economic spiral. Who or what should we thank for this geopolitical yuletide? The neocons? Pro-democracy protesters? George W. Bush and Tony Blair? No. Thank instead American shale producers. The shale-gas and hydraulic-fracking revolution is lighting a figurative bonfire under the world's petrocracies. Dictatorships that for years blackmailed the West in the knowledge that we would come crawling back for the black stuff are now catching a glimpse of a bleak future. As the American people and companies shift more of their consumption to cheaply produced domestic energy, the geopolitical leverage of oil-rich autocrats diminishes. A barrel of crude on Monday sold for less than $60, down nearly 50% since June when it went for $115. Take that, ayatollah. This is a price drop made in the shale-rich heartlands of the U.S. Between 2007 and 2012, shale production in America jumped by more than 50% a year. In that time the shale share of total U.S. gas production rose to 39% from 5%. Last year the U.S. overtook Russia as the world's leading energy producer; next year America is projected to overtake Saudi Arabia as the world's biggest producer of crude oil. One consequence is a massive fall in the price of oil just a few years after the words "peak oil" were being bandied around as gospel by environmentalists. Peak oil now looks like one of the most outlandish theories of our era. Rather than contract, the global supply of energy continues to diversify and expand, in no small part because of the boom in American shale. This ought to put a smile not only on the faces of free-market economists, but liberals and progressives, too. As America becomes a net exporter of energy, shale could help topple some of the world's worst regimes. The relationship between oil wealth and autocracy is well-established, with a number of studies showing that democracy is less likely in oil-rich nations. Oil wealth helps keep dictators in their palaces by allowing vast military expenditure to repress dissent and providing a ready pool of money with which to co-opt their populations through generous welfare stipends. Sitting atop large and valuable energy reserves also gives autocrats the luxury of keeping a tight lid on economic entrepreneurship. Winning the geographical lottery ensures that the oil money comes in regardless of how little revenue the rest of the economy generates. Consider Russia and Venezuela. At least some voters in both countries have tolerated the emaciation of civil society while the Putinist and Chavista regimes have learned to use oil money to fend off unrest and buy off loyal cronies. Meanwhile, the armed forces in both nations have been placated with high-tech toys and rising salaries. Despite legitimate environmental concerns about fracking and horizontal drilling, the long-term impact of shale on the global oil price means that regimes that have long relied on a single export for their survival are facing a potentially ruinous economic future. Russia's economic woes are well-documented, largely due to the fact that oil revenues make up 45% of the government budget. But elites in Iran and Venezuela also have the jitters and have been pleading with OPEC, the world's largest oil cartel, to cut production to prevent the price of oil from falling any lower. Venezuela needs a price of $151 a barrel next year to balance its budget while Iran requires around $131. So far Sunni Saudi Arabia has been willing to tolerate low prices in order to hurt its Shiite rival in Tehran. Yet Riyadh is no less worried about the long-term consequences of shale than are the Iranians--it simply has a bigger buffer of foreign-exchange reserves with which to soak up the short-term consequences. If oil stays at $60 per barrel in 2015, Riyadh will run a deficit equal to 14% of gross domestic product. Some of the most vociferous opponents of fracking are liberals, yet the shale revolution has the potential to undermine some of the world's most illiberal regimes, in the process freeing the U.S. from its bondage to Saudi Arabia, as demanded by progressives for decades. Thuggish governments in Caracas, Moscow and Tehran don't much like shale either, which ought to endear it still further to democrats. This is not to dismiss the environmental concerns regarding shale extraction in urban areas, nor to call for the abandonment of a long-term strategy in the West for the development of green renewables. Yet it is to recognize that American shale producers are engaged in a price war with some of the world's vilest regimes. In that respect, the left should get on board the fracking revolution. Mr. Bloodworth is editor of the blog Left Foot Forward. Credit: By James Bloodworth
Subject: Petroleum industry; Energy economics; Gross Domestic Product--GDP; Geopolitics
Location: Belarus Russia United States--US Iran Venezuela
People: Blair, Tony Bush, George W
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640769617
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640769617?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Shares Weaken; Falling Oil Prices, Political Uncertainties in Greece Weigh on Asia's Stock Markets
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract: None available.
Full text: Stocks fell in Japan and Australia on Tuesday, as investors weighed the latest , a slightly weaker dollar and another . The Nikkei Stock Average was down 0.9%, following a . Investors were turning toward global concerns, including a political shake-up in Greece, which is raising the risk of a rollback in austerity measures, and a continued slump in oil prices. Overnight, both light sweet crude and brent crude hit fresh five-year lows. Tokyo was also lower as the U.S. dollar traded at ¥120.55, slightly off from ¥120.67 late Monday in New York. A weaker dollar is often a negative for Japanese exporters making dollar earnings abroad. Australia's S&P/ASX 200 was down 0.6%. In China, buying cooled after the market appeared to have largely factored in the country's , which allows banks to lend more. The Shanghai Composite Index was up 0.1% after hitting a fresh 52-week high on Monday. Hong Kong's Hang Seng Index was roughly flat. Malaysia-based AirAsia Bhd.'s stock was up 1.5%, rebounding from an 8.5% decline Monday. Authorities still haven't found a with 162 people aboard. The benchmark FTSE Bursa Malaysia was down 0.6%. Write to Chao Deng at Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640777534
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640777534?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Libya Struggles to Extinguish Oil Storage Tanks After Assault
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
Extremist groups are making a renewed push to seize the country's oil resources, Libyan Foreign Minister Mohamed Dayri said Sunday, according to the Associated Press.
Full text: Firefighters worked Monday to extinguish a blaze at Libya's largest oil terminal, where storage tanks have been burning for days amid fighting. The fire at As Sidra terminal in eastern Libya ignited after a rocket hit an oil storage tank. Some 800,000 barrels of crude have been destroyed. Extremist groups are making a renewed push to seize the country's oil resources, Libyan Foreign Minister Mohamed Dayri said Sunday, according to the Associated Press. He said the assault on eastern oil terminals was carried out by militias based in the western city of Misrata, who are loyal to a rival Islamist-backed government in the capital Tripoli. The internationally recognized government is based in the eastern city of Tobruk. As Sidra is controlled by anti-Islamist militiamen allied with that government. Crude-oil futures prices closed at five-year lows Monday on expectations that a global glut of crude could keep growing. Both benchmarks initially got a boost from news of the supply disruptions in Libya. Unexpectedly robust production in Libya has played a central role in global supplies exceeding demand. Libya has appealed to Italy, Germany and the U.S. to send firefighters to battle the blaze.
Subject: Petroleum industry
Company / organization: Name: Associated Press; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640779786
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640779786?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Libya Struggles to Extinguish Oil Storage Tanks After Militant Assault on Eastern Terminals
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Dec 2014: A.12. [Duplicate]
Abstract:
Extremist groups are making a renewed push to seize the country's oil resources, Libyan Foreign Minister Mohamed Dayri said on Sunday, according to the Associated Press.
Full text: Firefighters worked Monday to extinguish a blaze at Libya's largest oil terminal, where storage tanks have been burning for days amid fighting. The fire at As Sidra terminal in eastern Libya ignited after a rocket hit an oil storage tank. Some 800,000 barrels of crude have been destroyed. Extremist groups are making a renewed push to seize the country's oil resources, Libyan Foreign Minister Mohamed Dayri said on Sunday, according to the Associated Press. Mr. Dayri said the assault on eastern oil terminals was carried out by militias based in the western city of Misrata, who are loyal to a rival Islamist-backed government in the capital Tripoli. The internationally recognized government is based in the eastern city of Tobruk. As Sidra is controlled by anti-Islamist militiamen allied with that government. Though crude-oil futures prices closed at five-year lows Monday, they were initially lifted by news of the supply disruptions in Libya. Unexpectedly robust production in the country has played a role in global supplies exceeding demand. Libya has appealed to Italy, Germany and the U.S. to send firefighters to battle the blaze. -- WSJ Roundup
Subject: Petroleum industry; Fires
Location: Libya
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.12
Publication year: 2014
Publication date: Dec 30, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640791302
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640791302?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
City News: A New Phase for Oil Tankers
Author: Gay, Mara
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Dec 2014: A.16.
Abstract:
The Coast Guard is sending inspectors aboard commercial vessels in New York Harbor to help decommission single-hull tankers ahead of a Thursday deadline, part of a decadeslong phaseout in the wake of the 1989 Exxon Valdez oil spill.
Full text: The Coast Guard is sending inspectors aboard commercial vessels in New York Harbor to help decommission single-hull tankers ahead of a Thursday deadline, part of a decadeslong phaseout in the wake of the 1989 Exxon Valdez oil spill. More than a quarter century after a supertanker dumped 12 million gallons of crude oil off the coast of Alaska, single-hulled vessels are set to be banned from U.S. waters. All U.S.-flagged ships that carry oil are required to have double hulls, which add a layer of protection and are designed to prevent accidental spills. The phaseout of single-hulled vessels is taking place under the Oil Pollution Act of 1990, also known as OPA, which expanded the federal government's enforcement authority and made it easier to hold companies liable for spills. "If you're going to be carrying something like oil, you're going to want some safety standards. It just makes sense," said Coast Guard Lt. Elizabeth Newton. "You have cargo tanks in the middle, then a void, then the shell of the vessel itself. Heaven forbid it were to run aground, there would be an added precaution." As of Jan. 1, any oil carrying ship with a single hull still out on the water will be subject to fines, Coast Guard officials said. So far this month, the Coast Guard has inspected more than a dozen vessels in New York City waters. "They would be in a lot of trouble if they decided to move around," Lt. Newton said. She said that while a couple carriers "have been dragging their feet," she expected all of them to be in full compliance by the deadline. Credit: By Mara Gay
Subject: Oil spills; Environmental protection; Tankers
Location: New York Harbor
Company / organization: Name: Coast Guard-US; NAICS: 928110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2014
Publication date: Dec 30, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640791445
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640791445?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Iron Ore Slump Could Outpace Oil's; Oversupply, China Slowdown Weighing on Iron
Author: Hoyle, Rhiannon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
Among those selected commodities, energy contracts have been some of the worst performers so far this year, as crude oil prices fall to five-year lows on oversupply worries.
Full text: SYDNEY--Iron ore is set to end the year down almost 50%, making it potentially the worst-performing major commodity of 2014. Driving the decline has been surging output from iron-ore mines in Australia and elsewhere that has flooded the global market with supply even as China, the world's biggest buyer of the resource, is slowing down. A slight uptick in iron ore prices this week has been overshadowed by its dramatic yearlong slide, which could outpace even the fall in oil. Some analysts believe the steelmaking ingredient will continue falling in the new year. Last week, iron ore prices dropped to a fresh 5 1/2-year low amid an uncertain outlook for demand. Rising supply in particular from Australia, which accounts for around half of all the iron ore traded by sea, has underpinned the market's slump. "A lot of people were calling for a rebound heading into the back part of this year, but that hasn't really materialized," said Stan Shamu, a Melbourne-based strategist at brokerage IG. Other analysts note iron-ore prices often do rise in the last months of the year as steelmakers buy before the northern-hemisphere winter, but restocking this year has been muted. To be sure, stockpiles of raw material at China's ports have recently declined, indicating that there is still some demand for ore, and industry analysts say appetite may yet recover heading toward the Lunar New Year holidays--before which Chinese steelmakers also typically top up inventories. The price of iron ore bounced from last week's low of US$65.60 a metric ton to trade at US$67.90 a ton Monday, according to The Steel Index, a data provider. Iron ore started the year above US$134 a ton. The fall this year is by far its sharpest annual decline since The Steel Index began publishing a spot price for the commodity in late 2008, at a time when appetite for the bulk commodity was intensifying due to Chinese demand. The derivatives market for iron ore is still maturing, with prices historically negotiated annually between miners and steelmakers. While iron ore is the world's most-traded commodity after oil, it isn't included in major commodity gauges like the Bloomberg Commodity Index, which tracks 22 markets including oil, copper and coffee. Among those selected commodities, energy contracts have been some of the worst performers so far this year, as crude oil prices fall to five-year lows on oversupply worries. As of Tuesday, Brent oil futures are down about 47% this year. For iron ore, a global glut has also been the main concern. Barclays analysts say there are few reasons to be bullish over the next year or two as even more supply enters the market from new and recently expanded mines. Still, they say the downturn should slow as prices fall near or below the cost of production for some producers, adding that they are unlikely to fall sustainably below US$65 a ton. Others are less optimistic. Citi analysts last month slashed their price forecast for 2015 by nearly a fifth to US$65 a ton, and said prices may dip into the US$50-to-US$60 range next year as more iron ore is dug up. The wild-card for the commodity's outlook in 2015, said IG's Mr. Shamu, will be the way Beijing handles slowing growth--with any stimulus or support for the country's weak property market critical for a recovery in iron-ore prices. "For now, China has a lot of supply and a lot of choice as to where they buy from and what quality they buy," he said. "I think it'll be a while yet before we see any real game changer for iron ore." Write to Rhiannon Hoyle at Credit: By Rhiannon Hoyle
Subject: Steel industry; Mines; Crude oil prices; Iron compounds
Location: China United States--US Australia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640795161
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640795161?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Fall Amid Concerns About Greece, Renewed Oil-Price Slide; Stoxx Europe 600 Index Down 0.9% After Turbulent Session on Monday
Author: Cox, Josie; Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
A sharper-than-expected decline in Spanish consumer prices further stoked expectations that the European Central Bank will have to launch a bond-buying stimulus program to head off deflation across the eurozone.
Full text: European stock markets fell Tuesday, weighed by and a renewed slide in the price of oil. In the penultimate trading day of 2014 for most markets, the Stoxx Europe 600 fell 0.9% following a turbulent session Monday. Athens' main stock exchange, which closed 3.9% lower Monday, declined an additional 0.5%, taking losses so far this year to nearly 30% and this month to more than 15%. On Monday, a third and final round of a Greek , triggering a snap election to be held on Jan. 25. That could yield power to antiausterity parties, dealing a sharp blow to the country's international bailout program. "Clearly, the prospect of fresh negotiations between Greece and its creditors is a troubling prospect for investors and it is far from clear to what extent compromises can be made," said a currency strategist at BNY Mellon. He said that perhaps the bigger question, though, "is whether the rise of [the antiausterity party Syriza] will give further fuel to like-minded parties across the eurozone." Radical leftist Syriza has threatened to tear up the economic overhaul and austerity program that has accompanied the country's international bailout, and is . Fitch Ratings said the situation increases the risks to Greece's creditworthiness, while strategists at AXA Investment Management said their worst-case scenario is that "dramatic political events" lead to Greece defaulting on its bonds and eventually leaving the eurozone. They said, however, that the most likely scenario is that this doesn't happen, and that both the market impact and contagion of any volatility proves limited in scope and short-lived in duration. Elsewhere in Europe, Germany's DAX closed a shortened session down 1.2%. The benchmark has added 2.7% in 2014 as a whole. France's CAC 40 fell 1.6% and London's FTSE 100 slipped 1.3%. Bond markets, in contrast, shrugged off concerns over Greece. A sharper-than-expected decline in Spanish consumer prices further stoked expectations that the European Central Bank will have to launch a bond-buying stimulus program to head off deflation across the eurozone. German 10-year yields touched a fresh all-time low of 0.534%. Yields on riskier eurozone bonds also fell having risen on Monday; Spain's 10-year yield hitting a record low of 1.59%. Energy stocks led declines in European equities, with oil and gas shares on the Stoxx 600 down 1.8%, amid a in the price of oil. Brent crude fell 0.9% to $57.36 a barrel. A barrel of crude now costs about half of what it did just six months ago, and oil prices are set to post their largest yearly losses since 2008, when prices plummeted from record highs amid a global recession. Analysts at Intesa Sanpaolo said they now see inflation temporarily dropping to negative levels in both the eurozone and the U.S. as a result. "Exports to oil-exporting countries will drop drastically and some of them may be subject to financial instability," they added. Still, Russia's ruble, also usually correlated with the price of oil, received a boost from news that opposition leader Alexei Navalny had been rather than being sent to prison on charges of fraud and money laundering. The beleaguered currency, which has depreciated more than 40% against the dollar so far this year, also bearing the burden of Western sanctions, rose around 3.9% to 55.93 to the dollar. Elsewhere, the euro was a touch higher against the dollar at $1.2176 despite strategists saying that uncertainty surrounding Greece--and perhaps even its future position in the eurozone--could send the common currency through $1.20 this week. Write to Josie Cox at and Tommy Stubbington at Credit: By Josie Cox and Tommy Stubbington
Subject: Stock exchanges; Prices; Money laundering; Eurozone
Location: Greece
People: Navalny, Alexei
Company / organization: Name: Bank of New York Mellon Corp; NAICS: 522110, 522292, 551111; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640798182
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640798182?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Oil Firms Pull Back On Rigs as Prices Fall
Author: Molinski, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Dec 2014: A.2.
Abstract:
Vertical rigs drill down thousands of feet to access traditional oil reservoirs, while horizontal drilling rigs are often used in combination with hydraulic fracturing, or fracking, to tap oil reserves trapped in shale rock formations.
Full text: U.S. oil producers appear to be scaling back amid low crude prices, with the onshore drilling-rig count falling by 37 last week, according to oil-field services company Baker Hughes Inc. It was the third consecutive week the drilling rig count fell and one of the biggest since crude-oil prices started to tumble in June. Analysts say energy companies operating in the U.S. will need slow their oil production to help bolster international crude prices. Rigs drilling for oil in the U.S. last week dropped by 37 to 1,499, Baker Hughes said Monday. This follows a 10-rig drop the previous week and a 29-rig decline the week before that. "We think it will fall every week for the next three months," analysts at Credit Suisse said of the U.S. rig count. "We expect the market to lose at least 200 vertical and 200 horizontal rigs and it could easily be more than that." Vertical rigs drill down thousands of feet to access traditional oil reservoirs, while horizontal drilling rigs are often used in combination with hydraulic fracturing, or fracking, to tap oil reserves trapped in shale rock formations. Taking oil rigs out of service means fewer wells will be drilled, but the energy industry more efficiently produces crude so more oil can be wrung from fewer wells. U.S. oil output during the week hit 9.14 million barrels a day earlier this month, marking the highest American production on record since the U.S. Energy Information Administration started tracking it in 1983. The EIA is projecting that U.S. oil production will continue to rise to 9.3 million barrels a day during 2015, despite depressed crude-oil prices. Credit: By Dan Molinski
Subject: Drilling; Petroleum production
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Classification: 1510: Energy resources; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2014
Publication date: Dec 30, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640803073
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640803073?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Drops to 5-Year Low --- Latest Declines All But Clinch Oil Markets As Commodities Worst Performer
Author: Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Dec 2014: C.4.
Abstract:
For investors who failed to bet on falling oil prices or who lost money wagering that prices would rise, "it's pretty hard to crawl out from underneath that," said Bill O'Grady, chief market strategist at Confluence Investment Management, which oversees $2.6 billion.
Full text: Oil prices hit fresh five-year lows on Monday on signs a global glut will keep growing. The latest losses come after a period where oil markets had shown signs of steadying. They all but clinch the petroleum sector's status as the worst-performer among commodities this year. Both the U.S. and global benchmarks lost more than 2% after Genscape Inc., an energy-data service, released figures showing another big build in U.S. oil supplies. The data allowed traders to shrug off worsening violence in oil-rich Libya that had sent futures higher early in the session. Light, sweet crude for February delivery, the U.S. benchmark, ended down 2.1% at $53.61 a barrel on The New York Mercantile Exchange. The February contract for Brent crude settled down $1.57, or 2.6%, to $57.88 a barrel on London's ICE Futures exchange. The closing prices were the lowest since May 2009, adding to a series of new lows that oil markets have set this year. Prices are falling because of a sharp rise in U.S. production that has crowded out imports, leaving the global market oversupplied. The Organization of the Petroleum Exporting Countries also opted to maintain its production quotas at its November meeting, sending the market into a tailspin. Oil's slump in recent months is due to "swelling supplies, and more of it coming online," said John Kilduff, founding partner of Again Capital in New York, which invests in energy. "It's going to continue to grind lower until somebody blinks." Brent crude, the global benchmark, is down 48% year to date. Gasoline is the only commodity performing worse in 2014, just fractions of a percentage point worse than Brent. Nymex crude oil is down 46%, with heating oil down 40%. The four contracts are the worst performers among the 22 markets tracked in the Bloomberg Commodity Index, which many funds use to guide their investments. Energy's poor performance is a major reason the Bloomberg index is down roughly 15% this year, despite gains in markets such as cattle and coffee. Oil and petroleum products make up about 22% of the weighting in the index, the largest portion for any group of commodities. For investors who failed to bet on falling oil prices or who lost money wagering that prices would rise, "it's pretty hard to crawl out from underneath that," said Bill O'Grady, chief market strategist at Confluence Investment Management, which oversees $2.6 billion. Mr. O'Grady's funds bet that oil prices would rise until last month, and he now has no positions in crude oil. He expects prices to keep falling. Prices appeared to stabilize in the last two weeks, even rising early Monday after a fire destroyed 800,000 barrels of crude at an oil terminal in Libya. The fire raised questions about whether the country could maintain unexpectedly robust exports amid widening armed clashes. But with fires now partially extinguished, traders turned their attention back to world-wide oversupply. There is more oil likely coming from the Gulf of Mexico and from U.S. pipeline expansions, and a small, temporary disruption isn't enough to fundamentally change the market, traders said. On Monday, Genscape estimated a 2 million barrel addition to stockpiles at the storage hub in Cushing, Okla., where the Nymex contract is priced, for the week ended Dec. 26, traders said. The Genscape data is a widely watched precursor to the U.S. Energy Information Administration's own weekly update gathered from producers and storage operators, which is published every Wednesday. --- Benoit Faucon and Nicole Friedman contributed to this article.
Credit: By Timothy Puko
Subject: Crude oil; Commodity prices
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2014
Publication date: Dec 30, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640803078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640803078?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Up Slightly Ahead of Inventory Data; Some Analysts Expect EIA Report to Show Oil Supplies Fell Last Week
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed that crude stocks rose by 760,000 barrels, gasoline inventories increased by 1.7 million barrels and distillate stocks rose by 313,000 barrels, according to industry sources.
Full text: NEW YORK--Oil futures ticked higher Tuesday, rebounding slightly from multiyear lows on the belief that U.S. supplies fell last week. Oil prices have plunged in recent months on concerns that global supply growth is outpacing tepid demand, and that the market will continue to be oversupplied in 2015. The Organization of the Petroleum Exporting Countries last month , an indication that supplies could remain ample next year. A barrel of crude costs about half of what it did just six months ago, and oil prices are set to post their largest yearly losses since 2008, when prices plummeted from record highs during a global recession. Crude oil and petroleum products are on track to be the worst-performing commodities of the year. The U.S. Energy Information Administration is set to release storage data for the week ended Dec. 26 on Wednesday. Analysts expect the report to show that oil supplies fell last week, which could boost prices. Light, sweet crude for February delivery on Tuesday rose 51 cents, or 1%, to $54.12 a barrel on the New York Mercantile Exchange, up from as low as $52.70 a barrel in overnight trading. Brent, the global benchmark, settled up 2 cents at $57.90 a barrel on ICE Futures Europe. Analysts expect the EIA to report that oil supplies fell by 600,000 barrels last week, according to a Wall Street Journal survey. "We're going to see a draw in crude stocks because you see a little pickup in fuel demand in the holiday week," said Gene McGillian, senior analyst at Tradition Energy, referring to the Christmas holiday last week. Still, he said, "the drivers that have lopped off 50% of our value over the last six months are still the main features of the market." Gasoline supplies are expected to rise by 1.6 million barrels, while stocks of distillates, including heating oil and diesel, are expected to rise by 1.4 million barrels. "I think the intention here is to square up ahead of the report tomorrow, " said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "The market would respond positively to any kind of draw in the crude-oil [storage] number." The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed that crude stocks rose by 760,000 barrels, gasoline inventories increased by 1.7 million barrels and distillate stocks rose by 313,000 barrels, according to industry sources. Diesel futures for January delivery rose 1.97 cents, or 1.1%, to $1.8688 a gallon. Gasoline futures for January delivery settled up 0.09 cent, or 0.1%, at $1.4537 a gallon. Gasoline is the worst-performing commodity year-to-date of the 22 commodities tracked by the Bloomberg Commodity Index. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Stocks; Crude oil prices; Supplies
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640813600
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Persian Gulf Stocks Stumble as Oil Slide Deepens
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
The Gulf stock markets have rebounded sharply since mid-December from multi-month lows, after Saudi Arabia assured it would continue to spend locally, helping alleviate regionwide concerns that weaker oil prices would crimp the governments' ability to support the local economies.
Full text: DUBAI--Stock markets in the Persian Gulf fell sharply on Tuesday, giving up some recent gains, as oil prices plumbed fresh multiyear lows. Oil priceson oversupply concerns--the commodity has now lost half its value since June--sparking renewed caution in the Gulf region, which largely depends on oil exports for revenue that keeps its economies ticking. The Gulf stock markets have rebounded sharply since mid-December from multi-month lows, after Saudi Arabia assured it would continue to spend locally, helping alleviate regionwide concerns that weaker oil prices would crimp the governments' ability to support the local economies. The fall in oil prices this week is pushing investors to take some profits off the table before the year-end. And given the uncertain outlook for oil in the near term, many analysts expect the Gulf markets to remain volatile in the first quarter of 2015. "Markets from economies which are less dependent on oil prices...should outperform regional equity indexes next year," said a fund manager at The National Investor. Dubai stocks led the Gulf markets' decline on Tuesday. The benchmark DFM index fell 5.4% to 3725.79, after losing 1.2% on Monday. The market had added more than 31% in the previous seven sessions, rebounding from a 35% loss in value since mid-November. The Dubai recovery rally is facing resistance at the 4025 index level, noted NBAD Securities. An analyst at the Abu Dhabi-based brokerage said profit-taking could drag the market to the 3700-3630 support levels. The region's markets are still dominated by retail investors, of which a fairly large number tend to follow technical analyses to chart their trading plans. Neighbor Abu Dhabi's market closed 2.2% lower at 4444.03 on Tuesday and Doha's main stocks index was down 1.9% at 12,327.62. Saudi Arabia's stock market, the Middle East's biggest, was trading 3.5% lower at 8542.77 on Tuesday on profit-taking, after adding 21% in the past nine sessions. Its government late last week unveiled an expansionary budget for next year, in line with what the kingdom's finance minister had promised earlier in the month. Write to Nikhil Lohade at Credit: By Nikhil Lohade
Subject: Stock exchanges; Investments; Securities markets
Location: Saudi Arabia
Company / organization: Name: National Investor; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640832033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640832033?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Debt Investors Looking to Profit From Oil Collapse; Airlines, Construction Firms Among Companies That Could See Uptick in Sales
Author: Cherney, Mike
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract:
Christopher Heller, investment-grade sector head at Hartford Investment Management Co., which oversees about $110 billion in assets, has been considering bonds from retail companies. Since the start of October, bonds from highly rated retailers, including Wal-Mart Stores Inc. and Home Depot Inc., have returned 2.89%, according to Barclays data.
Full text: The collapse of oil prices is uncovering a well of opportunities for corporate-bond investors looking ahead after a year of healthy returns and record-high debt sales. Fund managers are betting on companies that stand to benefit from lower energy costs, such as airlines and construction firms, as well as retailers that could see an uptick in sales now that consumers are spending less cash at the pump. Some are even buying bonds from energy firms they believe are large enough to withstand the oil drop. Many investors in highly rated corporate debt are being more careful about the bonds they buy as 2015 approaches, uncertain the strong gains of previous years will be repeated, and focusing on those firms that will be positively impacted from lower oil costs. "A number of industries and sectors benefit from this," said Joseph Mayo, managing director and head of credit research at Conning, an asset manager that oversees $92 billion. "You can just start with whoever has the closest relationship with consumers." Bonds from investment-grade companies, meaning those rated triple-B-minus or above, have returned more than 7% this year, through Monday, including price changes and interest payments. Much of that performance is due to a rally in the U.S. Treasury market, to which corporate-bond prices are pegged. The bonds did well even as highly rated companies sold nearly $1.2 trillion in new bonds in the U.S., the most on record, according to Dealogic figures. Most analysts don't expect highly rated corporate bonds to do quite as well next year because the rally in Treasurys is expected to cool when the Federal Reserve raises short-term interest rates, potentially in the middle of 2015. But market watchers are still upbeat on corporate bonds, given that U.S. economic conditions remain favorable. The economy grew at a 5% rate in the third quarter, the fastest clip in more than decade. "Fundamentals remain strong overall, with corporate balance sheets that are often flush with cash," money managers at Neuberger Berman, which oversees roughly $247 billion in assets, said in a recent research note. "This suggests that default rates should remain well below their longer-term average." At Conning, Mr. Mayo says his firm is looking to buy bonds from airlines given that lower fuel costs should benefit those companies. He also said his firm has been buying bonds from certain energy companies, like ConocoPhillips, Halliburton Co. and others that have the "financial strength to navigate through an extended period of low oil prices." Oil prices began sliding in July, from more than $100 a barrel, to about $90 by October and below $60 in recent trading. The market has been battered by slowing economies in Europe and China, the emergence of the U.S. as a major oil provider and a decision by the Organization of the Petroleum Exporting Countries not to cut production. The declines all-but clinch the petroleum sector's status as the worst-performer among commodities this year. Christopher Heller, investment-grade sector head at Hartford Investment Management Co., which oversees about $110 billion in assets, has been considering bonds from retail companies. Since the start of October, bonds from highly rated retailers, including Wal-Mart Stores Inc. and Home Depot Inc., have returned 2.89%, according to Barclays data. That is better than a broad index of high-grade corporate bonds, which has returned 1.60% in the same period. Although debt from retailers has done well overall, Mr. Heller pointed out that bonds from some retailers have been lagging, even though the drop in oil prices should ultimately benefit them. A 2022 bond from Macy's Retail Holdings Inc., for example, traded in July with a yield of 0.62 percentage point more than comparable Treasurys, according to MarketAxess. More recently, however, the spread compared with Treasurys has widened, with some bonds trading to yield 1.00 percentage point more than Treasurys. Higher yields indicate lower prices, and a wider spread compared with Treasurys indicates the bond has underperformed the broader market. "A large part of the corporate market shouldn't be wider just because oil prices are lower," Mr. Heller said. He declined to say whether his firm was specifically buying bonds from Macy's. To be sure, the fall in oil prices could ultimately push some lower-rated energy firms into default, make investors more skittish about lending money to firms with shakier finances, and potentially slow economic growth in the long run. Since the start of October, bonds from high-yield energy companies have returned a negative 10.59%. A rebound in oil prices, though, would reduce the benefit of lower energy costs for airlines, retailers and others. Still, Dave Battilega, who helps oversee the $173 million Aquila Three Peaks High Income Fund, said his firm has added bonds recently from food-service company Aramark and building-services firm HD Supply Inc., while lightening up on its exposure to energy companies. "A big company like HD Supply that uses trucks to transport goods, lower oil prices probably help," Mr. Battilega said. Write to Mike Cherney at Credit: By Mike Cherney
Subject: Bond markets; Bond issues; Prices; Retail stores; Energy industry; Treasuries
Location: United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Macys Inc; NAICS: 445110, 452111; Name: Neuberger Berman; NAICS: 523120, 523930; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640873011
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/16408730 11?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil and Gas Regulatory Push Coming from Obama Administration; Methane Emissions, Fracking, Arctic Drilling, Rail Tanker Cars All Would Be Subject to New Rules
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract: None available.
Full text: The Obama administration is planning to release in the coming months a series of regulations on the oil and natural gas industry, a response to the nation's energy boom that also is aimed at burnishing President Barack Obama's environmental legacy in his final two years. The coming rules--at least nine in total--would include the first-ever federal standards addressing methane emissions, stricter controls on hydraulic fracturing, drilling requirements in the Arctic, new rules governing oil shipped by trains and tougher standards on offshore drilling technology. The repercussions for the industry could be higher operating costs and fewer incentives to drill on public lands. Mr. Obama and his environmental backers say new regulations are needed to address the impacts of the surge in oil and gas drilling and production. "The large number of imminent regulations may be a sign that the White House is greening up its oil-and-gas policy," said Kevin Book, managing director of Clearview Energy Partners, a nonpartisan energy research firm that tracks federal regulations. "Fracking produced numerous regulatory responses at multiple levels, and a lot of the federal rules have been pending for a long time." In its first six years, the administration released very few regulations directly affecting the oil-and-gas industry and instead rolled out several significant rules aimed at cutting air pollution from the coal and electric-utility sectors. Some of the coming rules have been in the works for months or even years, and others are required by current laws or court decisions. The U.S. is now the world's largest natural-gas producer and is on track to become the biggest oil producer in 2015. Since 2008, U.S. oil production has surged 74% to 8.8 million barrels a day, while natural-gas production climbed 22% to 2.7 trillion cubic feet in September, according to the U.S. Energy Information Administration. Oil and gas production on public lands has declined 16% and 24%, respectively, between 2010 and 2013, according to EIA data. Several states have enacted regulations in response to the nation's increased production, but the federal government hasn't. "I think it is fair to say that given the changes in technology and the significant changes that we've seen in terms of domestic oil-and-gas production, there is a need to keep that regulatory process up-to-date," said Heather Zichal, an energy consultant who was a top energy and climate adviser in the White House until October 2013. The White House and energy companies have clashed over proposed fossil-fuel regulations, particularly a rule proposed last spring by the Environmental Protection Agency aimed at cutting carbon emissions from the nation's power plants. The coming oil-and-gas regulations are likely to intensify that tension. White House counselor John Podesta said the administration's plans are part of a continuing effort to move to cleaner sources of power while creating jobs and preserving energy security. "Across the federal government, we've taken steps to develop our oil-and-gas resources safely and responsibly, including by partnering with industry and working with states," he said via email. One of the most-watched actions is what the EPA does about methane emissions from oil and natural gas drilling operations. The agency is expected to announce in January whether it will expand an existing regulation to further regulate methane indirectly, which is the industry's preferred option, or begin regulating methane emissions directly, a broader regulatory approach environmental groups are pushing. Industry executives cite the monthslong drop in oil prices as an argument against the methane regulations. Greg Guidry, an executive vice president at Shell, said at an event in Washington recently that he doesn't want EPA to "impose unnecessary costs and burdens on an industry challenged now by a sustained low-price environment." The Interior Department, which has jurisdiction over public lands, also is planning to propose a rule in April that would set a standard for how much methane companies can either vent into the atmosphere or flare off when drilling for oil and natural gas, whose main component is methane. Janet McCabe, the acting assistant administrator for air at EPA, said recently that cutting methane emissions is an important part of the climate agenda Mr. Obama unveiled in June 2013 and that the administration is working to avoid any duplicative regulatory efforts. "We work closely with our partners at the Interior Department to make sure we're not walking into situations...where we have inconsistent expectations, duplicative expectations," said Ms. McCabe, noting that the regulations are being prompted by "an increasing awareness and concern of the role that methane emissions are playing in global climate concerns." The Transportation Department is expected to issue a final rule by March requiring tougher standards on oil shipped by rail, including phasing out older railcars within two years. Thanks to the boom in oil production and lack of pipeline infrastructure, oil shipped by rail has risen from almost nothing in 2005 to more than 400,000 tank cars of crude oil in 2013, according to the Association of American Railroads. Through the first half of this year, shipments rose an additional 11.7%. The rule, which the department proposed in draft form earlier this year, followed a series of fiery oil-train accidents that began in July 2013 with a derailment and explosion in Lac-Mégantic, Quebec, which killed 47 people. Both the oil and rail industries say they would need more than two years to comply with the rule. Jack Gerard, president and CEO of the American Petroleum Institute, whose organization is among those calling for more time to comply with the pending rail rule, said the upshot of several of these rules is that Mr. Obama is following through on his pledge to act alone without Congress, a move he opposes. "There's this attitude that if the people and the democratically elected institutions don't agree, we're going to go it alone," Mr. Gerard said in an interview. "I think that attitude is permeating some of the regulatory bodies." Corrections & Amplifications On federal lands between 2010 and 2013, oil production decreased 16% and gas production fell 24%. An earlier version of this article incorrectly said the changes had taken place since 2008. (Jan. 1, 2015) Write to Amy Harder at Credit: By Amy Harder
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640915431
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640915431?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Falling Oil, Commodities Prices Raise Headaches for Developing Nations; African, Latin American Countries Grapple With Threats to Growth
Author: Lyons, John; McGroarty, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Dec 2014: n/a.
Abstract: None available.
Full text: The drops last year in the prices of oil and other commodities are threatening to stunt growth in poor African and Latin American nations that sought to use vast natural-resource wealth to climb the development ladder. During a decadelong boom, governments on those continents vowed to use a windfall from surging raw-material prices to lift the vast underclass. Governments that sought big development leaps by funding social-welfare programs and ambitious infrastructure initiatives, such as building roads, ports and power plants, may now have less money to do so. "The good-governance records in many [Latin American] countries were linked to commodity prices, and this will be tested by the end of the commodity boom," said Jorge Castaneda, Mexico's former foreign minister. The commodity-rich nations of Africa and Latin America are also facing a slowdown in China, a key buyer of exports from South Africa, Nigeria, Brazil, Chile and others. The two regions have been hit by a global selloff of emerging-market stocks, bonds and currencies. The stakes are high for these often-volatile economies, which have some of the world's widest rich-poor gaps. Economic slowdowns and declining investment flows threaten to stretch budgets. In Latin America, credit-ratings firm Fitch expects to downgrade more countries than it upgrades in 2015. In some cases, the declines could expose levels of corruption and mismanagement that weren't detected during the good times. In resource-rich Brazil, millions of families escaped extreme poverty and joined a growing working class. Now, the country's growth has stagnated, investment is declining and currency declines are raising inflation fears. Allegations of widespread corruption at the state oil firm Petroleo Brasileiro SA are adding to the pain. Brazilian officials had placed the oil firm at the center of a far-reaching plan to overhaul the economy and lift millions of poor into better paying jobs. Shares of Petrobras have fallen to multiyear lows. The situation is worse in Venezuela, where President Nicolás Maduro is seeking to use oil wealth to fuel a Socialist revolution. With oil prices plunging, investors are gauging the risk that Venezuela may fail to pay its debt. Default would add to the woes of an economy saddled with double-digit inflation and shortages of basic items. Even countries with more moderate policy mixes, such as Chile, among the biggest copper exporters, are getting hit. Chile cut its 2015 growth outlook by half a percentage point to 2.5% in December. In Africa, the impact is magnified by the dependence of some fast-growing economies, such as Zambia, on the export of a single commodity. If the price of that commodity falls--in Zambia's case, copper--the fallout can be far-reaching. Countries that didn't balance budgets or curtail corruption while times were good will face painful choices, said Jack Allen of Capital Economics in London. Capital Economics forecasts average growth in sub-Saharan Africa to fall by one percentage point in 2015, to 4%, the slowest pace in more than a decade. In South Africa, where raw materials account for some 60% of exports, the rand currency hit a six-year low in December as South Africa's gold and iron-ore exports declined in value. One possible silver lining: Falling oil prices could lower South Africa's big import bill for much of the diesel and gasoline it consumes. But falling oil prices are likely to hit producers such as Nigeria and Ghana. Nigeria, the region's biggest economy, is likely headed for its first deficit in more than 15 years. That could add volatility to a country facing a contentious national election (scheduled for February), and wrestling with the violent Islamist group Boko Haram. "Governments won't have any choice but to take diversifying their tax base a bit more seriously now," Mr. Allen said. Write to John Lyons at and Patrick McGroarty at Credit: John Lyons, Patrick McGroarty
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 30, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640995288
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640995288?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Harold Hamm Fights Divorce Settlement; Oil Billionaire Contends Paying Nearly $1 Billion Is Too Much
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract: None available.
Full text: Oil billionaire Harold Hamm is contesting his November divorce settlement, saying an Oklahoma judge's order to pay his ex-wife nearly $1 billion is too rich. Mr. Hamm, chairman and chief executive of Continental Resources Inc., appealed the settlement earlier this month, calling it "erroneous." Six weeks ago when the judge's decree came down, Mr. Hamm described the settlement as "fair." The former Mrs. Hamm, Sue Ann Arnall, also has appealed the divorce settlement, saying it shortchanges her 26-year marriage to Mr. Hamm, whose wealth is tied up in the oil company that helped pioneer oil production in North Dakota. Ms. Arnall, a former lawyer with Oklahoma City-based Continental, married Mr. Hamm in 1988. She had been seeking a settlement of several billion dollars, and said that Mr. Hamm's leadership and decision-making during the marriage resulted in Continental's soaring stock market value. An Oklahoma District Court judge ordered Mr. Hamm to pay his ex-wife $995.5 million and awarded her two homes, a ranch, and other assets worth another several million dollars. Lawyers for Mr. Hamm and Ms. Arnall couldn't immediately be reached for comment. The couple's divorce has dragged on for over 2½ years. Ms. Arnall asked the company to produce over 600,000 pages of documents as proof of Mr. Hamm's business prowess. The company, one of the most prolific oil pumpers in the U.S., made its debut on the stock market in 2007 at a split-adjusted $7.05 a share. The company was worth over $54 a share in November when the judge issued his ruling. But crude-oil prices in the U.S. have dropped 30% in recent weeks since the divorce settlement, and Continental's market value has fallen by about a third over that period. Mr. Hamm argued in his appeal, filed 10 days after Ms. Arnall's appeal, that the recent and plunge in oil prices shows just how much the company's success is tied to market forces beyond his control. "The dramatic drop in oil price post-trial and the corresponding drop in the CLR stock price demonstrate the overriding impact of the oil price on the value of the stock," the appeal says. Write to Erin Ailworth at Credit: By Erin Ailworth
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640918993
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640918993?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Indonesia Scraps Gasoline Subsidies; Diesel Subsidies to Continue; Gasoline Prices to Be Lowered Amid Drop in Global Oil Prices
Author: Sentana, I Made
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
State-owned oil and gas company PT Pertamina is the sole seller of gasoline and diesel fuel in Indonesia and will decide on a monthly basis whether to make any changes to the fuel prices, Mr. Said added.
Full text: JAKARTA, Indonesia--Indonesia will scrap gasoline price subsidies starting Thursday as part ofpush to free up more funding for infrastructure spending to help boost the economy. At the same time, the price of gasoline will be cut to 7,600 rupiah, or about 61 U.S. cents, a liter from 8,500 rupiah a liter to reflect falling global oil prices, said Energy and Mineral Resources Minister Sudirman Said on Wednesday. State-owned oil and gas company PT Pertamina is the sole seller of gasoline and diesel fuel in Indonesia and will decide on a monthly basis whether to make any changes to the fuel prices, Mr. Said added. The government will continue to, but will fix the amount of the subsidy at 1,000 rupiah a liter for 2015, according to Mr. Said. The subsidized price of diesel will be cut to 7,250 rupiah from 7,500 rupiah a liter, he said. Economists said the policy changes would allow the government to spend more money on infrastructure projects that could spur growth in the coming years. "This is a bold positive step taken by the government," said Destry Damayanti, chief economist of Mandiri Institute, an independent economic think tank under the nation's largest lender PT Bank Mandiri. Ms. Damayanti said gasoline accounts for nearly 80% of government fuel subsidies so the savings from scrapping the subsidy should be significant. Coordinating Minister for the Economy Sofyan Jalil said Wednesday that because of the elimination of the gasoline subsidy,would total 17 trillion rupiah next year compared with the 166 trillion rupiah forecast in November when President Joko Widodo raised subsidized fuel prices by roughly one-third. Subsidies make fuel prices in Indonesia some of the cheapest in the region, but the costs have soared in recent years amid fast growth and rising consumption in Southeast Asia's largest economy. Little money has been left over in the state's discretionary budget for the new ports and roads that the country needs to reduce bottlenecks and boost growth rates, economists say. Write to I Made Sentana at Credit: By I Made Sentana
Subject: Gasoline prices; Petroleum industry; Price increases
Location: Indonesia United States--US
People: Widodo, Joko
Company / organization: Name: PT Pertamina; NAICS: 211111, 213111; Name: PT Bank Mandiri; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640940447
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Higher in Shortened Trading; Oil Prices Continue Their Recent Tumble Following Chinese Data
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
Many strategists say this move could be accentuated in 2015, as the U.S. Federal Reserve moves closer to hiking interest rates, while the European Central Bank is broadly tipped to introduce more stimulative and broad-based measures to spur recovery.
Full text: European stocks climbed on the final trading day of 2014, closing out a year of modest gains for equity markets in the region. The Stoxx Europe 600 index, on , ended a shortened session 0.4% higher, taking its gains this year to 4.3%. This comes amid a continuing rout in oil prices, which extended their recent tumble following downbeat . Brent crude fell more than 3% to $56.07 a barrel. London's FTSE 100, which is packed full of oil and gas dependent stocks, brushed off Brent's relentless slide and climbed 0.3% Wednesday, but has lost 2.7% during the year. France's CAC 40 rose 0.6% to end the year down 0.5% Germany's DAX 30 closed for the year on Tuesday, having risen 2.7% in 2014 and more than 14% from its 52-week low hit in October. Earlier on Wednesday, China's final reading of the HSBC Manufacturing Purchasing Managers' Index came in at 49.6 in December, down from 50 in November. China is the world's second-largest consumer of oil and its manufacturing sector accounts for a big chunk of its fuel consumption, meaning that the poor data exacerbates fears of global oversupply. In currency markets, the euro was broadly steady against the dollar, at $1.2149, taking its losses against the buck this year to over 11%. Many strategists say this move could be accentuated in 2015, as the U.S. Federal Reserve moves closer to hiking interest rates, while the European Central Bank is broadly tipped to introduce more stimulative and broad-based measures to spur recovery. The Canadian dollar and the Norwegian krone, both currencies that tend to be swayed by the price of oil, were resilient Wednesday, but the Russian ruble--also an oil currency--continued to weaken. The dollar was around 8% stronger against the ruble at 60.07. Pressured both by the oil shock and western sanctions imposed on Russia earlier this year, the ruble has depreciated by 43% against the dollar in 2014, and by more than 15% in December alone. Write to Josie Cox at Credit: By Josie Cox
Subject: Petroleum industry; American dollar; Currency
Location: China France Germany
Company / organization: Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640977638
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640977638?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Prices Fall 46% This Year, Steepest Loss Since 2008; Gasoline Futures Are Down 48% for the Year
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
Brent crude oil and gasoline futures both posted 48% losses in 2014, making them the worst performers among the 22 commodity markets tracked by the Bloomberg Commodity Index.
Full text: NEW YORK--Oil futures closed the year at more-than five-year lows, as plentiful supplies and tepid demand continued to send prices plunging. Brent crude oil and gasoline futures both posted 48% losses in 2014, making them the worst performers among the 22 commodity markets tracked by the Bloomberg Commodity Index. U.S. oil futures dropped 46% in the year. Oil, gasoline and diesel markets all posted their largest annual losses since the global recession in 2008. Wednesday's price drop marked a "poetic end to...what ended up being a difficult year for the oil and gas industry," said Adam Wise, managing director at John Hancock Financial Services, who helps oversee about $7 billion in energy-related investments. Weak Chinese economic data weighed on the market Wednesday, along with U.S. inventory data showing that supplies in a key storage hub rose last week. Brent crude futures settled down 57 cents, or 1%, at $57.33 a barrel on London's ICE Futures exchange, the lowest level since May 15, 2009. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February fell 85 cents, or 1.6%, to $53.27 a barrel, the lowest settlement since May 1, 2009. U.S. oil supplies fell by more than expected last week as refiners bought more crude, the U.S. Energy Information Administration said Wednesday. Prices pared some losses on the news, but then quickly reversed the gains. Crude stockpiles in Cushing, Okla., the delivery point for the Nymex contract, rose by 2 million barrels to a 10-month high. Low supplies in Cushing earlier in the year were a key factor pushing Nymex oil prices above $100 a barrel. New pipelines have opened in recent months to bring oil from the Rocky Mountain region, North Dakota and Canada to storage facilities in Cushing, said Andy Lipow, president of Lipow Oil Associates in Houston. "We've steadily rebuilt those inventories" at Cushing, said Donald Morton, senior vice president at Herbert J. Sims & Co. "It's just very bearish out there right now...I don't see anybody wanting to pick a bottom just yet." The storage data also showed that supplies of petroleum products rose more than expected. Gasoline supplies rose by 3 million barrels, more than the expected 1.6-million-barrel gain. Distillate stocks, including heating oil and diesel, climbed by 1.9 million barrels, more than the expected 1.4 million barrels. Production of both gasoline and distillate fuel oil hit all-time highs, according to weekly EIA data going back to August 1982. "It's apparent that refiners are turning the crude-oil surplus into a petroleum-product surplus," Mr. Lipow said. On Wednesday, , with the final reading of the HSBC Manufacturing Purchasing Managers' Index at 49.6 in December, down from 50 in November. A sub-50 figure indicates contraction. China is the world's second-largest consumer of oil and its manufacturing sector accounts for a big chunk of its fuel consumption. "It's difficult to see what will turn the market," said David Wech at JBC Energy. "Most news coming in is relatively bearish and an upside to prices looks unlikely anytime soon." Speculators cut their aggregate bet that Nymex oil prices would rise in the week ended Dec. 23, the first reduction in four weeks, according to data from the U.S. Commodity Futures Trading Commission. Increased demand and reduced production due to lower prices will eventually balance the market, Mr. Wech said. "But the balancing will take time, perhaps not before the middle of the second quarter of 2015," he said. "The market will get worse before it gets better." Gasoline futures for January delivery fell 1.84 cents, or 1.3%, to $1.4353 a gallon, the lowest settlement since April 2009. The January contract expired at settlement Wednesday. The more-actively traded February contract settled up 0.1 cent, or 0.1%, at $1.4721 a gallon. Diesel futures for January delivery fell 2.22 cents, or 0.2%, to $1.8466 a gallon, the lowest level since October 2009. Diesel futures posted a 40% loss this year. The February contract fell 0.8 cent, or 0.4%, to $1.8336 a gallon. Georgi Kantchev and Eric Yep contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil; Manufacturing; Crude oil prices
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640982523
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1640982523?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Drop a Boon for Bond Investors --- Airlines, Retailers and Construction Firms Among Companies That Could See Uptick in Debt Sales
Author: Cherney, Mike
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Dec 2014: C.1.
Abstract:
Christopher Heller, investment-grade sector head at Hartford Investment Management Co., which oversees about $110 billion in assets, has been considering bonds from retail companies. Since the start of October, bonds from highly rated retailers, including Wal-Mart Stores Inc. and Home Depot Inc., have returned 2.89%, according to Barclays data.
Full text: The collapse of oil prices is uncovering a well of opportunities for corporate-bond investors looking ahead after a year of healthy returns and record-high debt sales. Fund managers are betting on companies that stand to benefit from lower energy costs, such as airlines and construction firms, as well as retailers that could see an uptick in sales now that consumers are spending less cash at the pump. Some are even buying bonds from energy firms they believe are large enough to withstand the oil drop. Many investors in highly rated corporate debt are being more careful about the bonds they buy as 2015 approaches, uncertain the strong gains of previous years will be repeated, and focusing on those firms that will be positively affected by lower oil costs. "A number of industries and sectors benefit from this," said Joseph Mayo, managing director and head of credit research at Conning, an asset manager that oversees $92 billion. "You can just start with whoever has the closest relationship with consumers." Bonds from investment-grade companies, meaning those rated triple-B-minus or above, have returned more than 7% this year, through Monday, including price changes and interest payments. Much of that performance is due to a rally in the U.S. Treasury market, to which corporate-bond prices are pegged. The bonds did well even as highly rated companies sold nearly $1.2 trillion in new bonds in the U.S., the most on record, according to Dealogic figures. Most analysts don't expect highly rated corporate bonds to do quite as well next year because the rally in Treasurys is expected to cool when the Federal Reserve raises short-term interest rates, potentially in the middle of 2015. But market watchers still are upbeat on corporate bonds, since U.S. economic conditions remain favorable. The economy grew at a 5% rate in the third quarter, the fastest clip in more than decade. "Fundamentals remain strong overall, with corporate balance sheets that are often flush with cash," money managers at Neuberger Berman, which oversees roughly $247 billion in assets, said in a recent research note. "This suggests that default rates should remain well below their longer-term average." At Conning, Mr. Mayo says his firm is looking to buy bonds from airlines since lower fuel costs should benefit those companies. He also said his firm has been buying bonds from certain energy companies, like ConocoPhillips, Halliburton Co. and others that have the "financial strength to navigate through an extended period of low oil prices." Oil prices began sliding in July, from more than $100 a barrel, to about $90 by October and below $60 in recent trading. The market has been battered by slowing economies in Europe and China, the emergence of the U.S. as a major oil provider and a decision by the Organization of the Petroleum Exporting Countries not to cut production. Christopher Heller, investment-grade sector head at Hartford Investment Management Co., which oversees about $110 billion in assets, has been considering bonds from retail companies. Since the start of October, bonds from highly rated retailers, including Wal-Mart Stores Inc. and Home Depot Inc., have returned 2.89%, according to Barclays data. That is better than a broad index of high-grade corporate bonds, which has returned 1.60% in the same period. Although debt from retailers has done well overall, Mr. Heller pointed out that bonds from some have been flagging. A 2022 bond from Macy's Retail Holdings Inc., for example, traded in July with a yield of 0.62 percentage point more than comparable Treasurys, according to MarketAxess. More recently, the spread compared with Treasurys has widened, with some bonds trading to yield 1.00 percentage point more than Treasurys. Higher yields indicate lower prices, and a wider spread compared with Treasurys indicates the bond has underperformed the broader market. "A large part of the corporate market shouldn't be wider just because oil prices are lower," Mr. Heller said. To be sure, the fall in oil prices could ultimately push some lower-rated energy firms into default, make investors more skittish about lending money to firms with shakier finances, and potentially slow economic growth in the long run. Since the start of October, bonds from high-yield energy companies have returned a negative 10.59%. A rebound in oil prices, though, would reduce the benefit of lower energy costs for airlines, retailers and others. Still, Dave Battilega, who helps oversee the $173 million Aquila Three Peaks High Income Fund, said his firm has added bonds recently from food-service company Aramark and building-services firm HD Supply Inc., while lightening up on its exposure to energy companies. "A big company like HD Supply that uses trucks to transport goods, lower oil prices probably help," Mr. Battilega said. Credit: By Mike Cherney
Subject: Corporate debt; Bond markets; Crude oil prices
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance; 1510: Energy resources
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2014
Publication date: Dec 31, 2014
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1640982914
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
American Eagle Energy Halts Drilling Plans; Company Cites Oversupply of Crude Oil for Suspension of Drilling Operations
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
Energy giants ConocoPhillips and BP PLC, along with a number of smaller companies like Husky Energy Inc. and Penn West Petroleum Ltd., have also said they would pare capital spending plans, while EOG Resources Inc. has said it would shed many of its Canadian oil and gas fields to refocus on the U.S. Denver-based American Eagle, a small producer focused on the Bakken and Three Forks shale-oil formations, said Wednesday that it has suspended its operated drilling budget for next year.
Full text: American Eagle Energy Corp. said Wednesday that it has suspended its drilling operations and likely won't resume until oil prices improve, the latest sign that a glut in crude oil is stifling exploration and production across the industry. Shares dropped 9.1% to 60 cents in light premarket trading. The stock is one of the hardest hit in the energy sector this year and approached $12 a share in November 2013. Oil prices have plummeted in the second half of 2014 as a flood of crude from U.S. shale disrupted the global oil market, leading a host of energy companies to cut drilling, lay off workers and slash spending. Earlier this month, Chevron Corp. told Canadian regulators that to drill for oil in Arctic waters. Energy giants ConocoPhillips and BP PLC, along with a number of smaller companies like Husky Energy Inc. and Penn West Petroleum Ltd., have also said they would pare capital spending plans, while EOG Resources Inc. has said it would shed many of its Canadian oil and gas fields to refocus on the U.S. Denver-based American Eagle, a small producer focused on the Bakken and Three Forks shale-oil formations, said Wednesday that it has suspended its operated drilling budget for next year. The company said it would complete two wells it drilled in the current quarter in next year's first quarter, which it expects to cost about $4.5 million. For the quarter ending Wednesday, the company also cut its production outlook to 2,600 to 2,700 barrels of oil equivalent a day, down from 2,700 to 3,000 barrels. Chevron, in comparison, produced about 2.57 million barrels of net oil equivalent a day globally in its last quarter. Overall, analysts polled by Thomson Reuters are expecting American Eagle's loss to widen to 7 cents a share from a loss of a penny a share a year earlier, while revenue is expected to grow 38% to $18.6 million in the quarter. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Petroleum industry; Capital expenditures; Statistical data; Energy industry
Location: Arctic region United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Penn West Petroleum Ltd; NAICS: 211111; Name: Husky Energy Inc; NAICS: 213111; Name: Chevron Corp; NAICS: 324110, 211111; Name: BP PLC; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641008801
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641008801?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-25
Database: The Wall Street Journal
Private Sector May Provide Jolt to Stagnant Mexico Oil Industry; 2014 Caps a Decade of Reduced Government Crude Production
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's crude oil production fell in 2014 for a 10th consecutive year, underscoring the government's haste to implement changes in energy laws that allow the private sector to explore for and produce oil for the first time in more than seven decades. State oil company Petróleos Mexicanos produced 2.353 million barrels a day of crude oil in December, according to preliminary data published late Tuesday, bringing average output for 2014 to 2.429 million barrels a day, compared with 2.522 million in 2013. Despite investing record amounts in recent years in exploration and production, including some $22.4 billion in 2014, Pemex's output has been steadily declining from a peak of 3.4 million barrels a day in 2004 as giant fields have declined and the company tackles more complex reserves. The Finance Ministry estimates that this year's reduction in crude output will shave 0.4 percentage point off 2014 economic growth, which private economists forecast will be around 2.2%. To address the long-term decline in oil production, the government of President Enrique Peña Nieto in 2013 secured congressional support for constitutional changes to allow private and foreign oil companies back into the industry for the first time since the 1938 expropriation. In an ambitious first bidding round, the government will offer a mix of profit-sharing and production-sharing contracts, as well as licenses, in areas including mature oil fields, deep water projects and nonconventional reserves such as those found in shale rock formations. The first set of bids, expected in mid-2015, will be for production-sharing agreements in 14 shallow water blocks in the Gulf of Mexico, located near Mexico's most productive offshore fields. "Mexico decided to start with what could be the easier stuff," said Miriam Grunstein, an expert with Rice University's Mexico Center, in a recent online panel discussion. "A production sharing agreement involving cost recovery and shallow water seems to be the easier target for Mexico to address at this point." While a number of private companies expressed interest in the production-sharing contracts, they're more keen on the deep water contracts and the idea of production licenses that are expected to be offered later in the year, said Duncan Wood, director of the Mexico Institute at the Woodrow Wilson Center. "There was also the sense that this reflected the need on the part of the government to begin to bring in revenue sooner rather than later," he said. The recent slump in oil prices-Mexican crude sold at $46.27 a barrel Tuesday, down from nearly $99 in June--is seen as a possible obstacle to investment in the near term. "The standard response is 'look, we're a long-term business, and so we make our investment decisions not based upon the oil price today but where we think it's going to average out over 25 years,' but in terms of having disposable cash or capital to invest, that's one factor that does play into it." Mr. Wood said. On the other hand, the lower prices will keep the Mexican government from adjusting the terms of the contracts to make them more demanding, he added. The government expects the energy opening to help raise oil output to 2.9 million barrels a day by 2018, and 3.5 million by 2025. Pemex, which was assigned 83% of the country's proven and probable reserves ahead of any bidding, is expected to remain the biggest producer. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641050570
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641050570?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Restructuring Professionals Have Some Hope Despite Expected Slow 2015; Drivers for Their Industry, Like Falling Oil Prices and Potentially Higher Interest Rates, Strengthening
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
[...]restructuring professionals don't expect the likely gradual rate increases dramatically to affect borrowers immediately.
Full text: As bankruptcy and restructuring professionals gear up for another slow year, some drivers for the industry, such as low oil prices and potentially higher interest rates, are strengthening. Still, those drivers aren't expected to result in a broad shakeout across corporate America, as credit markets still remain friendly to many borrowers, keeping corporate defaults and Chapter 11 filings low. "We would expect there to be a bit more activity in 2015," said Ford Phillips, a KPMG Corporate Finance managing director. "We're still experiencing the effects of what's been an incredibly strong credit cycle. I wouldn't believe there'd be a significant spike in defaults this year, but there probably will be some." One of the factors helping companies avoid default is a robust high-yield debt market, according to Dan Dooley, chief executive of MorrisAnderson. For several years now, companies without investment-grade credit ratings have thus been able to access the financing they need to push off debt maturities. Standard & Poor's Ratings Services, for instance, expects the U.S. corporate 12-month speculative-grade default rate to rise to 2.4% by Sept. 30, 2015, a relatively modest increase from the 1.6% rate measured in September 2014 and 2.2% in December 2013. Meanwhile, Fitch Ratings expects the U.S. high-yield default rate to fall to between 1.5% and 2%. Fitch says less than $28 billion of high-yield debt is expected to come due next year, of which just $2.5 billion is considered to be at highest risk of default. A significant rise in interest rates, however, could spur more defaults. While the Federal Reserve indicated in mid-December that after six years of keeping rates near zero, it would explore raising rates, it also said it would be patient in doing so. As a result, restructuring professionals don't expect the likely gradual rate increases dramatically to affect borrowers immediately. One recent development that could increase distress at some companies has been a sudden and sharp drop in oil prices. As of Wednesday, crude-oil prices had fallen below $54 per barrel, their lowest since 2009. "That's going to be a mess in the next year" for oil and gas drillers, producers and distributors as well as for companies that serve that industry, Mr. Dooley predicted. On the other hand, he said, "it's going to help a lot of other businesses" that purchase oil, like transportation companies. Another industry expected to experience distress in 2015 is retail, which, despite the economic recovery, hasn't seen shoppers return in droves because of limited wage growth and disposable income. Teen apparel retailers Delia's and Deb Shops recently sought Chapter 11 protection, and others are expected to follow. "I expect there to be less retailers in a year from now than there are today, especially on the specialty apparel side," said Perry Mandarino, who leads Pricewaterhouse Coopers' restructuring practice. "I don't think the ones that have already filed will be the last of this season." Also in 2015, health-care providers will continue to grapple with low reimbursement rates from government insurers, according to McDermott Will & Emery partner Bill Smith. Providers are also being expected to do more with less, as they are required by the Affordable Care Act to invest in transferring paper record-keeping and billing functions to electronic systems. Overall, Chapter 11 filings, on the wane since 2009, are expected to remain low not only due to broader economic factors but also due to the expense of the proceedings. But Chapter 11 will continue appeal to companies that have already struck a restructuring deal with creditors or are seeking to sell themselves, both of which can be accomplished relatively quickly and predictably under the court's purview. "To the extent we have Chapter 11 filings, and we certainly will, I think they will be companies that want highly structured solutions," said Sidley Austin partner Jessica Boelter. Stephanie Gleason contributed to this article Write to Jacqueline Palank at Credit: By Jacqueline Palank
Subject: High yield investments; Junk bonds; Trends; Interest rates; Energy economics; Debt restructuring
Location: United States--US
Company / organization: Name: MorrisAnderson; NAICS: 541611; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: News
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641096016
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641096016?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico's Stocks End Volatile Year With Small Gain; Falling Oil Prices, Prospect of Higher U.S. Interest Rates Soured Sentiment
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican stocks rose Wednesday in a shortened final trading session of a year that saw the benchmark index touch new highs, only to fade as falling oil prices and the prospect of higher U.S. interest rates soured emerging market sentiment. The IPC index of leading issues rose 0.3% to 43,146 points, up 1% from the end of 2013, but down about 10% in U.S. dollar terms as the peso, pummeled by concerns about U.S. monetary tightening and the slump in world oil prices. The IPC index reached an all-time intraday high of 46,554 points in early September, helped by a rally in shares of bellwether América Móvil after the telecommunications company controlled by billionaire Carlos Slim said it would sell assets to lower its market share and thereby avoid the stiff regulations imposed under new telecom laws. América Móvil L shares closed at 16.40 pesos ($1.11), up 7.8% from a year earlier. Broadcast and media company Televisa, which is seen benefiting more from new telecommunications rules than it will suffer from new broadcast regulations, was among the market's top gainers, with its shares closing the year up 28% at 100.59 pesos. Shares of Sempra Energy's local unit Ienova rose 41% in the year as the company profited from the government's push to build more pipelines to import increasing amounts of natural gas from the U.S. Ienova is the only pure energy company on the local market, and its prospects are seen as bright as the country opens the oil and electricity industries to greater private involvement. Retail stocks had a bad year, as tax increases in January and slowing consumer-credit growth contributed to sluggish consumption. Wal-Mart de Mexico V shares fell 7.4% from a year before to 31.72 pesos, and Grupo Sanborns shares lost 17% to 22.98 pesos. Tourism recovered, on the other hand, supporting gains for companies such as Asur, which runs the Cancún airport and whose shares closed up 19% on the year at 195.04 pesos. Airline Aeromexico shares rose 14% to 20.44 pesos. The number of international tourists visiting Mexico rose 21% in the first 10 months to 12.7 million, who spent $11.5 billion in the country, according to central-bank data. Following two record years, share issuance on the local exchange slowed to 85.7 billion pesos in 2014, including IPOs, capital increases, and real-estate investment trusts. Issuance of new shares was close to 160 billion pesos in 2013. The past year was also tricky for the Mexican peso, which weakened 11% against the U.S. dollar to 14.7480, compared with 13.09 at the end of 2013. The peso racked up most of its losses in the last months of the year as the U.S. Federal Reserve wound up its bond-buying program and moved closer to raising interest rates in 2015, and oil prices fell to five-year lows. Oil accounts for less than 10% of Mexico's exports, but for around a third of federal government revenue. as state oil company Pemex changes dollars at the central bank. The peso rout led the foreign-exchange commission in December to in which the Bank of Mexico sells as much as $200 million on days when the peso weakens 1.5% from the previous session. So far, the bank has only sold dollars once. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164110 7722
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Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
'A Most Violent Year' Review: The High Price of Oil; Under threat from all sides, a fuel dealer closes in on the object of his soaring ambition
Author: Morgenstern, Joe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Dec 2014: n/a.
Abstract:
[...]faced with a criminal investigation and under siege from his competitors--under what amounts to terrorist attacks on his trucks and drivers--he has only a few days to come up with a million and a half dollars to pull off his crucial purchase of a fuel-oil depot in Brooklyn.
Full text: The hero of J.C. Chandor's "A Most Violent Year," a heating-oil dealer played superbly by Oscar Isaac, thinks he's an honest man. "I spent my whole life trying not to become a gangster," Abel Morales says at a make-or-break moment in his life. He says this to his wife, Anna, who, as played with scuzzy verve by Jessica Chastain, has no illusions about her husband or what needs to be done. Mr. Chandor made an impressive debut with his 2011 film "Margin Call," which studied the ethics of significant players at an investment bank in 2008, during the 24 hours before the crash. His new film, set in New York in 1981, focuses its ethical concerns on Abel, who is nothing if not ambitious. The film is ambitious too, and hugely accomplished; at the same time it's self-serious, to a fault. Just as Abel walks a wavering line between probity and thievery, the drama wavers between authentic gravity and a deficit of energy. That said, Mr. Chandor gives Mr. Isaac everything he needs for a tour de force performance, and the actor makes the most of what he gets. Abel isn't a lovable figure, but he's a fascinating one, a man of limited insight who has fought his way to precarious affluence. Now, faced with a criminal investigation and under siege from his competitors--under what amounts to terrorist attacks on his trucks and drivers--he has only a few days to come up with a million and a half dollars to pull off his crucial purchase of a fuel-oil depot in Brooklyn. In conveying Abel's brooding attempts at self-scrutiny, Mr. Isaac recalls, without mimicry, the young Al Pacino. In revealing the anxiety and fear behind Abel's polished exterior, he's entirely original, a fine actor in the process of becoming a certified star. One of the story's main characters is New York at its grungy, graffiti-covered nadir, a city so dark in prospect and tone that the movie turns noir almost of its own accord. It's also the city that Sidney Lumet enshrined in such classics as "Serpico" and "Dog Day Afternoon." This film doesn't operate in that league, and doesn't pretend to; it's smaller in scale, and suffers from a silly ending. Still, "A Most Violent Year," which comes only one year after Mr. Chandor's sailboat saga "All Is Lost," is another worthy feature from a filmmaker with a seemingly unlimited future. If only he goes easy on solemnity in the next one. DVD // Streaming // Download 'Inside Llewyn Davis' (2013) Oscar Isaac is the wayward troubadour of the title, living out his own ballad of love and loss. The film, written and directed by Joel Coen and Ethan Coen, begins with Llewyn singing a three-minute song. The setting is the Gaslight Cafe in Greenwich Village in 1961, just before the folk-music scene was transformed by the arrival of Bob Dylan. Elegiac and stirring in equal measure, the song sets the dominant tone of what follows, even if some of the plot's twists and turns are very funny. 'Margin Call' (2011) There's a moment in J.C. Chandor's debut feature when a young risk analyst spots a piece of data on his computer screen and realizes that it's the financial equivalent of the asteroid headed for earth in "Armageddon." The time is 2008, and the setting is a Manhattan investment bank that bears a more than passing resemblance to Lehman Brothers. Mr. Chandor's debut feature is a shrewdly circumscribed chamber piece that's chilling and enjoyable in unequal measure. Entertainment predominates, but entertainment with a well-honed edge. Credit: By Joe Morgenstern
Subject: Motion pictures
Location: New York
People: Coen, Ethan Lumet, Sidney Chastain, Jessica Coen, Joel Pacino, Al Dylan, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2014
Publication date: Dec 31, 2014
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641116703
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641116703?accountid=7117
Copyright: (c) 2014 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oman Raises 2015 Spending Plan Despite Oil Slump; Decision Widens The Country's Projected Fiscal Deficit
Author: Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2015: n/a.
Abstract:
DUBAI--Oman defied a sharp decline in oil prices and raised spending in its 2015 government budget, according to official figures released Thursday, a decision that widened its projected fiscal deficit.
Full text: DUBAI--Oman defied a sharp decline in oil prices and raised spending in its 2015 government budget, according to official figures released Thursday, a decision that widened its projected fiscal deficit. Oman pegged government spending at 14.1 billion Omani rial ($36.62 billion) for 2015, up by about 4.5% compared with 2014, according to a statement carried by the official Oman News Agency. The sustained spending will allow Oman to press forward with major projects, including a $15 billion national railway network and major expansion projects at airports in Muscat and the southern city of Salalah. Yet the rise also puts Oman on track to run a growing deficit. As is the case in other countries in the energy-rich Persian Gulf, high oil prices have cushioned Oman's oil-dependent economy for the past three years. With prices falling by about half since June however, Oman and other . Last year, the International Monetary Fund estimated that Oman needed oil to trade at $99 a barrel to balance its budget. Oman projected revenues for 2015 at 11.6 billion rial, it said, a decrease of 1% on the 2014 figure. The difference between revenues and spending left a projected deficit of 2.5 billion rial, or about 8% of the country's gross domestic product. Saudi Arabia a week ago announced a projected $39 billion government budget deficit for 2015, signaling its intention, like Oman, to continue massive spending on projects despite the decline in oil prices. Write to Asa Fitch at Credit: By Asa Fitch
Subject: Petroleum industry; Budget deficits
Location: Oman Persian Gulf
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 1, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641193438
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Get Used to Cheap Oil
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2015: n/a.
Abstract:
Analysts say prices could fall further as wintertime heating-oil demand recedes in the second quarter, and U.S. drivers will reap the benefits in the form of cheap gasoline. While demand is liable to perk up as oil prices stay low, that won't happen right away, analysts say, especially with the global economic growth subdued.
Full text: Plunging oil prices in the second half of 2014 upended global economic forecasts, boosted consumer spending and roiled markets from Moscow to Midland, Texas. Now, analysts and investors--most of whom were caught off-guard when U.S. prices dropped from $107.26 a barrel in June to $53.27 a barrel Wednesday--are calling low prices the new normal. Investors and traders say a price recovery likely won't come until the second half of 2015, as U.S. oil output keeps rising and subdued global growth weighs on demand. It will take months for the global glut of oil to shrink, market participants say. Producers will be slow to cut back on drilling, and consumers won't change their buying habits right away. Analysts say prices could fall further as wintertime heating-oil demand recedes in the second quarter, and U.S. drivers will reap the benefits in the form of cheap gasoline. Bankers and investors are watching for a new wave of deal making in the energy industry, as weak and highly leveraged companies struggle to withstand low prices. "We have yet to restore balance to this market," said David Martin, head of global oil strategy at J.P. Morgan Chase & Co. "One can reasonably expect that there's further price downside in the short term." J.P. Morgan expects oil prices to bottom in the first quarter. For the year, the bank sees global benchmark Brent crude averaging $82 a barrel and U.S. prices averaging $77.25 a barrel. This past year was expected by many to bring stable, triple-digit oil prices. Chevron Corp.'s chief executive declared in March that "the $100 barrel is the new $20," and traders complained that several years of low volatility had made it difficult to make money buying and selling oil. Now, analysts and investors say the only certainty is volatility, as the global crude market adjusts to ample supplies and tepid global growth. U.S. production has soared to its highest level since 1986 due to new technologies enabling producers to access oil trapped in shale-rock formations. U.S. imports of crude have fallen from a peak of 10.8 million barrels a day in June 2005 to just 7.5 million barrels a day in September. That leaves exporters competing to sell the barrels that used to go to the U.S. to other markets, mainly in Asia. As an oil oversupply emerged this past summer, companies and analysts called for the Organization of the Petroleum Exporting Countries, a group of 12 oil-producing nations, to reduce its production to prevent prices from falling. At its November meeting, OPEC declined to do so, and prices sank in response. For years, oil has been seen as less volatile than other commodity markets because of the presence of OPEC. Investors are now questioning whether the group has lost its power. "OPEC basically just said, ''We can't do this collectively. We are no longer the dominant producer,'" said George Zivic, who manages the $384 million Oppenheimer Commodity Strategy Total Return Fund. "The previous 30-year regime in oil has changed." Others disagree, and some analysts expect OPEC to call an emergency meeting to respond to low prices before its next scheduled gathering in June. "I think it's very much too early to write off OPEC," said Ian Taylor, chief executive of oil trader Vitol, at the Platts Global Energy Outlook Forum in December. Without action from OPEC, individual companies or countries would need to produce less oil to cut back on the current oversupply, which is estimated by analysts to be as high as two million barrels a day. But companies will reduce investment in drilling new wells before they shut existing ones, meaning it could take months for supply growth to slow. And as drilling has become more efficient, many shale-oil producers can still make money churning out crude at current prices. On the demand side, low oil prices are expected to boost the struggling global economy. Consumers saving money on gas can spend more on other purchases. Drivers will especially benefit in the U.S., where low oil prices generally lead quickly to low gas prices, without currency fluctuations or fuel subsidies cutting into the reductions, as in some other countries. But after years of high gas prices, consumers have become more efficient, and so have their vehicles. While demand is liable to perk up as oil prices stay low, that won't happen right away, analysts say, especially with the global economic growth subdued. To be sure, a sudden change in supply due to a geopolitical event or OPEC decision could send prices higher. Barring that, most market watchers call for prices to recover somewhat in the second half of 2015 as supply and demand come into balance. But it could be years before traders buy and sell $100 barrels again, analysts say. Of $60-a-barrel oil, said Vitol's Mr. Taylor, "we might have to live here for a much longer period than perhaps, at the moment, we are expecting." Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Volatility; Crude oil prices; Economic forecasts
Location: Texas United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 1, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641251250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641251250?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
: What to Watch for on the Global Economy in 2015; From the Fed's Expected Move on Rates to the Direction of Oil Prices, Key Indicators on the Global Economy
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2015: n/a.
Abstract:
[...]the European Central Bank is considering purchasing government bonds to help Europe's economies--just as a new round of uncertainty has emerged around Greece's national elections in January, where a left-wing party challenging the ruling conservatives wants to push back on austerity measures.
Full text: Here are some key indicators to signal the health of the global economy in the new year. Janet Yellen's Big Move Federal Reserve Chairwoman Janet Yellen has been laying the groundwork to raise interest rates in the new year for the first time since 2006. Economists have focused on the Fed's June meeting as a possible starting point for rate increases. If she pulls it off, it would signal a long-awaited return to normal for U.S. monetary policy. But the amount, and timing, of the change will be crucial, either rattling or soothing investors. Jobs, Jobs, Jobs As of November, the U.S. labor market had already notched the best year for job growth since 1999. If that momentum continues for another year the current economic expansion may begin to look like a boom. But for the past five years the economy has given several head fakes, where job growth looked to be achieving real velocity only to falter. And wage growth remains weak. Angst in Europe Global investors have been unable to rest easy, fearing Europe's debt crisis could flare up again at any moment. Now, the European Central Bank is considering purchasing government bonds to help Europe's economies--just as a new round of uncertainty has emerged around Greece's national elections in January, where a left-wing party challenging the ruling conservatives wants to push back on austerity measures. Spain, too, will hold elections this year amid widespread discontent at the country's 24% unemployment rate. Even Germany, long the eurozone's economic engine, stumbled in 2014 with its economy shrinking 0.1% in the second quarter and growing just 0.1% in the third. Abenomics, Part 2 Japan begins the New Year having approved a $29 billion fiscal stimulus package. The Bank of Japan ratcheted up its monetary stimulus in October by boosting the size of its bond-purchase program. Will the new phase of Prime Minister Shinzo Abe's economic strategy, known as Abenomics, be more successful? The first phase also included massive fiscal and monetary stimulus measures. But Japan's economy still suffered two quarters of declining GDP after a national sales tax increase in April. China's Mounting Issues After decades of growth averaging 10%, the outlook for China is now threatened by enormous debts taken on to finance infrastructure, an aging population and explosive urbanization. Rebalancing an economy with 1.4 billion people to rely more on consumer spending--what many observers say China needs--is much easier said than done. How Now, Dow? The Dow Jones Industrial Average recently hit 18000, up more than 170% since the darkest days of 2009. Another record-setting year could swell investment accounts and confidence even further. But if the five-year equity boom proves to be near its end, that could deflate hopes in the broader economy as well. Oil Gives--and Takes The collapse of petroleum prices has brought cheaper gasoline to consumers, but it could challenge the domestic oil boom that stretches from Texas to North Dakota. The question is whether having fewer paychecks spent at the fuel pump outweighs the downside to the energy industry--such as lower investment in drilling and potential job cuts. Josh Zumbrun
Subject: New year; Monetary policy
Location: China United States--US Europe
People: Abe, Shinzo
Company / organization: Name: Bank of Japan; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 1, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641350656
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641350656?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Good Times Run Out for Sand Producers; Fracking Boom Pushed Up Demand, but Oil-Price Collapse Alters Outlook
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2015: n/a.
Abstract:
[...]for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business--and not all of them are ready for the wild ride, industry analysts say. in hydraulic fracturing, or fracking, which has pushed American oil output above 9 million barrels a day, rivaling the production of Saudi Arabia or Russia.
Full text: "This isn't our first rodeo" has become a catchphrase among oil-industry executives who are laying off workers and dialing back spending in the wake of tumbling crude-oil prices. But for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business--and not all of them are ready for the wild ride, industry analysts say. in hydraulic fracturing, or fracking, which has pushed American oil output above 9 million barrels a day, rivaling the production of Saudi Arabia or Russia. Sand companies' biggest customers used to be golf courses and glass manufacturers, but the oil boom and now roughly 60% of business is tied to fracking, according to PacWest Consulting Partners, which forecasts sand demand. Now that , many fracking companies are retrenching--and that is bad news for sand producers. Earlier this fall PacWest projected sand use would grow by 20% each year in 2015 and 2016. But following the plunge in oil prices, PacWest now expects sand demand to stay flat. Meanwhile, could add another 10% on top of the existing pile, creating a glut and pushing down prices, said Samir Nangia, a principal of PacWest. Global oil prices have plunged 50% since June, as the surging supply--thanks to fracking--collided with lackluster world-wide demand for fuel this fall. With their revenue threatened, to dial down their spending and the companies they buy sand from will be easy targets, said Karen Nickerson, an energy analyst at Moody's. "They're going to push on who they can," she said. U.S. Silica Holdings Inc., which operates sands mines in Wisconsin, Illinois and Oklahoma, says it is still expecting to grow in 2015, said chief executive Bryan Shinn. Even if oil companies drill fewer wells next year, they are increasing the amount of sand they use per well, he said. "This is providing us with a backstop," said Mr. Shinn, adding that job cuts aren't in the cards for his company. "We're not even talking about that. If anything we might be looking to add jobs as opportunities arise." About 70% of U.S. Silica's sales are under contract and locked in at attractive margins, the company said. Doug Sheridan, an analyst at EnergyPoint Research, said sand companies ought to take their cues from Halliburton Co., Schlumberger Ltd. and other oil-field-service companies that have announced cutbacks and workforce reductions. "Sitting on your hands and waiting isn't what the veterans do," Mr. Sheridan said. "There are a lot of wide-eyed people out there right now in the industry." Silica Holdings' Mr. Shinn and other sand executives acknowledge they have been warned that customers could soon try to renegotiate contracts and push for lower prices. "They've put us on notice," said Rick Shearer, chief executive of Emerge Energy Services LP, another sand company. "Lower oil prices are a concern. This adds a lot of uncertainty to 2015." Emerge Energy was the darling of Wall Street earlier this year. It made its debut on the stock market at $17 in May 2013 and soared as high as $145 in August. Today it trades around $54. The stock price of FMSA Holdings Inc., the holding company for Fairmount Santrol, an Ohio-based sand miner, has fallen more than 55% since the company went public in October. But Chief Executive Jenniffer Deckard said the company is no stranger to energy market cycles, since it has been selling frack sand to Halliburton as far back as 1980. "We have managed through these cycles before," she said. "We are again working closely with our customers to understand both the short-term impact and looking at long-term opportunities." Write to Dan Molinski at Corrections & Amplifications The chief executive of FMSA Holdings Inc. is Jenniffer Deckard. An earlier version of this article misspelled her first name. Credit: By Dan Molinski
Subject: Petroleum industry; Prices; Hydraulic fracturing
Location: Russia Saudi Arabia
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 1, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641352354
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641352354?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
MLPs: The Oil Market's Lost Children; Share Prices, Generous Payouts of Drilling MLPs Are Under Increasing Pressure
Author: Gilbert, Daniel; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Jan 2015: n/a.
Abstract:
[...]the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. In December, the company sold acreage in Texas and Oklahoma for $1.8 billion and plans to use proceeds to whittle down its $12.3 billion debt, which is more than six times cash flow over the last year, according to S&P. If oil and gas prices remain low, "there would be an impact to our cash flow despite our conservative hedging strategy and diverse portfolio of assets," Mr. Ellis, Linn's CEO told analysts in November.
Full text: One of the hottest trends in the energy industry in recent years, oil-and-gas drilling partnerships, is looking increasingly iffy in the face of falling crude oil prices. By organizing themselves as partnerships, energy producers can avoid corporate taxes and offer hefty dividend-like payments that are popular with investors. Executives of the new firms have raised money easily. The partnerships helped bankroll the U.S. shale boom, spending billions to buy known oilfields from cash-hungry drillers that, in turn, wildcatted for new prospects. But the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. Many are saddled with heavy debt loads. Some, with less cash to pay out to investors, are now weighing whether to cut their payouts, executives say. Fearing such a move, investors have sent shares of several energy partnerships tumbling about 70% in the past six months, a drop that could make it harder for them to raise funds and finance deals that could boost their cash distributions. These woes could ripple across the industry. If the MLPs pull back from deal-making, it could deprive other exploration-and-production companies of needed cash. Linn Energy LLC, the largest partnership that pumps oil and gas, led a revival of such companies by tapping into investor appetite for stocks that yield big dividends but are cheaper than blue chips. Founded by energy investor Michael Linn in 2003 with $16.3 million, the company went public in 2006, and moved out of a three-story office building in Pittsburgh and into Houston's tallest skyscraper. Now led by Chief Executive Mark Ellis, Linn has raised $15.9 billion in equity and debt since its founding, shelling out $11.8 billion to buy oil and gas properties, according to S&P Capital IQ. It posted $2.3 billion in 2013 revenue and had a stock-market value of $10.8 billion in July. But Linn's shares have fallen even more sharply than oil prices, plummeting 69% and erasing $7.5 billion in market value in the past two quarters. Each share pays out $2.90 annually, but now trades at about $10 compared with more than $30 six months ago. "They're just not going to pay out as much as they have been paying," Ethan Bellamy, an analyst at Robert W. Baird & Co, says of Linn and its peers. He downgraded Linn, its affiliate LinnCo LLC and four other partnerships last month in part because he expects that instead of paying down debt, as he recommends, they will put off cutting shareholder distributions. "Without a significant change in commodity prices, none of them are supportable," Mr. Bellamy says of the payouts. UBS analysts have projected that Linn would need to cut its payout by 22% this year to avoid a sizable increase in debt. Linn didn't respond to requests for comment. In December, the company sold acreage in Texas and Oklahoma for $1.8 billion and plans to use proceeds to whittle down its $12.3 billion debt, which is more than six times cash flow over the last year, according to S&P. If oil and gas prices remain low, "there would be an impact to our cash flow despite our conservative hedging strategy and diverse portfolio of assets," Mr. Ellis, Linn's CEO told analysts in November. At rival Vanguard Natural Resources LLC, executives are waiting to see how long oil and gas prices stay low before making changes to the distribution. "In this type of environment, people are contemplating how long they will maintain it," says Richard Robert, Vanguard's finance chief. "It's just too soon to make that big a decision," he adds, saying the Houston-based company can keep up its payout even if cash flow declines for a time. Linn and Vanguard are different from most exploration and production companies. Their strategy is similar to pipeline operators, also organized as partnerships, whose toll-like fees let them pay steady dividends. In that vein, Linn and its peers shy away from prospecting in America's prolific shale-rock formations, which are risky and costly to develop. Instead, they tend to buy up wells that have passed their peak output but still deliver steady volumes of oil and gas. It is an approach designed to maximize the cash left over after drilling--and available to distribute to shareholders. To manage swings in fuel prices, the partnerships have contracts that guarantee them minimum prices for oil and gas. Such contracts, or hedges, will help them weather lower prices in the near term. But many of their hedges begin expiring this year, leaving the partnerships exposed if energy prices stay low. That risk has weighed heavily on their stock prices, while shares of some of the biggest pipeline MLPs have risen in recent months. Partnerships that produce mostly natural gas have held up better in the energy market's recent swoon. Gas accounts for more than half of Memorial Production Partners LP's output, and its shares are down 40% since June 30, roughly the same as an index of publicly traded U.S. oil-and-gas producers. In contrast, Breitburn Energy Partners LP and Mid-Con Energy Partners LP, which pump mostly oil, are down 68% and 73%, respectively. A lot of energy partnerships have relied on issuing equity to raise cash to buy more oil and gas properties, but their deflated share prices make this option less attractive. Memorial last month said it would spend $150 million buying back stock, opting to scoop up its depressed shares as it waits for cash-needy energy companies to offer bargains for oil and gas wells. History suggests some risks to trimming payouts. The last time oil and gas prices were this low, in 2009, Breitburn suspended its payout and its shares lost 34% of their value in a single day. Breitburn's shares bounced back to end that year up 36% as oil prices rebounded. "This sector tends to get hit particularly hard when oil prices decline rapidly," says Jim Jackson, Breitburn's chief financial officer. "But it also tends to recover very well when prices turn around." Write to Daniel Gilbert at and Alison Sider at Credit: By Daniel Gilbert and Alison Sider
Subject: Cash flow; Investments; Natural gas; Crude oil prices; Petroleum industry
Location: United States--US
Company / organization: Name: Linn Energy LLC; NAICS: 211112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 1, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641352359
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641352359?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Restructuring Professionals Have Some Hope Despite Expected Slow 2015; Drivers for Their Industry, Like Falling Oil Prices and Potentially Higher Interest Rates, Strengthening
Author: Palank, Jacqueline
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract:
[...]restructuring professionals don't expect the likely gradual rate increases dramatically to affect borrowers immediately.
Full text: As bankruptcy and restructuring professionals gear up for another slow year, some drivers for the industry, such as low oil prices and potentially higher interest rates, are strengthening. Still, those drivers aren't expected to result in a broad shakeout across corporate America, as credit markets still remain friendly to many borrowers, keeping corporate defaults and Chapter 11 filings low. "We would expect there to be a bit more activity in 2015," said Ford Phillips, a KPMG Corporate Finance managing director. "We're still experiencing the effects of what's been an incredibly strong credit cycle. I wouldn't believe there'd be a significant spike in defaults this year, but there probably will be some." One of the factors helping companies avoid default is a robust high-yield debt market, according to Dan Dooley, chief executive of MorrisAnderson. For several years now, companies without investment-grade credit ratings have thus been able to access the financing they need to push off debt maturities. Standard & Poor's Ratings Services, for instance, expects the U.S. corporate 12-month speculative-grade default rate to rise to 2.4% by Sept. 30, 2015, a relatively modest increase from the 1.6% rate measured in September 2014 and 2.2% in December 2013. Meanwhile, Fitch Ratings expects the U.S. high-yield default rate to fall to between 1.5% and 2%. Fitch says less than $28 billion of high-yield debt is expected to come due next year, of which just $2.5 billion is considered to be at highest risk of default. A significant rise in interest rates, however, could spur more defaults. While the Federal Reserve indicated in mid-December that after six years of keeping rates near zero, it would explore raising rates, it also said it would be patient in doing so. As a result, restructuring professionals don't expect the likely gradual rate increases dramatically to affect borrowers immediately. One recent development that could increase distress at some companies has been a sudden and sharp drop in oil prices. As of Wednesday, crude-oil prices had fallen below $54 per barrel, their lowest since 2009. "That's going to be a mess in the next year" for oil and gas drillers, producers and distributors as well as for companies that serve that industry, Mr. Dooley predicted. On the other hand, he said, "it's going to help a lot of other businesses" that purchase oil, like transportation companies. Another industry expected to experience distress in 2015 is retail, which, despite the economic recovery, hasn't seen shoppers return in droves because of limited wage growth and disposable income. Teen apparel retailers Delia's and Deb Shops recently sought Chapter 11 protection, and others are expected to follow. "I expect there to be less retailers in a year from now than there are today, especially on the specialty apparel side," said Perry Mandarino, who leads Pricewaterhouse Coopers' restructuring practice. "I don't think the ones that have already filed will be the last of this season." Also in 2015, health-care providers will continue to grapple with low reimbursement rates from government insurers, according to McDermott Will & Emery partner Bill Smith. Providers are also being expected to do more with less, as they are required by the Affordable Care Act to invest in transferring paper record-keeping and billing functions to electronic systems. Overall, Chapter 11 filings, on the wane since 2009, are expected to remain low not only due to broader economic factors but also due to the expense of the proceedings. But Chapter 11 will continue appeal to companies that have already struck a restructuring deal with creditors or are seeking to sell themselves, both of which can be accomplished relatively quickly and predictably under the court's purview. "To the extent we have Chapter 11 filings, and we certainly will, I think they will be companies that want highly structured solutions," said Sidley Austin partner Jessica Boelter. Stephanie Gleason contributed to this article Write to Jacqueline Palank at Credit: By Jacqueline Palank
Subject: High yield investments; Junk bonds; Trends; Interest rates; Energy economics; Debt restructuring
Location: United States--US
Company / organization: Name: MorrisAnderson; NAICS: 541611; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641369879
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641369879?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Year-End Review & Outlook (A Special Report) --- Low Oil Prices May Be New Normal
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Jan 2015: R.1.
Abstract:
Analysts say prices could fall further as wintertime heating-oil demand recedes in the second quarter, and U.S. drivers will reap the benefits in the form of cheap gasoline. While demand is liable to perk up as oil prices stay low, that won't happen right away, analysts say, especially given tepid global economic growth.
Full text: Plunging oil prices in the second half of 2014 upended global economic forecasts, boosted consumer spending and roiled markets from Moscow to Midland, Texas. Now, analysts and investors -- most of whom were caught off-guard when U.S. prices dropped from $107.26 a barrel in June to $53.27 a barrel Wednesday -- are calling low prices the new normal. Investors and traders say a price recovery likely won't come until the second half of 2015, as U.S. oil output keeps rising and subdued global growth weighs on demand. It will take months for the global glut of oil to shrink, market participants say. Producers will be slow to cut back on drilling, and consumers won't change their buying habits right away. Analysts say prices could fall further as wintertime heating-oil demand recedes in the second quarter, and U.S. drivers will reap the benefits in the form of cheap gasoline. Bankers and investors are watching for a new wave of deal making in the energy industry, as weak and highly leveraged companies struggle to withstand low prices. "We have yet to restore balance to this market," said David Martin, head of global oil strategy at J.P. Morgan Chase & Co. "One can reasonably expect that there's further price downside in the short term." J.P. Morgan expects oil prices to bottom in the first quarter. For the year, the bank sees global benchmark Brent crude averaging $82 a barrel and U.S. prices averaging $77.25 a barrel. This past year was expected by many to bring stable, triple-digit oil prices. Chevron Corp.'s chief executive declared in March that "the $100 barrel is the new $20," and traders complained that several years of low volatility had made it difficult to make money buying and selling oil. Now, analysts and investors say the only certainty is volatility, as the global crude market adjusts to ample supplies and tepid global growth. U.S. production has soared to its highest level since 1986 due to new technologies enabling producers to access oil trapped in shale-rock formations. U.S. imports of crude have fallen from a peak of 10.8 million barrels a day in June 2005 to just 7.5 million barrels a day in September. That leaves exporters competing to sell the barrels that used to go to the U.S. to other markets, mainly in Asia. As an oil oversupply emerged this past summer, companies and analysts called for the Organization of the Petroleum Exporting Countries, a group of 12 oil-producing nations, to reduce its production to prevent prices from falling. At its November meeting, OPEC declined to do so, and prices sank in response. For years, oil has been seen as less volatile than other commodity markets because of the presence of OPEC. Investors are now questioning whether the group has lost its power. "OPEC basically just said, 'We can't do this collectively. We are no longer the dominant producer,' " said George Zivic, who manages the $384 million Oppenheimer Commodity Strategy Total Return Fund. "The previous 30-year regime in oil has changed." Others disagree, and some analysts expect OPEC to call an emergency meeting to respond to low prices before its next scheduled gathering in June. "I think it's very much too early to write off OPEC," said Ian Taylor, chief executive of oil trader Vitol, at the Platts Global Energy Outlook Forum in December. Without action from OPEC, individual companies or countries would need to produce less oil to cut back on the current oversupply, which is estimated by analysts to be as high as two million barrels a day. But companies will reduce investment in drilling new wells before they shut existing ones, meaning it could take months for supply growth to slow. And as drilling has become more efficient, many shale-oil producers can still make money churning out crude at current prices. On the demand side, low oil prices are expected to boost the struggling global economy. Consumers saving money on gas can spend more on other purchases. Drivers will especially benefit in the U.S., where low oil prices generally lead quickly to low gas prices, without currency fluctuations or fuel subsidies cutting into the reductions, as in some other countries. But after years of high gas prices, consumers have become more efficient, and so have their vehicles. While demand is liable to perk up as oil prices stay low, that won't happen right away, analysts say, especially given tepid global economic growth. To be sure, a sudden change in supply due to a geopolitical event or OPEC decision could send prices higher. Barring that, most market watchers call for prices to recover somewhat in the second half of 2015 as supply and demand come into balance. But it could be years before traders buy and sell $100 barrels again, analysts say. Of low oil prices, said Vitol's Mr. Taylor, "we might have to live here for a much longer period than perhaps, at the moment, we are expecting." Credit: By Nicole Friedman
Subject: Petroleum industry; Volatility; Year in review; Crude oil prices; Economic forecasts
Classification: 9180: International; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.1
Publication year: 2015
Publication date: Jan 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641372545
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641372545?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Frack-Sand Boom Slips Away --- Fracking Activity Pushed Up Demand, but Oil-Price Collapse Alters Outlook
Author: Molinski, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Jan 2015: B.2.
Abstract:
Doug Sheridan, an analyst at EnergyPoint Research, said sand companies ought to take their cues from Halliburton Co., Schlumberger Ltd. and other oil-field-service companies that have announced cutbacks and workforce reductions.
Full text: Corrections & Amplifications The first name of FMSA Holdings Inc. Chief Executive Jenniffer Deckard was misspelled as Jennifer in a Corporate News article Jan. 2 on troubles in the sand-mining business. (WSJ Jan. 9, 2015) "This isn't our first rodeo" has become a catchphrase among oil-industry executives who are laying off workers and dialing back spending in the wake of tumbling crude-oil prices. But for many sand producers, this is their first time on the bucking bronco that is the cyclical energy business -- and not all of them are ready for the wild ride, industry analysts say. Sand is an important ingredient in hydraulic fracturing, or fracking, which has pushed American oil output above 9 million barrels a day, rivaling the production of Saudi Arabia or Russia. Sand companies' biggest customers used to be golf courses and glass manufacturers, but the oil boom brought energy clients to their door and now roughly 60% of business is tied to fracking, according to PacWest Consulting Partners, which forecasts sand demand. Now that oil prices have fallen, many fracking companies are retrenching -- and that is bad news for sand producers. Earlier this fall PacWest projected sand use would grow by 20% each year in 2015 and 2016. But following the plunge in oil prices, PacWest now expects sand demand to stay flat. Meanwhile, new sand mines could add another 10% on top of the existing pile, creating a glut and pushing down prices, said Samir Nangia, a principal of PacWest. Global oil prices have plunged 50% since June, as the surging supply -- thanks to fracking -- collided with lackluster world-wide demand for fuel this fall. With their revenue threatened, oil drillers and fracking companies are under tremendous pressure to dial down their spending and the companies they buy sand from will be easy targets, said Karen Nickerson, an energy analyst at Moody's. "They're going to push on who they can," she said. U.S. Silica Holdings Inc., which operates sands mines in Wisconsin, Illinois and Oklahoma, says it is still expecting to grow in 2015, said chief executive Bryan Shinn. Even if oil companies drill fewer wells next year, they are increasing the amount of sand they use per well, he said. "This is providing us with a backstop," said Mr. Shinn, adding that job cuts aren't in the cards for his company. "We're not even talking about that. If anything we might be looking to add jobs as opportunities arise." About 70% of U.S. Silica's sales are under contract and locked in at attractive margins, the company said. Doug Sheridan, an analyst at EnergyPoint Research, said sand companies ought to take their cues from Halliburton Co., Schlumberger Ltd. and other oil-field-service companies that have announced cutbacks and workforce reductions. "Sitting on your hands and waiting isn't what the veterans do," Mr. Sheridan said. "There are a lot of wide-eyed people out there right now in the industry." Silica Holdings' Mr. Shinn and other sand executives acknowledge they have been warned that customers could soon try to renegotiate contracts and push for lower prices. "They've put us on notice," said Rick Shearer, chief executive of Emerge Energy Services LP, another sand company. "Lower oil prices are a concern. This adds a lot of uncertainty to 2015." Emerge Energy was the darling of Wall Street earlier this year. It made its debut on the stock market at $17 in May 2013 and soared as high as $145 in August. Today it trades around $54. The stock price of FMSA Holdings Inc., the holding company for Fairmount Santrol, an Ohio-based sand miner, has fallen more than 55% since the company went public in October. But Chief Executive Jennifer Deckard said the company is no stranger to energy market cycles, since it has been selling frack sand to Halliburton as far back as 1980. Credit: By Dan Molinski
Subject: Petroleum industry; Mines; Sand & gravel; Crude oil prices; Hydraulic fracturing
Location: Russia Saudi Arabia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Classification: 9180: International; 8510: Petroleum industry; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Jan 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641372701
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641372701?acc ountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Brazil Leader Starts Term on Shaky Ground --- Rousseff Pledges to Spur Economy, Fight Graft Amid Probe Surrounding State Oil Firm That Has Emboldened Her Opponents
Author: Trevisani, Paulo; Lewis, Jeffrey T
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Jan 2015: A.16.
Abstract:
In an inauguration ceremony that was upbeat but drew sparse applause and little spontaneous celebration by her supporters, Ms. Rousseff extolled her legacy of poverty reduction while outlining a vision to get Latin America's largest economy back on track.
Full text: BRASILIA -- President Dilma Rousseff began her second term in office with promises to fight corruption and fix the economy, acknowledging the many challenges facing Brazil over the next four years. In an inauguration ceremony that was upbeat but drew sparse applause and little spontaneous celebration by her supporters, Ms. Rousseff extolled her legacy of poverty reduction while outlining a vision to get Latin America's largest economy back on track. "We will prove that it is possible to make adjustments to the economy without repealing rights that have been won or betray social commitments," she said in a speech in Brazil's Congress attended by cabinet members, foreign dignitaries, allied lawmakers and other officials. Her pledge came as Brazil confronts flat growth, stubbornly high inflation, ballooning debt and a potentially explosive corruption scandal at state-controlled oil giant Petroleo Brasileiro SA, or Petrobras. The tone stood in contrast to 2011, when she was first inaugurated and Brazil's economy was coming off a 7.5% expansion the year before, fueled by a commodities boom that has long since ended. Ms. Rousseff's first administration was marked by a robust expansion of popular social programs that helped her win re-election. But her new economic team has already begun belt-tightening to reduce growing deficits. Earlier this week the government announced measures that will cut unemployment and retirement benefits. Lawmakers haven't yet approved the measures. Economists have urged spending cuts to tame inflation, which for years have been at the top end of Brazil's 2.5% to 6.5% target range. Brazil's current mix of a slowing economy and rising prices is often attributed to what some say were policy missteps -- such as excessive government intervention -- by Ms. Rousseff's administration. Joaquim Levy, Brazil's new finance minister, is tasked with preserving Brazil's hard-won investment-grade credit rating, obtained in 2008, following a downgrade this past year. But fixing the economy could mean tough political battles, even with government allies. "We expect the president to be loyal to calls from workers to advance in labor benefits, not a package of reforms that hurt workers," said Senator Randolfe Rodrigues, from one of the several leftist parties that support the Rousseff administration, to reporters as he walked into Congress for the inauguration. A protege of former President Luiz Inacio Lula da Silva, Ms. Rousseff struggled at times during her first four years to get controversial bills approved, even with her broad coalition in Congress. Her second term promises to be even tougher. Ms. Rousseff eked out her narrow victory in the October presidential race, relying on attack ads to tear down her opponents. Still, her Workers' Party and most of its allied parties lost seats in Congress. But the darkest cloud on the horizon for Ms. Rousseff might be the fast-moving corruption scandal at Petrobras. Brazilian prosecutors allege that executives at Petrobras conspired with construction companies to inflate the cost of contracts, skimming off as much as $1.5 billion, by the estimate of Brazil's budget watchdog, to enrich themselves while funneling kickbacks to Ms. Rousseff's Workers' Party and its allies. Ms. Rousseff hasn't been implicated in the scandal, and leaders of her party have repeatedly denied allegations of involvement. Police have already filed charges against 36 suspects, including two former Petrobras officials. In her speech on Thursday, Ms. Rousseff said that "corruption offends and humiliates the workers, the business people and all honest and good-willing Brazilians. Corruption must be extirpated." Prosecutors are expected to start handing down indictments of elected officials in February. The scandal has emboldened opposition parties, which are pushing to reopen a parliamentary probe into the Petrobras case after an earlier one recommended charges be filed against dozens of people. "Congress has an obligation to investigate," said Federal Deputy Antonio Imbassahy, leader in the lower house for Brazil's largest opposition party, the Brazilian Social Democracy Party, after listening to the speech on TV. Given the many difficulties facing Ms. Rousseff, including calls for her impeachment, she will struggle to turn those challenges to her advantage. Thousands of Ms. Rousseff's supporters were on hand for the celebration, some of them bused in by the ruling Workers' Party. While many expressed loyalty to the president for expanding social programs that have pulled millions from poverty, some expressed doubts that she can fix Brazil's problems quickly. Sitting on the grass under the shade of some palm trees to get relief from a blazing sun and 90-degree heat, Ana Paula de Assis, a 38-year old housemaid said she expected the president to "improve health, safety, education," but doubted inflation could be tamed anytime soon. "Our salary never goes up, only prices," she said. Credit: By Paulo Trevisani and Jeffrey T. Lewis
Subject: Retirement benefits; Negative campaigning; Political leadership; Corruption in government; Inaugurations
Location: Latin America Brazil
People: Levy, Joaquim Lula da Silva, Luiz Inacio Rousseff, Dilma
Company / organization: Name: Congress; NAICS: 921120; Name: Petroleos Brasileiro SA; NAICS: 211111
Classification: 9173: Latin America; 1210: Politics & political behavior
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2015
Publication date: Jan 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641372725
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641372725?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Oil Market's Lost Children: MLPs --- Shares Tumble as Firms Cope With Lower Oil Prices and Weigh Payout Cuts; Enough Cash to Go Around?
Author: Gilbert, Daniel; Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Jan 2015: B.1.
Abstract:
[...]the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. In December, the company sold acreage in Texas and Oklahoma for $1.8 billion and plans to use proceeds to whittle down its $12.3 billion debt, which is more than six times cash flow over the last year, according to S&P. If oil and gas prices remain low, "there would be an impact to our cash flow despite our conservative hedging strategy and diverse portfolio," Linn's CEO told analysts in November.
Full text: One of the hottest trends in the energy industry in recent years, oil-and-gas drilling partnerships, is looking increasingly iffy in the face of falling crude oil prices. By organizing themselves as partnerships, energy producers can avoid corporate taxes and offer hefty dividend-like payments that are popular with investors. Executives of the new firms have raised money easily. The partnerships helped bankroll the U.S. shale boom, spending billions to buy known oilfields from cash-hungry drillers that, in turn, wildcatted for new prospects. But the 50% drop in crude-oil prices since the summer, combined with the lowest U.S. natural-gas prices in two years, has taken the shine off the so-called master limited partnerships that pump the fuels. Many are saddled with heavy debt. Some, with less cash to pay to investors, are now weighing whether to cut their payouts, executives say. Fearing such a move, investors have sent shares of several energy partnerships tumbling about 70% in the past six months, a drop that could make it harder for them to raise funds and finance deals that could boost their cash distributions. These woes could ripple across the industry. If the MLPs pull back from deal-making, it could deprive other exploration-and-production companies of needed cash. Linn Energy LLC, the largest partnership that pumps oil and gas, led a revival of such companies by tapping into investor appetite for stocks that yield big dividends but are cheaper than blue chips. Founded by energy investor Michael Linn in 2003 with $16.3 million, the company went public in 2006, and moved out of a three-story office building in Pittsburgh and into Houston's tallest skyscraper. Now led by Chief Executive Mark Ellis, Linn has raised $15.9 billion in equity and debt since its founding, shelling out $11.8 billion to buy oil and gas properties, according to S&P Capital IQ. It posted $2.3 billion in 2013 revenue and had a stock-market value of $10.8 billion in July. But Linn's shares have fallen even more sharply than oil prices, plummeting 69% and erasing $7.5 billion in market value in the past two quarters. Each share pays out $2.90 annually, but now trades at about $10 compared with more than $30 six months ago. "They're just not going to pay out as much as they have been paying," Ethan Bellamy, an analyst at Robert W. Baird & Co, says of Linn and its peers. He downgraded Linn, its affiliate LinnCo LLC and four other partnerships last month in part because he expects that instead of paying down debt, as he recommends, they will put off cutting shareholder distributions. "Without a significant change in commodity prices, none of them are supportable," Mr. Bellamy says of the payouts. UBS analysts have projected that Linn would need to cut its payout by 22% this year to avoid a sizable increase in debt. Linn didn't respond to requests for comment. In December, the company sold acreage in Texas and Oklahoma for $1.8 billion and plans to use proceeds to whittle down its $12.3 billion debt, which is more than six times cash flow over the last year, according to S&P. If oil and gas prices remain low, "there would be an impact to our cash flow despite our conservative hedging strategy and diverse portfolio," Linn's CEO told analysts in November. At rival Vanguard Natural Resources LLC, executives are waiting to see how long oil and gas prices stay low before making changes to the distribution. "In this type of environment, people are contemplating how long they will maintain it," says Richard Robert, Vanguard's finance chief. "It's just too soon to make that big a decision," he adds, saying the company can keep up its payout even if cash flow declines for a time. Linn and Vanguard are different from most exploration and production companies. Their strategy is similar to pipeline operators, also organized as partnerships, whose toll-like fees let them pay steady dividends. In that vein, Linn and its peers shy away from prospecting in America's prolific shale-rock formations, which are risky and costly to develop. Instead, they tend to buy up wells that have passed their peak output but still deliver steady volumes of oil and gas. It is an approach designed to maximize the cash left over after drilling-- and available to distribute to shareholders. To manage swings in fuel prices, the partnerships have contracts that guarantee them minimum prices for oil and gas. Such contracts, or hedges, will help them weather lower prices in the near term. But many of their hedges begin expiring this year, leaving the partnerships exposed if energy prices stay low. That risk has weighed heavily on their stock prices, while shares of some of the biggest pipeline MLPs have risen in recent months. Partnerships that produce mostly natural gas have held up better in the energy market's recent swoon. Gas accounts for more than half of Memorial Production Partners LP's output, and its shares are down 40% since June 30, roughly the same as an index of publicly traded U.S. oil-and-gas producers. In contrast, Breitburn Energy Partners LP and Mid-Con Energy Partners LP, which pump mostly oil, are down 68% and 73%, respectively. A lot of energy partnerships have relied on issuing equity to raise cash to buy more oil and gas properties, but their deflated share prices make this option less attractive. History suggests some risks to trimming payouts. The last time oil and gas prices were this low, in 2009, Breitburn suspended its payout and its shares lost 34% of their value in a single day. Breitburn's shares bounced back to end that year up 36% as oil prices rebounded. "This sector tends to get hit particularly hard when oil prices decline rapidly," says Jim Jackson, Breitburn's finance chief. "But it also tends to recover very well when prices turn around." Credit: By Daniel Gilbert and Alison Sider
Subject: Cash flow; Petroleum industry; Financial performance; Crude oil prices; Master limited partnerships
Location: United States--US
Company / organization: Name: Linn Energy LLC; NAICS: 211112
Classification: 9190: United States; 8510: Petroleum industry; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641372822
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641372822?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Repro duced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Blaze at Libya's Largest Oil Port Extinguished; Not Clear When the Port Will Restart Loadings
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract: None available.
Full text: A fire at Libya's largest oil port has been extinguished by firefighters, officials said Friday. The blaze at the As Sidra terminal was between an Islamist militia and forces loyal to the internationally recognized government. The fire briefly pushed global oil prices higher. A top official at the state-owned National Oil Co., who declined to be named, said the fire had been put out at the terminal, but that it was impossible to say when the 400,000 barrels-a-day port could restart loadings. "The fire has burned seven storage tanks and two have collapsed," he said. The official said Libya's oil production now stood at 315,000 barrels a day. That is down from 900,000 barrels a day in September, and is a fraction of its normal capacity of about 1.5 million barrels a day. Write to Benoît Faucon at Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641392105
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641392105?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Falls to More Than Five-Year Low; Prices Slide on Weak Chinese Economic Data and Reports of Increased Production in Some Areas
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract:
China's official manufacturing purchasing managers index, a gauge of conditions in the industry, from 50.3 a month earlier, the National Bureau of Statistics said Thursday, the lowest reading in a year and a half.
Full text: Oil prices slid to more-than five-year lows after weak Chinese economic data and reports of increased crude production in some regions. Crude prices nearly halved last year, the steepest fall since the recession of 2008, as fears of global oversupply and lackluster demand engulfed the market. Data released Friday fueled concerns the oversupply could persist well into 2015. Light, sweet crude oil for February delivery fell 58 cents, or 1.1%, to settle at $52.69 a barrel on the New York Mercantile Exchange, the lowest closing price since April 2009. Prices fell 3.7% on the week. Front-month Brent crude, the global benchmark, declined 91 cents, or 1.6%, to $56.42 a barrel on ICE Futures Europe, the lowest level since May 2009. Prices posted a 5.1% weekly loss. China's official manufacturing purchasing managers index, a gauge of conditions in the industry, from 50.3 a month earlier, the National Bureau of Statistics said Thursday, the lowest reading in a year and a half. A reading above 50 signals expansion. "We already have way too much oil supply on the market, and any weaker economic number out of China is going to maintain the selling pressure for oil," said Naeem Aslam, chief market analyst at AvaTrade. Reports that Russian and Iraqi oil production rose in December also weighed on prices, said Carl Larry, analyst at Oil Outlooks & Opinions. Analysts and investors expect global oil production to rise at a slower pace in 2015 due to the plunge in prices. "Now that you have a whole month of sub-$70 oil under our belt, countries like Russia are definitely going to have to cut back" output, Mr. Larry said. Meanwhile, the dollar climbed against most major currencies, spurred by expectations the Federal Reserve will raise interest rates this year. The strong dollar "seems to limit any upside potential in the oil market," said Myrto Sokou, senior analyst at Sucden Financial. A stronger greenback typically makes the dollar-denominated commodity more expensive in other currencies. U.S. oil prices wavered between gains and losses this week in light holiday trading. "With the volume being light, I think it's more noise than anything else," said Phil Flynn, analyst at the Price Futures Group. "If you step back and look at the big picture, the fundamentals are still very bearish." In other oil-related markets, gasoline for February delivery fell 3.87 cents, or 2.6%, to $1.4334 a gallon, the lowest settlement since April 2009 and down 6% on the week. Diesel for February delivery fell 3.79 cents, or 2.1%, to $1.7957 a gallon, the lowest level since October 2009 and off 4.7% for the week. Josie Cox and Richard Silk contributed to this article. Write to Nicole Friedman at and Georgi Kantchev at Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum industry; Purchasing managers index; Crude oil prices; Petroleum production
Location: China
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641392239
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641392239?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Linn, Breitburn Slash Dividends, Capital Spending Plans; Energy Partnerships Act to Conserve Cash in Wake of Plunging Oil Prices
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract:
"In order to solidify the company's financial position and regain a useful cost of capital, we have reduced the oil and natural gas capital budget and distribution while balancing cash flow and spending," said Mark Ellis, Linn's chief executive.
Full text: Linn Energy LLC and Breitburn Energy Partners LP, the two largest U.S. energy producers by revenue operating as partnerships, slashed shareholder payouts and capital spending in moves that could pressure rivals to take similar steps. Houston-based Linn's aggressive maneuvers to shore up its balance sheet Friday marked the first time it has cut its payout since going public in 2006. Breitburn followed suit with a 50% cut. It temporarily suspended its payout in 2009. By curtailing cash payments to shareholders, the drillers can raise money more cheaply and could have an advantage in making acquisitions, said industry executives. Linn is the largest energy producer set up to pay available cash to shareholders and avoid corporate taxes. On a day that crude oil prices sunk to $52.69 a barrel, the lowest level in more than five years, investors sent Linn's stock up 12%. Breitburn shares rose 9% and rival partnership Vanguard Natural Resources LLC, which didn't announce cuts, gained 11.6%. Linn cut its dividend-like payment to $1.25 a share for 2015, down from $2.90 a share last year, to weather oil prices it expects to hover around $60 a barrel. The company also said it would spend $730 million to drill new wells this year, down 53% from last year. The cuts quelled uncertainty about how Linn could keep up its payouts, which some analysts said weren't sustainable without piling on more debt. Its shares fell 69% in the last six months of 2014. Lower payouts will save the company about $550 million this year based on shares outstanding as of Sept. 30. "In order to solidify the company's financial position and regain a useful cost of capital, we have reduced the oil and natural gas capital budget and distribution while balancing cash flow and spending," said Mark Ellis, Linn's chief executive. Breitburn cited a similar rationale, calling its cuts "difficult." Linn has led energy producers set up to pay available cash to their shareholders, commonly structured as master limited partnerships. It posted about $2.8 billion in revenue through the first nine months of 2014. But the shareholder payouts have become harder to sustain as crude prices recently plunged 50% from their summer peak and natural-gas prices sunk to their lowest levels in two years. Linn, Breitburn and Vanguard have been hit harder than traditional energy companies as investors anticipated cuts to the payouts that made their shares attractive. Even before oil prices fell, Linn early last year drew on its credit line to pay shareholders. "They're doing something drastic now in order to fight another day," Richard Robert, Vanguard's finance chief said of Linn, calling the move "prudent." While the market reaction won't influence Vanguard's decision whether to cut its payouts, Mr. Robert said it is reassuring. "Should that ultimately be the prudent thing for us to do, at least you sleep a little better at night," he said. Linn also disclosed a deal with GSO Capital Partners LP, the credit arm of Blackstone Group LP, which will provide up to $500 million for drilling in exchange for an 85% stake in the profits. After GSO makes a 15% return on the wells, its interest will decline to 5% and Linn will reap 95% of profits. Linn touted the deal as an inexpensive way of adding new oil and gas production, and said it was looking for another such deal to help pay for acquisitions. Energy-producing partnerships favor buying known oil fields over the riskier business of prospecting for new ones. By hedging oil and gas output, they can mitigate price swings and make steady payouts to investors. Linn projects its hedges will cover about 70% of this year's oil production. Alison Sider contributed to this article. Write to Daniel Gilbert at Credit: By Daniel Gilbert
Subject: Crude oil prices; Corporate profits; Investments; Capital expenditures; Natural gas
Location: United States--US
Company / organization: Name: Vanguard Natural Resources LLC; NAICS: 211111, 211112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641416689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641416689?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Crude Prices Force Ethanol Makers to Take It on the Chin; Though Oil's Slide May Hurt the Ethanol Industry, It Could Boost Other Corners of U.S. Agriculture
Author: Bunge, Jacob; Newman, Jesse
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract:
The U.S. ethanol industry reaped about $8.6 billion to $10 billion in profits in 2014, among its most profitable years, according to an estimate from the Renewable Fuels Association, a trade group. Since Sept. 30, U.S. corn futures prices have surged 23%, due in part to farmers storing more of their freshly harvested supplies rather than selling.
Full text: Tumbling oil prices are bringing unwelcome tidings to one of the U.S. Farm Belt's hottest industries. Ethanol makers are bracing for a drop in earnings as cheap crude pushes down the prices they fetch from refiners to blend the corn-based fuel additive into gasoline. Ethanol producers also face a recent jump in the price of corn, their main raw material. Falling profit margins for the $40 billion U.S. ethanol industry may cause some companies to scale back production in 2015, analysts and industry executives say. Still, many observers think ethanol demand may remain steady or even rise if cheap gasoline spurs U.S. motorists to drive more, tempering the hit to ethanol earnings. Crude-oil prices slid 20% in December to about $53 a barrel and fell 46% in 2014. That helped trigger a 25% decline in ethanol futures prices during the month of December and pushed down stock prices for ethanol makers. Shares of Green Plains Inc., one of the largest U.S. ethanol producers, were down 17%, while Pacific Ethanol Inc., a smaller producer, fell 11%. The headwinds come after the sector enjoyed one of the most-profitable years in its history in 2014, buoyed by strong export demand and the lowest corn prices in about four years. Ethanol-industry profit margins reached an all-time high of $2.04 a gallon in April, according to Iowa State University's Center for Agricultural and Rural Development. But margins dropped to 58 cents a gallon on Dec. 19, the center estimates, from $1.12 a gallon on Dec. 3. Lower oil prices have made for an unusual scenario in which gasoline prices currently trade at a discount to ethanol, making blending of the biofuel--which has been required by federal law since the 2000s--a pricier proposition for fuel companies. Most U.S. gas contains as much as 10% ethanol as a result of the federal rules, but fuel companies also can meet ethanol-blending requirements by using credits stored up from surplus use. The shift in the sector's profit outlook means some ethanol makers may have to ratchet down production from the record levels experienced in recent weeks. "I don't think we'll be able to maintain these production rates as an industry," said Green Plains Chief Executive Todd Becker. Though oil's slide may hurt the ethanol industry, it could boost other corners of the U.S. agricultural sector. Meat industry executives expect consumers to spend some of their projected $100 billion in 2015 gas-pump savings at restaurants, increasing beef and chicken sales. Meanwhile, cheaper gasoline will provide some cost relief to farmers as they run tractors on fields and transport grain and other crops. An almost 43% decline in corn prices in the past two years--the result of back-to-back bumper U.S. crops--has been a boon to the ethanol sector, which consumes about one-third of the U.S. corn crop each year. The lower production cost made U.S. corn ethanol more competitive in export markets with the sugar-derived ethanol produced by Brazil, the U.S.'s main global rival. U.S. exports of the biofuel jumped more than 46% to nearly 681 million gallons in the first 10 months of 2014, from 465 million a year earlier, according to federal data. The U.S. ethanol industry reaped about $8.6 billion to $10 billion in profits in 2014, among its most profitable years, according to an estimate from the Renewable Fuels Association, a trade group. Since Sept. 30, U.S. corn futures prices have surged 23%, due in part to farmers storing more of their freshly harvested supplies rather than selling. Meanwhile, gasoline futures dropped 21% in December, after the Organization of the Petroleum Exporting Countries, or OPEC, on Nov. 27 said its members would continue producing crude oil at their planned rate, despite rising supplies in the U.S. "I think we're facing a period of dim ethanol prices and profitability," said Scott Irwin, professor of agricultural economics at the University of Illinois. "At $1.50 [per gallon for the] wholesale price for gasoline, ethanol producers can't pay $3.75 per bushel of corn and make money. It doesn't work." For now, domestic plants are still pumping out ethanol at a fast rate because profit margins remain adequate, said Hal Reed, chief operating officer for the Andersons Inc. The publicly traded agricultural company is an investor in four ethanol plants capable of making 330 million gallons a year. "We've been operating our plants at full capacity," Mr. Reed said. "Margins are still positive, so it certainly pays to produce all you can." U.S. oil refiners are expected in 2015 to continue mixing gasoline with roughly 10% ethanol to meet annual requirements for the biofuel, ensuring a minimum level of demand for the additive, analysts said. Under a 2007 law intended to spur greater use of renewable fuels, refiners have been required to blend more ethanol into gasoline each year. Though the U.S. Environmental Protection Agency in November deferred announcement of its 2014 blending requirement until next year, refiners have continued to use ethanol due to its typically low cost compared with other octane-boosting additives, industry executives said. While some market watchers anticipate smaller ethanol companies may scale back production from current rates, few expect the industry to suffer as it did in 2008, when surging corn prices spurred bankruptcies. "There's a lot of very strong balance sheets in the industry," said Rick Schwarck, CEO of Absolute Energy LLC, an ethanol plant in St. Ansgar, Iowa. He added that significant cash reserves will allow producers to slow, and perhaps halt, production if margins turn negative, biding their time until it becomes profitable again. One wild card for the industry in 2015 may be exports. Demand from some overseas buyers may ease if cheap oil and gas prices reduce the incentive to add ethanol to fuel supplies. Export markets are the "ultimate swing factor," said the University of Illinois's Mr. Irwin, noting that sales of the biofuel to places like the United Arab Emirates have been the driving force behind recent strength in ethanol prices. "If the market incentive is removed, that process is reversed." Write to Jacob Bunge at and Jesse Newman at Credit: By Jacob Bunge and Jesse Newman
Subject: Ethanol; Profitability; Corn; Meat industry; Biodiesel fuels; Cost control; Futures; Profit margins; Gasoline prices; US exports
Location: United States--US
Company / organization: Name: University of Illinois; NAICS: 611310; Name: Iowa State University; NAICS: 611310; Name: Pacific Ethanol Inc; NAICS: 325193
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641541857
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641541857?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Oil Price Drop Daunts African Rulers
Author: McGroarty, Patrick; Hinshaw, Drew
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Jan 2015: A.16.
Abstract:
Earnings from the 1.7 million barrels produced daily by Angola, sub-Saharan Africa's second-biggest crude producer, have given it a comfortable trade surplus and 5.3% annual growth each year since the global financial crisis in 2009.
Full text: Some of Africa's most entrenched leaders are facing an unprecedented challenge from an unexpected foe: falling oil prices. Rulers of a cluster of nations along Africa's oil-rich Atlantic coast have long used crude revenue to consolidate their power, reward political allies and subsidize basic goods and services. As oil prices decline, that formula for maintaining power looks increasingly inadequate for rulers such as Angola's Jose Eduardo dos Santos. "If the drop in prices continues, he will be in free fall," said Ricardo Soares de Oliveira, a political scientist at the University of Oxford. For more than 30 years in office, Mr. dos Santos has relied on the proceeds from oil sales. If that revenue continues to shrink, "the very assumption that this regime is able to weather all sorts of storms would be in question," Mr. de Oliveira said. Officials in Angola didn't respond to requests seeking comment on how dropping oil prices would affect the government. Earnings from the 1.7 million barrels produced daily by Angola, sub-Saharan Africa's second-biggest crude producer, have given it a comfortable trade surplus and 5.3% annual growth each year since the global financial crisis in 2009. Mr. dos Santos has used the windfall to mute opposition to his autocratic style of government. He has doubled the public-wage budget, spent $5 billion a year on subsidies that hold down gasoline prices and directed billions of dollars to a sovereign-wealth fund that is officially charged with investing in efforts to diversify Angola's economy. It is run by one of his children, Jose Filomeno de Sousa dos Santos. Such largess now appears unsustainable. The country's economy could shrink in 2015 for the first time in two decades, according to London-based Capital Economics. Jose Miranda, a manager for Australia-based engineering contractor Aurecon Group, said Angola's government has cut spending so drastically that his contracts for water and road projects there are down by a third this year. The same tensions are reverberating across the continent. Fitch Ratings warned in December that Cameroon and Gabon also will face a fiscal crunch next year as oil prices drop. Oil receipts pay for a quarter of the national budget in Cameroon, where Paul Biya has ruled for more than three decades. Gabon, ruled since 1967 by Omar Bongo, then his son Ali Bongo Ondimba, draws more than half its budget from oil. Plunging oil prices will also test the grip of Africa's longest-serving leader, Teodoro Obiang, who has ruled Equatorial Guinea since 1979. The country of some 722,000 people is Africa's richest by per capita, yet the World Bank says 80% of the population lives on less than $2 a day. Credit: Patrick McGroarty, Drew Hinshaw
Subject: Petroleum industry; Budgets; Crude oil prices; Economic impact
Location: Africa Angola
People: Bongo, Omar Biya, Paul Dos Santos, Jose Eduardo
Classification: 9177: Africa; 8510: Petroleum industry; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.16
Publication year: 2015
Publication date: Jan 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641829819
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641829819?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Price Poses Tough Challenge for West African Rulers; Regimes in Angola, Other Oil-Rich Nations Find Formula for Rule Upended by Faltering Revenues
Author: McGroarty, Patrick; Hinshaw, Drew
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Jan 2015: n/a.
Abstract: None available.
Full text: Some of Africa's most entrenched leaders are facing an unprecedented challenge from an unexpected foe: falling oil prices. Rulers of a cluster of nations along Africa's oil-rich Atlantic coast have long used crude revenue to consolidate their power, reward political allies and subsidize basic goods and services. As oil prices decline, that formula for maintaining power looks increasingly inadequate for rulers such as Angola's José Eduardo dos Santos. "If the drop in prices continues, he will be in free fall," said Ricardo Soares de Oliveira, a political scientist at the University of Oxford. For more than 30 years in office, Mr. dos Santos has relied on the proceeds from oil sales. If that revenue continues to shrink, "the very assumption that this regime is able to weather all sorts of storms would be in question," Mr. de Oliveira said. Officials in Angola didn't respond to requests seeking comment on how dropping oil prices would affect the government. Earnings from the 1.7 million barrels produced daily by Angola, sub-Saharan Africa's second-biggest crude producer, have given it a comfortable trade surplus and 5.3% annual growth each year since the global financial crisis in 2009. Mr. dos Santos has used the windfall to mute opposition to his autocratic style of government. He has doubled the public-wage budget, spent $5 billion a year on subsidies that hold down gasoline prices and directed billions of dollars to a sovereign-wealth fund that is officially charged with investing in efforts to diversify Angola's economy. It is run by one of his children, José Filomeno de Sousa dos Santos. Such largess now appears unsustainable. The country's economy could shrink in 2015 for the first time in two decades, according to London-based Capital Economics. José Miranda, a manager for Australia-based engineering contractor Aurecon Group, said Angola's government has cut spending so drastically that his contracts for water and road projects there are down by a third this year. The same tensions are reverberating across the continent. Fitch Ratings warned in December that Cameroon and Gabon also will face a fiscal crunch next year as oil prices drop. Oil receipts pay for a quarter of the national budget in Cameroon, where Paul Biya has ruled for more than three decades. Gabon, ruled since 1967 by Omar Bongo, then his son Ali Bongo Ondimba, draws more than half its budget and most of its export revenue from oil. Plunging oil prices will also test the grip of Africa's longest-serving leader, Teodoro Obiang, who has ruled Equatorial Guinea since 1979. The country of some 722,000 people is Africa's richest by per capita, yet the World Bank says 80% of the population lives on less than $2 a day. Even as most in his country remain mired in poverty, Mr. Obiang's son--one of his two vice presidents and presumed successor--reached an out-of-court settlement in October with the U.S. Department of Justice in a civil suit accusing him of amassing more than $300 million of assets through corruption and money laundering. In a statement announcing the settlement, Assistant Attorney General Leslie Caldwell said Teodoro Obiang carried out a "corruption-fueled spending spree" in the U.S. using funds gained through "relentless embezzlement and extortion" of Equatorial Guinea's government and businesses. The president has built a gleaming conference center and seldom-used six-lane highways in Malabo, Equatorial Guinea's capital. Now, he is relocating the capital to the outskirts of the village in the rain forest where he was born, complete with an opera house, golf courses and a five-star hotel. The International Monetary Fund has urged him to curtail those plans as demand for Equatorial Guinea's crude by its biggest customer--the U.S.--shrinks because of shale production there. The country's economy slipped into recession last year and could contract 8% next year, as demand from the U.S. continues to fall. If so, it would be the worst growth rate since "the time of lean cows" more than 30 years ago. That era of brutal repression and starvation led Mr. Obiang to seize power from his uncle and the president, Francisco Macias, and put him on trial on charges of genocide and other offenses. After his conviction by a military tribunal, Mr. Macias was sentenced to death and executed by firing squad. Write to Patrick McGroarty at and Drew Hinshaw at Credit: Patrick McGroarty, Drew Hinshaw
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 2, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642334252
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642334252?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Hedge Fund Cuts Its Losses in 'Man Camp' Provider; With Civeo's Shares Scraping Bottom, Jana Partners Sells Stake in Oil-Field Lodging Company
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2015: n/a.
Abstract:
[...]drillers across North America are paring back staffing and dialing down drilling plans.
Full text: Jana Partners LLC has pulled the plug on its investment in Civeo Corp., a lodging company for oil-field workers, just months after forcing a company spin-off and gaining board seats. Jana, the largest stakeholder in Houston-based Civeo, dropped all of its 12.2 million shares, according to a filing with regulators this past week. Civeo operates lodges where employees of drilling and mining companies live in active energy regions from Canada to Australia. The company's shares have taken a nose dive as oil prices plunged over the last six months. Jana dumped its Civeo shares one day after the company announced it laid off 45% of its workforce in the U.S. and 30% of workers in Canada. Civeo also said it would slash future spending and suspend its dividend amid the downturn in energy prices. The price of a barrel of crude has decreased by about half since the summer. As a result, drillers across North America are paring back staffing and dialing down drilling plans. The slowdown is bound to hit the energy industry's migrant workforce and lower demand for the type of housing near oil fields that is Civeo's specialty, said Stephen Gengaro, an analyst with Sterne Agee. "It has become increasingly clear that project activity has been slowing and that Civeo's contract coverage would only get worse in 2015," Charles Minervino, an analyst at Susquehanna Financial Group LLLP, wrote in a recent note. Civeo has closed two lodges in Canada and is considering shutting two U.S. locations. The company recently shuttered a manufacturing location in Australia where it fabricates oil-field housing. Going forward, fewer rooms than previously anticipated are under contract in Canada and Australia, the company said on a conference call with investors. "Major oil companies in the U.S. oil shales have recently announced reductions in capital spending for 2015 of anywhere from 25% to 50%," said Civeo Chief Executive Bradley Dodson. Those reductions will affect demand for the company's housing--including so-called man camps--in North Dakota and Texas, he said. Civeo has had a rough ride since its June spin-off from Oil States International Inc., an oil-and-gas services company. Jana and another hedge fund, Greenlight Capital Inc., pushed for the split, arguing the division would maximize Civeo's potential for shareholders. The break-up has been tough on Civeo, whose shares closed Friday at $3.87, down 86% from the stock's peak of $28 in June. The shares have been falling since two weeks after the spin-off thanks to declining oil prices and changes to operating strategy, including not converting into a real estate investment trust, which some investors advocated. In October, Civeo appointed three new independent directors--all Jana nominees--to its board. Only two remain. One resigned last week without explanation, according to a filing. Spin-offs have become a popular corporate move, with a record 64 announced in 2014, according to FactSet. Many came at the urging of activist hedge funds like Jana, which argue that unrelated businesses can crimp profits and distract management. But Jana's exit from Civeo highlights a peril for these investors, some of whom have . Jana itself has been stung by an oil-related spin-off before. In 2013 it took a large position in QEP Resources Inc., an oil and gas producer, and urged it spin off its pipeline and gas processing business. QEP capitulated a few months later, but market reaction was muted. The company's shares later fell sharply as oil prices slumped. Jana sold its entire 7% stake in October, mostly at lower prices than it paid. A person familiar with Jana operations said that losses on Civeo, whose shares the hedge fund automatically received in the spinoff, have been largely offset by gains on its Oil States International investment. All told, the investment in Oil States shakes out to a slight loss, the person said. Liz Hoffman contributed to this article. Write to Erin Ailworth at Credit: By Erin Ailworth
Subject: Petroleum industry; Prices; Investments; Capital expenditures
Location: United States--US Australia Canada
Company / organization: Name: Greenlight Capital Inc; NAICS: 523120; Name: Oil States International Inc; NAICS: 213112; Name: Jana Partners LLC; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641544664
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641544664?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Blaze at Libya's Largest Oil Port Extinguished; Not Clear When the Port Will Restart Loadings
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Jan 2015: n/a.
Abstract: None available.
Full text: A fire at Libya's largest oil port has been extinguished by firefighters, officials said Friday. The blaze at the As Sidra terminal was between an Islamist militia and forces loyal to the internationally recognized government. The fire briefly pushed global oil prices higher. A top official at the state-owned National Oil Co., who declined to be named, said the fire had been put out at the terminal, but that it was impossible to say when the 400,000 barrels-a-day port could restart loadings. "The fire has burned seven storage tanks and two have collapsed," he said. The official said Libya's oil production now stood at 315,000 barrels a day. That is down from 900,000 barrels a day in September, and is a fraction of its normal capacity of about 1.5 million barrels a day. Write to Benoît Faucon at Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 3, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641555321
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641555321?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Blaze at Libya's Biggest Oil Port Extinguished
Author: Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Jan 2015: A.8.
Abstract:
A top official at the state-owned National Oil Co., who declined to be named, said the fire had been put out at the terminal, but that it was impossible to say when the 400,000 barrels-a-day port could restart loadings.
Full text: A fire at Libya's largest oil port has been extinguished by firefighters, officials said Friday. The blaze at the As Sidra terminal was sparked during a battle between an Islamist militia and forces loyal to the internationally recognized government. The fire briefly pushed global oil prices higher. A top official at the state-owned National Oil Co., who declined to be named, said the fire had been put out at the terminal, but that it was impossible to say when the 400,000 barrels-a-day port could restart loadings. "The fire has burned seven storage tanks and two have collapsed," he said. The official said Libya's oil production now stood at 315,000 barrels a day. That is down from 900,000 barrels a day in September, and is a fraction of its normal capacity of about 1.5 million barrels a day. Credit: By Benoit Faucon
Subject: Petroleum industry; Petroleum production; Ports; Fires; Military engagements
Location: Libya
Classification: 9177: Africa; 1210: Politics & political behavior; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.8
Publication year: 2015
Publication date: Jan 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641566159
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641566159?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Copper Pulled Down by Oil and the Dollar
Author: Iosebashvili, Ira; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Jan 2015: B.5.
Abstract:
The Chinese government's official manufacturing purchasing managers index, a gauge of conditions in the manufacturing sector, slipped to 50.1 in December from 50.3 a month earlier, the National Bureau of Statistics said Thursday -- the lowest reading in a year and a half.
Full text: Copper prices eased Friday, dragged down by a rising dollar and a further decline in oil prices. Copper for March delivery, the most actively traded contract, closed down 0.3% to $2.8175 a pound on the Comex division of the New York Mercantile Exchange. The WSJ Dollar Index, which gauges the dollar against several major currencies, was recently up 0.7% to 83.59, its highest level since June 2003, as investors seek U.S. assets ahead of the Federal Reserve's expected interest-rate increase this year. Meanwhile, the ICE dollar index surged to its highest level since March 2006. The climbing dollar is bad news for copper, which is priced in the U.S. currency and becomes more expensive for foreign buyers as the dollar appreciates. A drop in oil prices added to copper's woes as some investors sold their commodity holdings to cover losses from oil, said George Gero, a senior vice president at RBC Capital Markets Global Futures. "When investors get margin calls because of falling oil [prices], they sell copper or whatever else they have to sell," Mr. Gero said. Crude closed down 1.1% at $52.69 a barrel, the lowest point in more than five years. Mounting concerns about the Chinese economy, which consumes more than 40% of the world's copper, also weighed on prices. The Chinese government's official manufacturing purchasing managers index, a gauge of conditions in the manufacturing sector, slipped to 50.1 in December from 50.3 a month earlier, the National Bureau of Statistics said Thursday -- the lowest reading in a year and a half. Copper is widely used in manufactured goods and construction, and market participants fear the slowdown could result in lower demand. Copper also declined on the London Metal Exchange on Friday, falling 0.7% to $6,252 a metric ton. In 2014, the red metal registered its biggest annual price drop in three years on the London exchange, sliding by 14% amid ample supply and fears of a world-wide slowdown in demand. On the LME, nickel for three-month delivery fell 2.1% to close at $14,830 a metric ton as stockpiles of the metal advanced to another record Friday. Credit: By Ira Iosebashvili and Georgi Kantchev
Subject: Copper; Commodity prices
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 3, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 009996 60
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641566218
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641566218?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Crude Oil Rings In With Loss
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Jan 2015: B.5.
Abstract:
China's official manufacturing purchasing managers index, a gauge of conditions in the industry, slipped to 50.1 in December from 50.3 a month earlier, the National Bureau of Statistics said Thursday, the lowest reading in a year and a half.
Full text: Oil prices slid to more-than five-year lows after weak Chinese economic data and reports of increased crude production in some regions. Crude prices nearly halved last year, the steepest fall since the recession of 2008, as fears of global oversupply and lackluster demand engulfed the market. Data released Friday fueled concerns the oversupply could persist well into 2015. Light, sweet crude oil for February delivery fell 58 cents, or 1.1%, to settle at $52.69 a barrel on the New York Mercantile Exchange, the lowest closing price since April 2009. Prices fell 3.7% on the week. Front-month Brent crude, the global benchmark, declined 91 cents, or 1.6%, to $56.42 a barrel on ICE Futures Europe, the lowest level since May 2009. Prices posted a 5.1% weekly loss. China's official manufacturing purchasing managers index, a gauge of conditions in the industry, slipped to 50.1 in December from 50.3 a month earlier, the National Bureau of Statistics said Thursday, the lowest reading in a year and a half. A reading above 50 signals expansion. "We already have way too much oil supply on the market, and any weaker economic number out of China is going to maintain the selling pressure for oil," said Naeem Aslam, chief market analyst at AvaTrade. Reports that Russian and Iraqi oil production rose in December also weighed on prices, said Carl Larry, analyst at Oil Outlooks & Opinions. Analysts and investors expect global oil production to rise at a slower pace in 2015 due to the plunge in prices. "Now that you have a whole month of sub-$70 oil under our belt, countries like Russia are definitely going to have to cut back" output, Mr. Larry said. Meanwhile, the dollar climbed against most major currencies, spurred by expectations the Federal Reserve will raise interest rates this year. The strong dollar "seems to limit any upside potential in the oil market," said Myrto Sokou, senior analyst at Sucden Financial. A stronger greenback typically makes the dollar-denominated commodity more expensive in other currencies. U.S. oil prices wavered between gains and losses this week in light holiday trading. "With the volume being light, I think it's more noise than anything else," said Phil Flynn, analyst at the Price Futures Group. "If you step back and look at the big picture, the fundamentals are still very bearish." --- Josie Cox and Richard Silk contributed to this article. Credit: By Nicole Friedman and Georgi Kantchev
Subject: Crude oil; Commodity prices
Location: China United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Classification: 9190: United States; 9179: Asia & the Pacific; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 3, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641566518
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641566518?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced wi th permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Spells Boon for Most of Asia's Economies; No Country Is More Dependent on Crude Imports Than China
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2015: n/a.
Abstract:
According to officials at India's oil ministry, every dollar drop in oil prices helps reduce the government's burden of subsidy payments by $1 billion.
Full text: Tumbling oil prices could prove to be a boon for the many Asian economies that depend on crude imports. With oil at its lowest price in more than five years, governments in countries such as India and Indonesia can spend money on much-needed infrastructure and other growth projects without stoking inflation. Falling crude prices also give China's flagging economy a boost, allowing its central bank--and others in the region--to ease rates even as a recovering U.S. looks to do the reverse, economists say. Combined with loose monetary policy and a gradual recovery in global demand for goods and services, falling oil prices should help lift emerging Asia's gross-domestic-product growth this year to 4.7% from an estimated 4.3% in 2014, according to Capital Economics, a consulting firm. "The decline in oil prices really took people by surprise," said Cedric Chehab, head of research at Business Monitor International, a unit of Fitch Ratings. Sliding oil prices, he said, are "undoubtedly good for consumers, but the effect across Asia is going to be asymmetrical." Oil accounts for as much as 18% of total imports in Asia, excluding Japan, or about 3.4% of its total GDP, according to Bank of America Merrill Lynch. And oil makes up 18% of Japan's imports, or 3.3% of its GDP, according to Capital Economics. The decline in oil prices should boost GDP growth in the Asia-Pacific region by 0.25% to 0.5%, said Rajiv Biswas, Asia-Pacific chief economist at consulting firm IHS. That comes as slowing growth in China and Japan should be weighing on the region's economies. Of Asia's economies, none is more dependent on oil imports than China. The country spent $234.4 billion to import oil in 2013. That was just below the U.S., which was the world's top buyer of crude until it was surpassed by China in 2014, according to estimates from the U.S. Energy Information Administration. Analysts say that if oil prices were 20% lower this year on average than the roughly $100-a-barrel average in 2014, Chinese state coffers could see a $50 billion boost. "A 30% fall in oil prices will boost Chinese GDP by about 1% next year," said Julian Evans-Pritchard, China economist at Capital Economics. Brent crude has already fallen below $57 a barrel, down by half from its $115-a-barrel level in June, a drop accelerated by the U.S. shale boom and Saudi Arabia's refusal to cut output. The price of oil could average as low as $53 a barrel in 2015, according to Morgan Stanley, which would be a nearly 50% drop from the average 2014 levels. Toby Iles, a senior analyst at the Economist Intelligence Unit in Singapore, said the consultancy has raised its 2015 GDP growth forecast for China to 7.1% "on the back of the decline in oil prices." Some analysts say lower prices give China room to maneuver and maintain a GDP-growth target of at least 7% this year, down from a targeted 7.5% in 2014. Depressed oil prices could help China make up for some lost ground in its economy due to slowing industrial growth, falling exports, rising bad-debt levels and struggles in shifting to a consumption-led, rather than investment-led, growth model. If oil prices remain low, China could follow up its November interest-rate cut with another one this year, analysts say. While China stands to benefit, the real winners in the current oil plunge are India and Indonesia, both facing high current-account deficits, Mr. Chehab said. Both countries will be able to reduce relatively high interest rates without worrying about the impact on inflation, he said. India's Modi administration and Indonesia's Jokowi government have, since recently taking power, slashed most of the large fuel subsidies that have crippled policy making in the past. For the 12 months leading up to March, two months before Narendra Modi was elected prime minister, India had fuel subsidies of almost $22 billion for consumers, though much of that has gradually been cut, and the country is planning to deregulate fuel prices completely if oil continues its fall. According to officials at India's oil ministry, every dollar drop in oil prices helps reduce the government's burden of subsidy payments by $1 billion. Mr. Chehab said the cost of oil is one factor that will help India's GDP growth increase to around 6.3% next fiscal year from an estimated 5.6% for the year ended in March. Indonesia, meanwhile, scrapped gasoline subsidies completely on the last day of 2014, a month after raising subsidized fuel prices by about one-third. It has promised more reforms in fuel pricing, and a range of economic and administrative policies that could help lift GDP growth to 5.5% this year from an estimated 5.1% last year, Mr. Chehab said. Thailand, the Philippines, South Korea and Taiwan are Asia's other beneficiaries of falling oil prices. Mark Williams, chief economist at Capital Economics, said the consultancy has raised its GDP-growth forecasts for Taiwan and South Korea by half a percentage point each amid the decline in oil prices. In Japan, the case for benefiting from cheaper oil is less clear-cut. While dollar-denominated crude has been falling and helping imports, the yen has continued to decline, reducing the benefits. Japan is also struggling with deflation, which low oil prices don't alleviate. Still, lower energy prices could cut the nation's trade deficit by almost 2% of GDP in coming months, economists say. The exceptions to Asia-Pacific's oil-plunge windfall are the countries in the region that export oil: Malaysia, Mynamar, Brunei and Australia. Malaysia, Asia's biggest exporter of oil, could see oil-related revenue fall to 3.1% of GDP in 2015 from last year's 5.9%, according to Chua Hak Bin, a Singapore-based economist at Bank of America Merrill Lynch. Low oil prices are set to reduce Australia's petroleum resource rent tax by 760 million Australian dollars (US$615 million) over the next four years, according to a budget-document update three weeks ago. The Australian government said it doesn't expect a material rebound in oil prices over the next couple of years. Saurabh Chaturvedi in New Delhi, Jason Ng in Kuala Lumpur and Rhiannon Hoyle in Sydney contributed to this article. Credit: By Eric Yep
Subject: Petroleum industry; Subsidies; Consulting firms; Crude oil prices; Economic growth; Gross Domestic Product--GDP; Economists; Growth models
Location: Asia Japan United States--US India Indonesia China
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: Uni ted States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641760035
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641760035?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Diesel Prices Fall for Ninth Straight Week; Fuel Sinks as Crude Declines and Moderate Weather Cuts Heating-Oil Demand
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2015: n/a.
Abstract:
"If you get through the month of January without a prolonged cold spell--especially on the East Coast, where your heating-oil and diesel demand is--I think it's game over" for prices, said Rich Larkin, president of Hedge Solutions in Manchester, N.H., which helps fuel distributors in the Northeast manage their price risks.
Full text: Diesel prices in the U.S. declined for a ninth straight week, their longest losing streak on record, as continued moderate weather in the Northeast kept heating-oil demand subdued. Front-month futures for ultralow-sulfur diesel, which are also used as a proxy for heating oil, have dropped in recent months alongside plummeting crude-oil prices. Crude oil is refined into diesel, among other fuels. While diesel is mostly used as a transportation fuel, cold-weather demand for heating oil can cause diesel futures to spike in the winter. Prices rose 6.6% in January 2014 as frigid temperatures spread across much of the nation. This year, temperatures have been mild and refinery production is high. Consumers in the Northeast, where heating-oil use is most common, are already enjoying the lowest prices in four years. And diesel costs could fall further, analysts say, as a global oversupply of oil continues to weigh on crude prices. Diesel for February delivery fell 4.7% last week to end at $1.7957 a gallon Friday, the lowest closing price since Oct. 7, 2009. Prices have retreated 29% over the past nine weeks, the longest streak of down weeks ever, according to data going back to 1979. "If you get through the month of January without a prolonged cold spell--especially on the East Coast, where your heating-oil and diesel demand is--I think it's game over" for prices, said Rich Larkin, president of Hedge Solutions in Manchester, N.H., which helps fuel distributors in the Northeast manage their price risks. About 42% of the Northeast was covered in snow on Friday, according to the National Weather Service, compared with 86% on the same day a year ago. Heating-oil customers who started paying their heating bills in monthly installments last spring will likely see a big drop in their payments starting this month or next, Mr. Larkin said. Nationwide, the average residential heating-oil price fell 3.6 cents to $3.043 a gallon in the week ended Dec. 29, the lowest price since November 2010, according to the U.S. Energy Information Administration. The EIA expects households to spend an average of $1,722 on heating oil this winter, down 27% from last winter. U.S. production of distillate fuel oil, a category that includes diesel and heating oil, rose to an all-time high in the week ended Dec. 26, the EIA said. Refineries are churning out petroleum products at unusually high rates to take advantage of falling oil prices. Oil in the U.S. costs less than the global benchmark, so refiners can buy oil at a lower cost than overseas competitors and sell refined products at global prices. Companies that use diesel as a transportation fuel are also seeing lower costs. Melton Truck Lines in Tulsa, Okla., spends more than $150,000 a day on diesel fuel, down from about $200,000 a day in October, said Robert Ragan, Melton's chief financial officer. But the company passes along most of its savings in the form of lower fuel surcharges, he said. "Ultimately, it's beneficial to the shipper, because they're going to be paying us less," he said. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Diesel fuels; Cost control; Surcharges
Location: United States--US
Company / organization: Name: National Weather Service-US; NAICS: 924120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641762102
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641762102?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
A Shell for Fearful Oil Investors in 2015; Royal Dutch Shell's Solid Balance Sheet Should Protect Shareholder Payouts
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Jan 2015: n/a.
Abstract:
[...]when it reported third-quarter results, Shell highlighted that output would likely fall with new startups not quite offsetting disposals.
Full text: After a year like 2014, oil investors could be tempted to retreat into their shells. That, perhaps, isn't a bad place to be. With the oil price down 50% since June, Royal Dutch Shell offers a place to hide out. The major oil companies face a continuing struggle to cover capital expenditures and dividends with cash flow from operations as This comes as a blow to investors after years of burgeoning investment and rising costs outweighed the benefits of high oil prices. The sector should be seeing new projects starting up, helping to cushion the hit from cheaper oil. New barrels should be more profitable than the sector's existing business, notes Deutsche Bank. But pressure remains to cut spending and sell assets to make ends meet. Shell won't get much help from new projects in 2015. In fact, when it reported third-quarter results, Shell highlighted that output would likely fall with new startups not quite offsetting disposals. The company's biggest projects are scheduled to start producing from about 2017. But Shell does have other ways to respond to oil's tumble. Notably, while determined to keep investing through cyclical changes in oil prices, Shell still has room to cut. About 90% of near-term investment is committed. And exploration can be trimmed more easily, an area in which Shell spends substantially more than its peers. Sanford C. Bernstein notes that the European sector has a healthier book of proved reserves than when oil plummeted in 2009, meaning less pressure to keep drilling. With investors focused on the safety of their payouts, Shell's balance sheet is in good shape. At the end of the third quarter, the company's ratio of net debt to total capital was just 11%, compared with BP at 15% and Total at 21%. Shell's leverage could reach about 20% before credit-rating firms get nervous, the company says, implying $20 billion of additional net debt capacity, equivalent to two years of dividends. After oil's tumble, the trailing dividend yield of Europe's five biggest oil and gas companies has approached 20-year highs relative to that of the MSCI Europe index, notes Morgan Stanley. That indicates some nervousness about potential cuts to payouts. Shell's yield, at about 5.4%, is lower than for peers with more stretched finances, optically less attractive but signifying more fundamental support. It should maintain that advantage in 2015. Write to Helen Thomas at Credit: By Helen Thomas
Subject: Petroleum industry; Investments; Rating services; Capital expenditures; Natural gas utilities
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Deutsche Bank AG; NAICS: 522110, 551111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641768574
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641768574?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Diesel Prices Fall for Ninth Straight Week; Fuel Sinks as Crude Declines and Moderate Weather Cuts Heating-Oil Demand
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
"If you get through the month of January without a prolonged cold spell--especially on the East Coast, where your heating-oil and diesel demand is--I think it's game over" for prices, said Rich Larkin, president of Hedge Solutions in Manchester, N.H., which helps fuel distributors in the Northeast manage their price risks.
Full text: Diesel prices in the U.S. declined for a ninth straight week, their longest losing streak on record, as continued moderate weather in the Northeast kept heating-oil demand subdued. Front-month futures for ultralow-sulfur diesel, which are also used as a proxy for heating oil, have dropped in recent months alongside plummeting crude-oil prices. Crude oil is refined into diesel, among other fuels. While diesel is mostly used as a transportation fuel, cold-weather demand for heating oil can cause diesel futures to spike in the winter. Prices rose 6.6% in January 2014 as frigid temperatures spread across much of the nation. This year, temperatures have been mild and refinery production is high. Consumers in the Northeast, where heating-oil use is most common, are already enjoying the lowest prices in four years. And diesel costs could fall further, analysts say, as a global oversupply of oil continues to weigh on crude prices. Diesel for February delivery fell 4.7% last week to end at $1.7957 a gallon Friday, the lowest closing price since Oct. 7, 2009. Prices have retreated 29% over the past nine weeks, the longest streak of down weeks ever, according to data going back to 1979. "If you get through the month of January without a prolonged cold spell--especially on the East Coast, where your heating-oil and diesel demand is--I think it's game over" for prices, said Rich Larkin, president of Hedge Solutions in Manchester, N.H., which helps fuel distributors in the Northeast manage their price risks. About 42% of the Northeast was covered in snow on Friday, according to the National Weather Service, compared with 86% on the same day a year ago. Heating-oil customers who started paying their heating bills in monthly installments last spring will likely see a big drop in their payments starting this month or next, Mr. Larkin said. Nationwide, the average residential heating-oil price fell 3.6 cents to $3.043 a gallon in the week ended Dec. 29, the lowest price since November 2010, according to the U.S. Energy Information Administration. The EIA expects households to spend an average of $1,722 on heating oil this winter, down 27% from last winter. U.S. production of distillate fuel oil, a category that includes diesel and heating oil, rose to an all-time high in the week ended Dec. 26, the EIA said. Refineries are churning out petroleum products at unusually high rates to take advantage of falling oil prices. Oil in the U.S. costs less than the global benchmark, so refiners can buy oil at a lower cost than overseas competitors and sell refined products at global prices. Companies that use diesel as a transportation fuel are also seeing lower costs. Melton Truck Lines in Tulsa, Okla., spends more than $150,000 a day on diesel fuel, down from about $200,000 a day in October, said Robert Ragan, Melton's chief financial officer. But the company passes along most of its savings in the form of lower fuel surcharges, he said. "Ultimately, it's beneficial to the shipper, because they're going to be paying us less," he said. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Diesel fuels; Cost control; Surcharges
Location: United States--US
Company / organization: Name: National Weather Service-US; NAICS: 924120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641779486
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641779486?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Plunging Oil Prices Test Texas' Economic Boom; Downturn Has Many Wondering How Lone Star State Will Weather a Bust
Author: Hilsenrath, Jon; Campoy, Ana; Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
"Is Texas indeed as diversified as people like me say it is?" Analysts at the Federal Reserve Bank of Dallas estimate that a 45% decline in the price of oil--from $100 a barrel to near $55--will reduce Texas payrolls by 125,000, all else being equal.
Full text: Retired Southwest Airlines co-founder Herb Kelleher remembers a Texas bumper sticker from the late 1980s, when falling energy prices triggered an ugly regional downturn: "Dear Lord, give me another boom and I promise I won't screw it up." Texas got its wish with another energy-driven boom, and now plunging oil prices are testing whether the state has held up its end of the bargain. The Lone Star State's economy has been a national growth engine since the recession ended, expanding at a rate of 4.4% annually between 2009 and 2013, twice the pace of the U.S. as a whole. The downturn in energy prices now has triggered a debate over whether Texas simply got lucky in recent years, thanks to a hydraulic-fracturing oil-and-gas boom, or whether it hit on an economic playbook that other states, and the country as a whole, could emulate. One in seven jobs created nationally during the 50-month expansion has been created in Texas, where the unemployment rate, at 4.9%, is nearly a percentage point lower than the national average. But a big dose of the state's good fortune comes from the oil-and-gas sector. Midland, which sits atop the oil-rich Permian Basin, had the fastest weekly wage growth in the country among large counties: 9% in the 12 months ending June 2014. Now that oil prices have plunged nearly 51% from their June peak to $52.69 a barrel, some Texans sobered by memories of past energy busts are bracing for a fall. The argument among economists and business leaders isn't whether the state will be hurt, but how badly. Mr. Kelleher is among the Texans predicting this won't be a replay of the 1980s oil bust and banking crisis, which drove the state unemployment rate to 9.3%. As evidence, he and others cite a more cautious banking sector, a tax and regulatory environment favorable to business, and a state economy less dependent on energy and other resources. "Texas has become a well-rounded state," Mr. Kelleher said. "People did remember not to overextend themselves." Michael Feroli, a New York-based economist at J.P. Morgan Chase & Co., is one of the skeptics of the "this-time-is-different" camp. Although the oil-and-gas industry today makes up a smaller share of Texas' workforce than it did in the mid-1980s, it accounts for roughly the same share of its economic output, he said. So a decline in oil prices similar to the plunge of more than 50% seen in the mid-1980s, he said, could have a similar result: recession. "Texas is, if oil prices stay where they are, going to face a more difficult economic reality," Mr. Feroli said. Oil-exploration companies already are scaling back drilling plans for next year. Oil-field-service companies that provide labor and machinery, such as Halliburton Co. and Schlumberger Ltd., are laying off workers. The number of oil and gas rigs in Texas, which had grown 80% since the start of 2010, has been dropping over the past few weeks. The rig count in the state stood at 851 at the end of December, down from 905 in mid-November, according to oil-field-services firm Baker Hughes Inc., which compiles the data. Meanwhile, yields on junk bonds tied to energy companies have soared as investors brace for financial fallout from the oil-price bust. Yet Dallas Fed President Richard Fisher likens the J.P. Morgan report to bull droppings. He noted that sectors including trade and transportation, leisure and hospitality, education and construction all have produced more new jobs in recent years than energy. Houston has experienced fast growth in the medical sector, Austin in technology. "This is a test," Mr. Fisher said. "Is Texas indeed as diversified as people like me say it is?" Analysts at the Federal Reserve Bank of Dallas estimate that a 45% decline in the price of oil--from $100 a barrel to near $55--will reduce Texas payrolls by 125,000, all else being equal. Payrolls were up 447,900 in November from a year earlier, or 3.9%. The Dallas Fed estimate implies growth of more than 300,000, or nearly 3%, even with a lower oil price, still faster than the national average of 2%. Pia Orrenius, a Dallas Fed regional economist, sees the price bust washing through the Texas economy in both positive and negative ways. It could help the booming petrochemicals sector and manufacturing by lowering costs. A construction boom centered on petrochemical plants is already under way along the Gulf Coast, a source of blue-collar jobs. Yet the price bust will hurt sectors like construction, transportation and business services that have expanded to serve the oil industry, and consumer spending more broadly as workers lose their jobs. "We will see significant spillovers," Ms. Orrenius said. Nowhere is the evolution of the Texas economy more apparent than in Houston, the nation's fourth-largest city, with 2.2 million people. After oil-and-gas prices crashed in the mid-1980s, energy companies in the city laid off thousands of petroleum engineers and other well-paid industry workers, and the real-estate market crumbled, helping trigger a regional-banking collapse. One in six homes and apartments in Houston stood vacant at the beginning of 1987, and the county tax rolls dropped by $8 billion, according to a history of the bust by the Federal Deposit Insurance Corp. That prompted civic leaders to push for an expanded medical sector and more diversified economy. Today, the Texas Medical Center is the world's largest medical complex, with more than 20 hospitals, three medical schools and six nursing schools, employing 106,000 people. Health-care and social-services companies made up 10.4% of jobs in the greater Houston area in 2013, compared with 5.9% in 1985, according to Labor Department data. Roughly 4.3% of jobs in the county were in the oil-and-gas industry last year, down from 5.9% in 1985. Still, most of the 26 Fortune 500 companies based in Houston are in energy, including Phillips 66, Halliburton and Anadarko Petroleum Corp., and energy employees flush with cash recently spurred a run-up in real-estate prices in the region that has raised red flags among some economists. Fitch Ratings recently declared that Houston home prices were the second-most overvalued in the country, behind Austin, when compared with historical averages, and that current prices may be unsustainable, citing the current oil-price drop. The energy boom has strengthened the state's budget. Revenues are expected to take a hit with falling levies on oil and natural gas production, but less than previously. The levies accounted for 9.4% of state tax revenue in 2013 compared with 20.2% in 1985, according to data from the Texas state comptroller's office. Texas banks also appear to be in better shape to handle a shock than they were in the 1980s. Between 1986 and 1990, more than 700 Texas banks and thrifts failed. During the worst of the last financial crisis in 2008 and 2009, seven Texas banks failed, according to the FDIC. Fewer than 1% of state banks have high measures of nonperforming loans now, compared with 20% in the late 1980s, according to the Dallas Fed. Texas is the only state that limits home-equity borrowing to 80% of a home's value, a provision enshrined in its state constitution. The rule helped keep Texas homeowners from piling up debt against their homes during the national real-estate boom of the 2000s. Only 10% of nonprime mortgages were underwater in 2011 in Texas, compared with 54% in the rest of the U.S., according to the Dallas Fed. "Even though we saw our banking brethren in other states doing these crazy deals, we refused to do so because we remembered the '80s," said Pat Hickman, chief executive of Happy State Bank, a community bank in the Texas Panhandle. "We learned lessons." Texas has something else going for it: A bounty of resources other than oil and natural gas, most notably, land and people. The state's population grew 29% between 2000 and 2014, more than twice as fast as the U.S. as a whole, according to the Census Bureau. The median age in Texas was 34 last year, 3 1/2 years younger than the nation overall. Growth has come from a combination of migration from other states, immigration and a higher birthrate than the national average. The U.S. economy has been restrained in recent years by slow labor-force growth. Texas, on the other hand, has more young people entering their prime working years and fewer elderly residents, as a percentage of the population, than does the nation overall. That has given its economy a solid foundation of available workers. Workforce and land were two factors that drew Firefly Space Systems, a manufacturer of low-orbit rockets, to the Austin area earlier this year. The firm needed a place to launch test rockets and chose Texas over Los Angeles for an expansion. It found a supply of tech-savvy workers in the Austin area and plentiful land. "It was the geography, and it was making sure our employees were comfortable there," said Maureen Gannon, the firm's vice president for business development. The firm plans to hire 200 people in coming years. Write to Jon Hilsenrath at , Ana Campoy at and Ben Leubsdorf at Credit: By Jon Hilsenrath, Ana Campoy and Ben Leubsdorf
Subject: Economic conditions; Recessions; Petroleum industry; Prices; Junk bonds
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641799990
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641799990?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Extends Selloff on Supply Glut, Cuts in Price Forecasts; Global Supply Glut Continues to Weigh on Prices
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract: None available.
Full text: Oil slid further in Asian trade Monday on concerns that the glut in global oil supply will extend well into this year, and after major brokerages including Citigroup slashed their oil price forecasts for 2015 and 2016. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $51.68 a barrel at 0353 GMT, down $1.01 in the Globex electronic session. On Friday, Nymex crude had settled at its lowest since April 30, 2009. Brent crude for February delivery on London's ICE Futures exchange fell $0.94 to $55.48 a barrel. Last week it hit its lowest settle value since May 15, 2009. Both oil benchmarks have been down for six consecutive weeks and on Monday extended losses to trade at their lowest in more than 5½ years. "Three massive factors have come to a head as 2015 opens: the U.S. shale revolution, the Saudi refusal to cede market share to other producers and a weak world economy," said Edward Morse, head of commodities research at Citigroup. Citigroup has lowered its average Brent crude oil forecast for 2015 to $63 a barrel from $80 a barrel, and its average Nymex crude oil forecast for 2015 to $55 a barrel from $72 a barrel, Mr. Morse said in a report titled "Oil and Trouble Ahead in 2015." He said there is significant market weakness in the second quarter before a recovery and a lurking possibility that Brent will price at an even lower $55 a barrel, with a trading range of $55-$70 a barrel. Oil prices have been particularly volatile over the last few days as volumes were thin due to the holiday season. But oil markets were also pressured by bearish news reports including weak manufacturing data from China and disappointing economic data from the U.S. Rising U.S. oil inventories at a time of strong winter demand, and reports that Russian oil output has hit post-Soviet records while Iraqi oil exports are at their highest since the 1980s have further weighed on oil prices since last week. "Although this year will be the most challenging for the industry in a generation, we believe that there will be a recovery in oil prices later in 2015," Neil Beveridge, senior analyst at Bernstein Research said. Bernstein has also lowered its Brent crude-oil price forecasts to $80 a barrel for 2015 from $100 a barrel and to $90 a barrel for 2016 from $109 a barrel, but says it still believes that oil prices will return to triple digits by 2017 as U.S. shale growth wanes. Later this week, markets will be focused on U.S. nonfarm payrolls data. Singapore-based Phillip Futures said it is bullish on the U.S. economy and stronger-than-expected jobs data is likely to boost the greenback and put further downward pressure on oil prices. Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--fell 165 points to $1.4169 a gallon, while February diesel traded at $1.7793, 164 points lower. ICE gasoil for January changed hands at $511.00 a metric ton, down $8.25 from Friday's settlement. Write to Eric Yep at Credit: By Eric Yep
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641804186
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641804186?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheap Oil Is Ticket for Asia --- The Region's Countries Can Spend on Growth Projects Without Stoking Inflation
Author: Yep, Eric
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Jan 2015: C.3.
Abstract:
According to officials at India's oil ministry, every $1 drop in oil prices helps reduce the government's burden of subsidy payments by $1 billion.
Full text: Tumbling oil prices could prove to be a boon for the many Asian economies that depend on crude imports. With oil at its lowest price in more than five years, governments in countries such as India and Indonesia can spend money on much-needed infrastructure and other growth projects without stoking inflation. Falling crude prices also give China's flagging economy a boost, allowing its central bank -- and others in the region -- to ease rates even as a recovering U.S. looks to do the reverse, economists say. Combined with loose monetary policy and a gradual recovery in global demand for goods and services, falling oil prices should help lift emerging Asia's gross-domestic-product growth this year to 4.7% from an estimated 4.3% in 2014, says consulting firm Capital Economics. "The decline in oil prices really took people by surprise," said Cedric Chehab, head of research at Business Monitor International, a unit of Fitch Ratings. Sliding oil prices, he said, are "undoubtedly good for consumers, but the effect across Asia is going to be asymmetrical." Oil accounts for as much as 18% of total imports in Asia, excluding Japan, or about 3.4% of its total GDP, according to Bank of America Merrill Lynch. And oil makes up 18% of Japan's imports, or 3.3% of its GDP, according to Capital Economics. The decline in oil prices should boost GDP growth in the Asia-Pacific region by 0.25% to 0.5%, said Rajiv Biswas, Asia-Pacific chief economist at consulting firm IHS. That comes as slowing growth in China and Japan should be weighing on the region's economies. Of Asia's economies, none is more dependent on oil imports than China. The country spent $234.4 billion to import oil in 2013. That was just below the U.S., which was the world's top buyer of crude until it was surpassed by China in 2014, according to estimates from the Energy Information Administration. Analysts say that if oil prices are 20% lower this year on average than the roughly $100-a-barrel average in 2014, Chinese state coffers could see a $50 billion boost. "A 30% fall in oil prices will boost Chinese GDP by about 1% next year," said Julian Evans-Pritchard, China economist at Capital Economics. Brent crude has already fallen below $57 a barrel, down by half from its $115-a-barrel level in June, a drop accelerated by the U.S. shale boom and Saudi Arabia's refusal to cut output. The price of oil could average as low as $53 a barrel in 2015, according to Morgan Stanley, which would be nearly a 50% drop from the 2014 average levels. Toby Iles, a senior analyst at the Economist Intelligence Unit in Singapore, said the consultancy has raised its 2015 GDP growth forecast for China to 7.1% "on the back of the decline in oil prices." Some analysts say lower prices give China room to maneuver and maintain a GDP-growth target of at least 7% this year, down from a targeted 7.5% in 2014. Depressed oil prices could help China make up for some lost ground in its economy due to slowing industrial growth, falling exports, rising bad-debt levels and struggles in shifting to a consumption-led, rather than investment-led, growth model. If oil prices remain low, China could follow up its November interest-rate cut with another one this year, analysts say. While China stands to benefit, the real winners in the current oil plunge are India and Indonesia, both facing high current-account deficits, Mr. Chehab said. Both countries will be able to reduce relatively high interest rates without worrying about the impact on inflation, he said. India's Modi administration and Indonesia's Jokowi government have, since recently taking power, slashed most of the large fuel subsidies that have crippled policy-making in the past. For the 12 months leading up to March, two months before Narendra Modi was elected prime minister, India had fuel subsidies of almost $22 billion for consumers, though much of that has gradually been cut, and the country is planning to deregulate fuel prices completely if oil continues its fall. According to officials at India's oil ministry, every $1 drop in oil prices helps reduce the government's burden of subsidy payments by $1 billion. Mr. Chehab said the cost of oil is one factor that will help India's GDP growth increase to around 6.3% next fiscal year from an estimated 5.6% for the year ended in March. Meanwhile, Indonesia scrapped gasoline subsidies completely on the last day of 2014, a month after raising subsidized fuel prices by about one-third. It has promised more reforms in fuel pricing, and a range of economic and administrative policies that could help lift GDP growth to 5.5% this year from an estimated 5.1% last year, Mr. Chehab said. Thailand, the Philippines, South Korea and Taiwan are Asia's other beneficiaries of falling oil prices. Mark Williams, chief economist at Capital Economics, said the consultancy has raised its GDP-growth forecasts for Taiwan and South Korea by half a percentage point each amid the decline in oil prices. --- Saurabh Chaturvedi, Jason Ng and Rhiannon Hoyle contributed to this article. Credit: By Eric Yep
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 8510: Petroleum industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2015
Publication date: Jan 5, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641808060
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641808060?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
'This is a Test': Plunging Oil Prices Challenge Texas' Economic Boom
Author: Hilsenrath, Jon; Campoy, Ana; Leubsdorf, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Jan 2015: A.1.
Abstract:
"Is Texas indeed as diversified as people like me say it is?" Analysts at the Federal Reserve Bank of Dallas estimate that a 45% decline in the price of oil -- from $100 a barrel to near $55 -- will reduce Texas payrolls by 125,000, all else being equal.
Full text: Corrections & Amplifications Firefly Space Systems expanded to the Austin area last year. A Page One article Monday about the Texas economy incorrectly said it happened earlier this year. (WSJ Jan. 6, 2015) Retired Southwest Airlines co-founder Herb Kelleher remembers a Texas bumper sticker from the late 1980s, when falling energy prices triggered an ugly regional downturn: "Dear Lord, give me another boom and I promise I won't screw it up." Texas got its wish with another energy-driven boom, and now plunging oil prices are testing whether the state has held up its end of the bargain. The Lone Star State's economy has been a national growth engine since the recession ended, expanding at a rate of 4.4% annually between 2009 and 2013, twice the pace of the U.S. as a whole. The downturn in energy prices now has triggered a debate over whether Texas simply got lucky in recent years, thanks to a hydraulic-fracturing oil-and-gas boom, or whether it hit on an economic playbook that other states, and the country as a whole, could emulate. One in seven jobs created nationally during the 50-month expansion has been created in Texas, where the unemployment rate, at 4.9%, is nearly a percentage point lower than the national average. But a big dose of the state's good fortune comes from the oil-and-gas sector. Midland, which sits atop the oil-rich Permian Basin, had the fastest weekly wage growth in the country among large counties: 9% in the 12 months ending June 2014. Now that oil prices have plunged nearly 51% from their June peak to $52.69 a barrel, some Texans sobered by memories of past energy busts are bracing for a fall. The argument among economists and business leaders isn't whether the state will be hurt, but how badly. Mr. Kelleher is among the Texans predicting this won't be a replay of the 1980s oil bust and banking crisis, which drove the state unemployment rate to 9.3%. As evidence, he and others cite a more cautious banking sector, a tax and regulatory environment favorable to business, and a state economy less dependent on energy and other resources. "Texas has become a well-rounded state," Mr. Kelleher said. "People did remember not to overextend themselves." Michael Feroli, a New York-based economist at J.P. Morgan Chase & Co., is one of the skeptics of the "this-time-is-different" camp. Although the oil-and-gas industry today makes up a smaller share of Texas' workforce than it did in the mid-1980s, it accounts for roughly the same share of its economic output, he said. So a decline in oil prices similar to the plunge of more than 50% seen in the mid-1980s, he said, could have a similar result: recession. "Texas is, if oil prices stay where they are, going to face a more difficult economic reality," Mr. Feroli said. Oil-exploration companies already are scaling back drilling plans for next year. Oil-field-service companies that provide labor and machinery, such as Halliburton Co. and Schlumberger Ltd., are laying off workers. The number of oil and gas rigs in Texas, which had grown 80% since the start of 2010, has been dropping over the past few weeks. The rig count in the state stood at 851 at the end of December, down from 905 in mid-November, according to oil-field-services firm Baker Hughes Inc., which compiles the data. Meanwhile, yields on junk bonds tied to energy companies have soared as investors brace for financial fallout from the oil-price bust. Yet Dallas Fed President Richard Fisher likens the J.P. Morgan report to bull droppings. He noted that sectors including trade and transportation, leisure and hospitality, education and construction all have produced more new jobs in recent years than energy. Houston has experienced fast growth in the medical sector, Austin in technology. "This is a test," Mr. Fisher said. "Is Texas indeed as diversified as people like me say it is?" Analysts at the Federal Reserve Bank of Dallas estimate that a 45% decline in the price of oil -- from $100 a barrel to near $55 -- will reduce Texas payrolls by 125,000, all else being equal. Payrolls were up 447,900 in November from a year earlier, or 3.9%. The Dallas Fed estimate implies growth of more than 300,000, or nearly 3%, even with a lower oil price, still faster than the national average of 2%. Pia Orrenius, a Dallas Fed regional economist, sees the price bust washing through the Texas economy in both positive and negative ways. It could help the booming petrochemicals sector and manufacturing by lowering costs. A construction boom centered on petrochemical plants is already under way along the Gulf Coast, a source of blue-collar jobs. Yet the price bust will hurt sectors like construction, transportation and business services that have expanded to serve the oil industry, and consumer spending more broadly as workers lose their jobs. "We will see significant spillovers," Ms. Orrenius said. Nowhere is the evolution of the Texas economy more apparent than in Houston, the nation's fourth-largest city, with 2.2 million people. After oil-and-gas prices crashed in the mid-1980s, energy companies in the city laid off thousands of petroleum engineers and other well-paid industry workers, and the real-estate market crumbled, helping trigger a regional-banking collapse. One in six homes and apartments in Houston stood vacant at the beginning of 1987, and the county tax rolls dropped by $8 billion, according to a history of the bust by the Federal Deposit Insurance Corp. That prompted civic leaders to push for an expanded medical sector and more diversified economy. Today, the Texas Medical Center is the world's largest medical complex, with more than 20 hospitals, three medical schools and six nursing schools, employing 106,000 people. Health-care and social-services companies made up 10.4% of jobs in the greater Houston area in 2013, compared with 5.9% in 1985, according to Labor Department data. Roughly 4.3% of jobs in the county were in the oil-and-gas industry last year, down from 5.9% in 1985. Still, most of the 26 Fortune 500 companies based in Houston are in energy, including Phillips 66, Halliburton and Anadarko Petroleum Corp., and energy employees flush with cash recently spurred a run-up in real-estate prices in the region that has raised red flags among some economists. Fitch Ratings recently declared that Houston home prices were the second-most overvalued in the country, behind Austin, when compared with historical averages, and that current prices may be unsustainable, citing the current oil-price drop. The energy boom has strengthened the state's budget. Revenues are expected to take a hit with falling levies on oil and natural gas production, but less than previously. The levies accounted for 9.4% of state tax revenue in 2013 compared with 20.2% in 1985, according to data from the Texas state comptroller's office. Texas banks also appear to be in better shape to handle a shock than they were in the 1980s. Between 1986 and 1990, more than 700 Texas banks and thrifts failed. During the worst of the last financial crisis in 2008 and 2009, seven Texas banks failed, according to the FDIC. Fewer than 1% of state banks have high measures of nonperforming loans now, compared with 20% in the late 1980s, according to the Dallas Fed. Texas is the only state that limits home-equity borrowing to 80% of a home's value, a provision enshrined in its state constitution. The rule helped keep Texas homeowners from piling up debt against their homes during the national real-estate boom of the 2000s. Only 10% of nonprime mortgages were underwater in 2011 in Texas, compared with 54% in the rest of the U.S., according to the Dallas Fed. "Even though we saw our banking brethren in other states doing these crazy deals, we refused to do so because we remembered the '80s," said Pat Hickman, chief executive of Happy State Bank, a community bank in the Texas Panhandle. "We learned lessons." Texas has something else going for it: A bounty of resources other than oil and natural gas, most notably, land and people. The state's population grew 29% between 2000 and 2014, more than twice as fast as the U.S. as a whole, according to the Census Bureau. The median age in Texas was 34 last year, 3 1/2 years younger than the nation overall. Growth has come from a combination of migration from other states, immigration and a higher birthrate than the national average. The U.S. economy has been restrained in recent years by slow labor-force growth. Texas, on the other hand, has more young people entering their prime working years and fewer elderly residents, as a percentage of the population, than does the nation overall. That has given its economy a solid foundation of available workers. Workforce and land were two factors that drew Firefly Space Systems, a manufacturer of low-orbit rockets, to the Austin earlier this year. The firm needed a place to launch test rockets and chose Texas over Los Angeles for an expansion. It found a supply of tech-savvy workers in the Austin area and plentiful land. "It was the geography, and it was making sure our employees were comfortable there," said Maureen Gannon, the firm's vice president for business development. The firm plans to hire 200 people in coming years.
Credit: By Jon Hilsenrath, Ana Campoy and Ben Leubsdorf
Subject: Economic conditions -- Texas; Petroleum industry; Crude oil prices
Location: Texas
Classification: 1110: Economic conditions & forecasts; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 5, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641810160
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641810160?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-24
Database: The Wall Street Journal
Oil Prices Tumble to Fresh Lows; Ample Supplies, Tepid Demand Have Prompted Plunge in Oil Prices
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--fell 0.3%points to $1.4169 a gallon, while ICE gas oil for January changed hands at $513 a metric ton, down $6.25 from Friday's settlement.
Full text: Oil's selloff accelerated on Monday, with U.S. prices falling briefly below $50 a barrel for the first time since April 2009, on signs that supply will outstrip demand in coming months. Ample oil production, particularly in the U.S., and tepid demand growth have sent crude oil prices plunging in recent months. Consumers are reaping the benefits, while oil-exporting nations are struggling to balance their fiscal budgets and . Production has showed no sign of slowing despite spending cutbacks by many oil companies. Prices slid Friday on reports that Russian oil output hit post-Soviet records and Iraqi oil exports were at their highest since the 1980s. A number of U.S. producers have already responded to low prices by cutting their 2015 spending, but it could take months for supply growth to slow enough to reduce the global glut of oil, analysts say. Monday's decline, along with a drop in the euro amid concerns about Greece's political stability, rattled broader financial markets, with global stocks tumbling and investors rushing to the safety of gold, U.S. Treasurys and other sovereign bonds. Light, sweet oil for February delivery settled down $2.65, or 5%, at $50.04 a barrel on the New York Mercantile Exchange, after trading as low as $49.92 a barrel in intraday trading. Prices settled at the lowest level since April 28, 2009. Brent crude, the international benchmark, slid $3.31, or 5.9%, to $53.11, the lowest level since May 1, 2009. During the global recession in 2009, both U.S. and Brent prices dropped below $40 a barrel as global demand shrank. The recent price slide is different, analysts say, because it is more driven by unexpected supply growth than by plunging demand. Monday's declines took both oil benchmarks below psychologically important levels for many traders. Some analysts and investors have predicted that prices will level off above $50 a barrel, following a nearly 50% slide last year. But a persistent glut in the global market is fueling further declines in the new year. "We were eyeballing $50, low $50s, as a potential area where things would stabilize," said Lee Kayser, portfolio manager at Russell Investments in Seattle, which manages about $275 billion, including $1.4 billion invested in commodities. Mr. Kayser's funds have reduced their exposure to oil in the last six weeks, he said. Many estimates released last autumn said a lot of U.S. shale-oil drilling would become unprofitable around $60 a barrel, Mr. Kayser noted. "We're certainly in new territory here," he said. Saudi Arabia added to the downward pressure Monday by cutting February prices for its crude oil in the U.S., while raising them in Asia. Saudi price cuts to the U.S. in recent months have weighed on futures markets. Saudi Arabia is the biggest exporter in the Organization of the Petroleum Exporting Countries, which has declined to cut production in recent months as prices have dropped. Shares of energy companies in the S&P 500 tumbled alongside oil prices Monday, pushing down U.S. stock indexes. "When it rains, it pours," said Chip Hodge, senior managing director at John Hancock Financial Services, who helps oversee about $7 billion in energy-related investments. "It just seems that you get bad news on top of bad news" for oil prices, he said. Hedge funds and other money managers added bets that Nymex oil prices would fall and closed wagers on rising prices in the week ended Dec. 30, according to the most recent data from the U.S. Commodity Futures Trading Commission. Their aggregate position on rising oil prices fell to a three-week low. On Sunday, Citigroup lowered its Brent forecast for 2015 to $63 from $80 a barrel, and its projection for the U.S. benchmark to $55 from $72 a barrel. Oil traders are using options to benefit from dramatic price moves, including a potential drop to $25 a barrel, said Ray Carbone, president of Paramount Options and a Nymex floor trader. "It's certainly a different world," he said. "We're quoting [prices] that, really, we haven't seen for a long time, since 2008-2009." Ecuador, the smallest OPEC member, cut its 2015 fiscal budget by about 4% to $34.9 billion on Monday, due to falling oil prices. The budget assumes an average oil price of $79.70 a barrel this year. The strength of the dollar, now at multiyear highs against other major currencies, also exacerbated the slump in oil. Oil is traded in dollars, so a strong dollar makes oil more expensive for foreign buyers. In the U.S., the national average price of retail gasoline was $2.20 a gallon Monday, according to AAA, and 40 states had at least one station selling gas for less than $2 a gallon. Georgi Kantchev and Benoît Faucon in London, and Mercedes Alvaro in Quito contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil; Crude oil prices
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641819140
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641819140?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
European Stocks Fall Sharply; Oil's Relentless Slide and Political Uncertainty in Greece Burden Markets
Author: Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
European stocks fluctuated on Monday, buoyed by optimism stemming from the prospect of more stimulus from the European Central Bank but kept in check by fears about political uncertainty in Greece and the relentless slide in the price of oil.
Full text: European stocks plummeted on the first Monday of 2015, burdened by oil's relentless slide coupled with political uncertainty in Greece. Across the region, almost all indexes ended the session sharply lower, with southern European stocks suffering a particularly intense beating. Greece's Athex composite closed 5.6% lower, taking losses over the last three months to almost 25% and making it the worst-performing index across the region, aside from Moscow's U.S. dollar-denominated RTS. Germany's DAX and France's CAC lost 3% and 3.3%, respectively, while Italy's MIB dropped 4.9% and Spain's IBEX 3.5%. Investors and analysts pinned the selloff in part on fears that an antiausterity party could assume power in later this month--a bout of nerves that has also . The plummeting price of oil, though, is also biting, they said, with this sharp fall suggesting sluggish global demand on top of increased supply. Gary Jenkins, chief credit strategist at London-based asset manager LNG Capital, said that "yet again Greece threatens to upset the European apple cart." Last week, a third and final parliamentary vote failed to elect a new Greek president, triggering a snap general election scheduled for Jan. 25. Greece's radical left opposition Syriza party, which has threatened to tear up the economic overhaul and austerity program that has accompanied the country's international bailout, is and even though its lead has narrowed in recent days, several economists say that there is a greater than 50% probability that the party will win the election. William Davies, head of global equities at Threadneedle Investments, said that if Greece were to leave the euro, "contagion will be feared, the volatility of a currency under threat will resurface, and we revisit the throes of the euro crisis we endured a few years back." He added that Greece exiting the euro isn't the most likely outcome, but it is "certainly a distinct possibility." Threadneedle is the international investment management arm of Ameriprise Financial, which has around $797 billion of assets under management. Fears about the fallout from the election were also exacerbated on Saturday when German magazine Der Spiegel published an article citing unnamed government sources as saying that the German government may be comfortable with allowing Greece to leave the eurozone if necessary. The German government shrugged off the report Monday, with Chancellor Angela Merkel's spokesman Steffen Seibert telling a news conference it hadn't changed its position on Greece, but that did little to pacify markets. "If Germany forces Greece out of the eurozone, then it will become very clear to Italy, Spain and Portugal that voting for euroskeptic parties will carry a cost," said Charlie Robertson, global chief economist at Renaissance Capital, adding however, that if Germany caves into Syriza, "it will encourage moral hazard as Italians, Spanish, Portuguese or French voters may then vote for populist parties who expect debt forgiveness too." Beyond Greece, the tumbling price of oil also exerted pressure on stocks. Brent crude, the value of which has fallen around 50% over the past year, was down more than 6% in late European trade at below $53 per barrel--a more than 5½-year low. Nick Lawson, a senior trader at Deutsche Bank, said that the price could now "easily fall below $40." London's FTSE 100, with a large contingent of oil and gas stocks, lost 2% Monday, taking its one-month loss to almost 5%. Biggest losers on the index included Weir Group PLC, Tullow Oil PLC, BG Group PLC and BP PLC. The global oil glut has been fueled by a booming shale industry in the U.S., and the decision by the Organization of the Petroleum Exporting Countries in late November to leave output quotas unchanged. In 2014, Brent crude recorded its since 2008. --Chiara Albanese contributed to this article. Write to Josie Cox at Credit: By Josie Cox
Subject: Petroleum industry; International finance; Energy economics; Sovereign debt
Location: Germany Netherlands Switzerland United States--US Greece France
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Der Spiegel; NAICS: 511120; Name: Tullow Oil PLC; NAICS: 211111; Name: BG Group PLC; NAICS: 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164 1819141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641819141?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Ruble Falls on First Trading Day of 2015; Currency Hit in Thin Holiday Trade as Oil Prices Plunge to Lowest Level Since 2009
Author: Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
[...]trade on both the stock exchange and foreign-exchange market is very thin as many banks and brokerages are closed for the whole week.
Full text: MOSCOW--The ruble weakened on its first trading day in 2015, as the price of oil, Russia's main source of hard currency, The battered currency, against the dollar in 2014, was down 6.1% around midsession on Monday, with one dollar buying 59.44 rubles. On the first trading day of 2014, the rate was 32.03 rubles per dollar. Russia's dollar-denominated RTS index was down 4.1%, while its ruble-denominated peer Mices was up 2.2%. In dollar terms, Russia's stock market index has nearly halved since the start of 2014. Although New Year and Christmas holidays are under way in Russia until next Monday, Jan. 12, the Moscow Stock Exchange is closed only Wednesday for Christmas day in the Orthodox church. However, trade on both the stock exchange and foreign-exchange market is very thin as many banks and brokerages are closed for the whole week. Ruble and stocks remain under pressure from falling oil prices and Western for its meddling in Ukraine. Russia's economy is since 2009, while its sovereign rating is just a notch above junk. "We want to see the fallout from the likely loss of S&P investment grade in the first quarter and some stability in oil, before turning more positive", said Bank of America/ Merill Lynch, adding that the European Union's sanctions review in March may provide some respite to the market. However, Eurasia Group expects Russia's standoff with the West to escalate, rather than ease in 2015. "Europe and the U.S. will increasingly treat Russia as a pariah state," the risk research firm said, naming Russia one of the top risks of the year. Moscow's "geopolitical ambitions are rising precisely at the moment that its economic fortunes are declining" it added. Credit: By Alexander Kolyandr
Subject: Stock exchanges; Bond issues
Location: Russia
Company / organization: Name: Bank of America Corp; NAICS: 522110, 551111; Name: Moscow Stock Exchange; NAICS: 523210; Name: Eurasia Group; NAICS: 523930; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641860342
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641860342?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduce d with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Tumble Along With Oil Prices; Dow Drops More Than 300 Points, Posting Biggest Loss Since October
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
Though it has led to lower gasoline prices and boosted the fortunes of consumers, it has dented the broader stock market by curbing profits within the once-booming energy sector, which makes up a growing piece of the U.S. economy amid resurgent domestic oil production. Almost a quarter of the Dow's decline was due to selling in shares of Chevron Corp., Exxon Mobil Corp. and Caterpillar Inc. Caterpillar, the heavy equipment manufacturer and economic bellwether, posted the biggest loss in the blue-chip index.
Full text: The Dow industrials tumbled more than 300 points Monday, kicking off the new year on a sour note as a renewed slide in oil prices sent energy shares sharply lower. The Dow Jones Industrial Average sank 331.34 points, or 1.9%, to 17501.65, the biggest one-day loss for the blue chips since early October. The S&P 500 index shed 37.62 points, or 1.8%, to 2020.58, also its worst showing in three months. The Nasdaq Composite Index declined 74.24 points, or 1.6%, to 4652.57. The declines were market-wide, beginning at the opening bell and gaining force throughout the session as . Beleaguered shares of energy companies led the push lower after U.S.-traded crude oil fell below $50 a barrel for the first time in nearly six years. Energy shares in the S&P 500 dropped 4%. "It seems like everyone is taking a step back instead of running into the new year," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. "There hasn't been a real buying-on-the-dip mentality today." The decline in oil prices has proved a mixed blessing for stocks in recent months. Though it has led to lower gasoline prices and boosted the fortunes of consumers, it has dented the broader stock market by curbing profits within the once-booming energy sector, which makes up a growing piece of the U.S. economy amid resurgent domestic oil production. "Oil is first and foremost on everybody's mind," said Jesse Lubarsky, senior vice president and equity trader at Raymond James in New York. "People are thinking if it's going to $40, where does that leave the economy?" Despite Monday's rout, Wall Street trading desks said activity was relatively light given the scale of the move lower. Rather than sell en masse, many investors were simply starting the new year with a more cautious posture following last year's brisk gains. Mr. Lubarsky described the stock selloff as "orderly," with investors recalibrating portfolios as the new year gets under way. "It's not like we're seeing massive selling coming through," he said. "People are turning on the engines and starting to figure out where we're headed for the next couple of months." The heaviest losses were concentrated in corners of the market tied to the energy sector. Almost a quarter of the Dow's decline was due to selling in shares of Chevron Corp., Exxon Mobil Corp. and Caterpillar Inc. Caterpillar, the heavy equipment manufacturer and economic bellwether, posted the biggest loss in the blue-chip index. Shares fell 5.3%, after analysts at J.P. Morgan Chase & Co. downgraded the stock due to the company's exposure to the oil-and-gas sector. Investors flocked to the perceived haven of U.S. government debt and gold. The yield on the 10-year Treasury note fell to 2.038% as prices climbed. Benchmark U.S. oil futures finished 5% lower at $50.04 a barrel. Stock markets around the world posted losses. The Stoxx Europe 600 index closed lower by 2.2%, amid . With elections scheduled for later this month, investors continued to fret over the prospect of a new government that pushes back against Europe-imposed austerity measures. The worries sent the . Recently, the single currency traded at $1.1934. "The move in the euro and the move in oil are big moves that people are trying to handicap," said Brian Fenske, head of sales trading at brokerage ITG. Mr. Fenske said some investors stepped in to buy energy companies at depressed levels. Traders have said the slide in shares of energy companies has created buying opportunities, though uncertainty over the outlook for oil prices has left many investors wary of stepping in. Despite Monday's retreat, the Dow is just 3.1% from a record high reached in late December, and many investors remain optimistic about stocks in 2015. The accelerating U.S. economy and expanding corporate profits are expected to give a boost to major stock benchmarks this year. And the slide in oil prices, while damping the outlook for energy companies, has been a boon for ordinary consumers by dramatically lowering gasoline prices and giving a boost to consumer spending. "U.S. growth is actually getting better not worse," said Jim Swanson, who manages about $2.6 billion in stocks and bonds at MFS Investment Management. He said he preferred U.S. stocks to other assets in his funds. "Oil is an input cost, and that [decline] is a help to all the regions that are foundering out there." Among the biggest wild cards for investors will be the timing of interest-rate increases by the Federal Reserve, though most investors expect the central bank to take a measured approach to raising rates. Gold futures jumped 1.5% to $1203.90 an ounce. Shares of U.S. vehicle manufacturers slid despite reports of . General Motors Co. fell 1.5%, while Ford Motor Co. shares tumbled 3.9%. The monthly jobs report for December is due Friday, with economists expecting an increase in employment rolls by 243,000. The unemployment rate is expected to tick lower to 5.7% from 5.8% in the prior month. In corporate news, shares of American Airlines Group Inc. fell 0.1%, reversing early gains, after the board of the Allied Pilots Association union agreed late Saturday to accept the final contract proposal made in November by the carrier and put it out to a membership vote. Amgen Inc. and Kite Pharma Inc. entered into a research collaboration and license agreement. Amgen's shares fell 1.2%, while Kite's shares rose 15%. Write to Dan Strumpf at Credit: By Dan Strumpf
Subject: Stock exchanges; Petroleum industry; New year; Investments; Profits; Losses; Petroleum production; Gasoline prices
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Credit Suisse Group; NAICS: 522110; Name: Caterpillar Inc; NAICS: 333120, 333618, 333924; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641860410
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641860410?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Rises to Three-Week High as Investors Flee Risk; Investors Seek Safety Amid a Steep Selloff in Stocks, Oil and Copper
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
[...]investors expect the European Central Bank to expand its economic stimulus measures at its first policy meeting of the year on Jan. 22, or by March at the latest.
Full text: Gold futures jumped to a three-week high on Monday as investors turned to the asset for safety amid a steep selloff in stocks, oil, copper and other risk markets. The most actively traded gold contract, for February delivery, rose $17.80, or 1.5%, to finish at $1,204 a troy ounce on the Comex division of the New York Mercantile Exchange. Prices jumped with the opening of Monday's trading session and continued to edge higher throughout the day. Gold benefited from its haven appeal as renewed worries about sovereign Greek debt rippled through stocks, commodities and other risk markets, analysts and brokers said. Greece's general election will be held later this month with some candidates campaigning on a platform of rethinking austerity measures intended to stabilize its finances. In addition, investors expect the European Central Bank to expand its economic stimulus measures at its first policy meeting of the year on Jan. 22, or by March at the latest. Such a move could weaken the euro, making gold and the dollar more attractive to investors. The dollar also gained Monday, rising 0.3% against a basket of global currencies in the ICE U.S. Dollar Index. "You've got a lot of uncertainty with what's going on in Greece and what the ECB's ultimately going to do," said Bill Baruch, a senior market strategist at wholesale brokerage ii Trader in Chicago. Still, many analysts remain bearish on gold's prospects in the longer term, with Barclays taking note of various metrics that reflect an improving economy in the U.S., adding to expectations of a U.S. interest rate increase this year. "Gold is set to come under significant pressure," the bank said in a note. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Gold markets; American dollar; Euro
Location: United States--US Greece
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641865887
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641865887?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Big Trouble in Store for Oil; Supply Increases Continue to Squeeze Prices
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
U.S. commercial oil inventories are now high enough to cover about 164 days of net imports. [...]net imports from Canada and Mexico should be excluded from such calculations anyway, since the U.S. is their natural destination.
Full text: If you want to know what 2015 has in store for oil prices, just look at where stores of oil ended last year. U.S. commercial stocks of crude oil and refined products--excluding the roughly 700 million barrels held in the Strategic Petroleum Reserve--were just shy of 1.14 billion barrels at the end of December, according to Energy Department data. More important than the absolute level is what happened to commercial stocks last month: They went up. Refiners tend to run down their tanks as year-end approaches to help minimize tax bills. regardless is a bad sign for those banking on an oil-price rebound. Looking back to 1980, U.S. commercial inventories of oil have risen in December in only two years: in 2014 and the financial crisis year of 2008. Even back then, as the global economy was seizing, stocks rose by just 4.7 million barrels, virtually all of which was crude oil. In December, inventories surged by 17.9 million barrels, nearly two-thirds of which was refined products such as gasoline. Excluding those two years, the average December since 1980 has seen a drop of nearly 32 million barrels. December's build reflects not merely 2014's 1.2 million barrels-a-day surge in U.S. supply but also Saudi Arabia's decision to keep pumping oil to maintain its market share. Riyadh prices its oil in a way that effectively locks in a positive margin for refiners--provided they can sell the resulting products. The high preponderance of refined products in December's inventory build--along with U.S. refineries running at around 95% utilization--suggests lower crude prices are spurring refiners to do what comes naturally to them. It also implies the market can't absorb their output quickly enough. This can also be seen in the shape of the oil-futures curve. A year ago, front-month contracts traded around $91 a barrel and later-dated contracts were lower. So the curve sloped downward, indicating supply and demand were relatively tight and encouraging stocks to be drawn down. Today, front-month oil costs less than $51 and the curve slopes upward, pushing excess oil into storage. This quarter, the Energy Department forecasts the U.S. will draw down about 28 million barrels of stocks, in line with seasonal norms. But December's counterintuitive increase casts some doubt on that. U.S. inventories were supposed to fall by 6.4 million barrels in the final quarter of 2014. They fell by less than 4.9 million, suggesting forecasters are running behind changing . World-wide, the International Energy Agency sees first-quarter oil consumption dropping by almost a million barrels a day compared with the final quarter of 2015. Yet the IEA also sees production from outside the Organization of the Petroleum Exporting Countries rising by 110,000 barrels a day. With OPEC maintaining output, inventories are likely to keep building through at least the first quarter of the year. U.S. output will respond to lower prices by contracting eventually--but that will take time. The Energy Department doesn't see cuts taking hold until the second half of the year and even then, output for the year as a whole is expected to rise. Geopolitical shocks offer the most indefatigable . But consider this: U.S. commercial oil inventories are now high enough to cover about 164 days of net imports. That is down slightly from December 2013's 171 days, yet far higher than the 80 days plumbed at the end of 2007. Moreover, net imports from Canada and Mexico should be excluded from such calculations anyway, since the U.S. is their natural destination. Do this, and commercial stocks cover 279 days of net imports from elsewhere. Add in strategic reserves, and that jumps to almost 450 days. That is a formidable cushion against any supply shock--and another weight that will sink oil below $50 a barrel in the weeks and months ahead. Write to Liam Denning at Credit: By Liam Denning
Subject: Supply & demand; Petroleum industry; Inventory; Crude oil prices
Location: United States--US
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641874273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641874273?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Saudi Arabia Cuts Light Oil Prices in the U.S. But the Kingdom's Oil Company Raises Prices in Asia
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract: None available.
Full text: Saudi Arabia on Monday cut the price it charges for its oil in the U.S., prolonging a price war to regain market share lost to American shale producers. The move came after the U.S. West Texas Intermediate oil price benchmark earlier briefly fell--a level not seen since April 2009. In a list of official selling prices sent to oil buyers, Saudi Arabia's state oil company Saudi Aramco cut its light oil prices to the U.S. by 60 cents a barrel for February delivery, the latest in a long series of monthly price cuts. But Aramco also raised its light oil prices in Asia by 60 cents a barrel for delivery next month, a trend that started with December shipments after a four-month decrease. Saudi Arabia, which is the world's largest oil exporter, convinced the rest of the Organization of the Petroleum Exporting Countries to keep its in November, arguing the group should rather than defending oil price--a move that led to a sharp drop in global oil prices. Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641981711
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641981711?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
From Oil Exports to Ride-Sharing, What to Watch in Business in 2015; Taking a Look at the Economic and Regulatory Factors Shaping Industry
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
"While government officials have gone out of their way to indicate there is no change in policy, in practice this long-awaited move can open up the floodgates to substantial increases in exports by the end of 2015," says Ed Morse, global head of commodities research at Citigroup Inc. Existing dock space, mainly along the U.S. Gulf Coast, would allow ultralight oil exports of 200,000 barrels a day immediately, but could easily expand to 1 million barrels a day by the end of the year, according to Citi estimates.
Full text: The new year promises to deliver even more tests and opportunities for established industries and fast-growing sectors. Guidelines to Grease U.S. Oil Exports For the first time in 40 years, ships full of unrefined American oil are sailing from Texas to ports in Europe and Asia. This year, the new trade routes should provide a relief valve for the glut of U.S. crude. The Wall Street Journal reported in June that , Enterprise Energy Partners L.P., a pipeline company based in Houston, and Pioneer Natural Resources Co., an oil producer based in Dallas, received that allows them to sell ultralight oil to foreign buyers without sending it to a traditional refinery. With only a few exceptions, that hadn't been possible under a federal oil-export ban that dates back to the The Commerce Department insists there has been no change to the crude-export ban, but so far roughly 3 million barrels of ultralight oil have been loaded onto tankers leaving Texas. The energy industry expects that figure to rise thanks to new public guidelines issued last week by the Commerce Department that spell out how to export ultralight oil by lightly processing it and calling the liquid a refined fuel--much like gasoline and diesel--which is approved for overseas sales. "While government officials have gone out of their way to indicate there is no change in policy, in practice this long-awaited move can open up the floodgates to substantial increases in exports by the end of 2015," says Ed Morse, global head of commodities research at Citigroup Inc. Existing dock space, mainly along the U.S. Gulf Coast, would allow ultralight oil exports of 200,000 barrels a day immediately, but could easily expand to 1 million barrels a day by the end of the year, according to Citi estimates. Signs that the is one of the factors that has sent global oil prices sliding by 50% to levels not seen since the most recent recession. U.S. crude prices also . Whether they will rebound in 2015 is a question that has split energy analysts. Those who say China's economy is becoming less focused on manufacturing expect crude to languish in the $60 range, while a few optimists expect cheap oil to spur demand and are predicting a rebound to $90 a barrel. Energy companies, including Pioneer, continue to lobby Congress for a full lifting of export restrictions. Supporters argue such a move would help create jobs and improve the trade deficit, but opponents question the wisdom of shipping American oil overseas while the country is still a major importer and consumer of foreign crude. Lynn Cook Farm Economy Faces Further Austerity Many U.S. farmers are expected to in 2015 as they contend with another year of lower grain and soybean prices--economizing that could pinch the companies that sell them equipment and supplies. Fall 2014 brought the U.S.'s second straight . While prices have rebounded in recent months from their lows, they are still through this year, with futures prices for corn staying below $4 a bushel, and soybean prices drifting lower to $9 a bushel, according to agricultural lender Rabobank. Austerity in the farm economy comes on the heels of a commodity-price boom that helped fuel prosperity across the U.S. Midwest through 2013, driving farm incomes and land values to record highs--and fueling the North America farm-machinery market's biggest and longest rally in memory. "There are a lot of adjustments to come in the entire agricultural sector," said Chris Hurt, professor of agricultural economics at Purdue University in Indiana. He said farmers likely will curb spending on farm equipment, making do with tractors and combines they already own and such as Deere & Co. Demand for farm supplies like fertilizer and seeds also could slow, which would hurt companies like Monsanto Co. Deere, the world's largest seller of farm equipment, has implied that North American unit sales of high-horsepower tractors--a market it dominates--could be down 40% in 2015 from last year, when industrywide sales sank about 15%. Deere and some analysts reckon that should be enough of a break from buying for farmers to return to the market in 2016. "I don't see 2016 being worse than 2015," said Morningstar Inc. analyst Kwame Webb, who expects crop prices to firm in 2015, helping to raise farmers' incomes. Others aren't convinced that an upturn is on the horizon. Rob Wertheimer, an analyst for Vertical Research Partners, notes that even if sales of big tractors fall 40% in 2015, the number of tractors sold would still be 38% higher than the volume in the market's last trough in 2002. He said sales likely need to fall further to resemble earlier market slumps. Jesse Newman and Bob Tita Wireless Carriers Steer a Dicey Course The new year will test whether the worse is over for the telecom industry's price war--as AT&T Inc. and Verizon Communications Inc. have suggested--or whether more profit-sapping pain is ahead for the industry's leaders. The problem for the biggest carriers to this point has been This year, the problem could be Sprint Corp., which now needs to stop shedding customers after abandoning an effort to buy T-Mobile. There are other wild cards, too. Satellite broadcaster Dish Network Corp. has billions of dollars worth of . Cable companies may yet enter the wireless fray, possibly by building upon the coverage given by their Wi-Fi networks. The price battle has been welcomed by U.S. subscribers--who generally consume more data every year on their smartphones and face some of the highest monthly wireless bills in the world--and by regulators, who were hoping for increased competition when they shot down AT&T's $39 billion deal to buy T-Mobile in 2011 and warned Sprint off trying its own T-Mobile deal last year. But the promotions are taking a toll on the carriers at a bad time, just as investors are worrying about the soaring cost of acquiring the spectrum needed to grow. Share prices of the four biggest wireless carriers were hit late in the year, and Verizon and AT&T warned their profits would be hurt. The Federal Communications Commission's has drawn nearly $45 billion in bids and isn't over. AT&T is spending big to decrease its dependence on the U.S. wireless market with the pending acquisition of DirecTV and its . "With an uneven performance this year [2014], we believe 2015 will see further value destruction for an industry that is in need of significant help," said David Dixon, an analyst at FBR Capital Markets. Thomas Gryta Auto Makers Keep Pedal to the Metal Sales of cars and light trucks in the U.S. totaled an estimated 16.5 million in 2014, and and industry expectations the pace could reach 17 million in 2015, a level not seen in 12 years. To hit that mark, gasoline prices need to remain low, the U.S. economy must continue to improve, and credit needs to come easily. Last year, auto sales sizzled to a near-decade high, aided by and attractive incentives, including 0% financing and inexpensive leases. "People feel more financially comfortable," Jessica Caldwell, an analyst with Edmunds.com, said in a year-end research note. Ms. Caldwell, citing a solid economy and strong stock market, noted buyers are willing to stretch, leading to higher sales of luxury vehicles, trucks and SUVs. Total U.S. spending on new cars was just shy of $91 billion in 2013 and may have eclipsed $100 billion in 2014. Strong sales volumes have led to sustained black ink at General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles--profits that could put the Detroit Three in a tough spot this summer when it negotiates a new pact with the United Auto Workers. Recent labor deals have allowed domestic auto makers to narrow or eliminate the compensation gap with so called transplants, such as Toyota Motor Corp., that build millions of cars in the U.S. with nonunion workers. But a litany of pressures has Detroit still angling for a more competitive deal. A top concern is regulatory costs related to meeting tough fuel-economy standards. New technology can add thousands of dollars to vehicles' production costs, forcing executives to pinch pennies wherever possible. Don't look for the UAW to roll over. After 10 years without a raise for its older workers, the union is looking to put money back in the pockets of members who have weathered several years of rough road. And, labor officials aim to tweak a system that allows auto makers to pay new hires significantly less than those hired before the financial crisis. John D. Stoll Asia's Web Companies Leap on World Stage Asia's Internet giants burst onto the global scene last year with the record-setting IPO of China's Alibaba Group Holding Ltd. Their continued brisk growth--particularly in e-commerce--will be closely watched in 2015. Asian consumers already buy more online than people from any other region of the world. This year, the Asia-Pacific region will account for online sales of $765 billion, or 48% of all retail e-commerce, according to estimates by New York-based marketing-data tracker eMarketer Inc. That is up from a 35% share in 2011, the year Asia became the biggest e-commerce market globally, and as much as North America and Europe combined. The two fastest-growing e-commerce markets also will be in Asia this year: India, with 45% growth, and Indonesia with 50%, eMarketer predicts. Investors already are trolling the region's economies looking for the next Alibaba. Masayoshi Son, the CEO of Japanese Internet and telecommunications conglomerate SoftBank Corp. and one of the earliest investors in Alibaba, last year said he is putting his money--in the form of a $627 million investment from SoftBank--on Indian online marketplace Snapdeal.com. Other investors are betting on Flipkart Internet Pvt., another Indian e-commerce company, which said it raised $700 million in a third round of financing at the end of December. Singapore-based Lazada Group, which is hoping to be the Amazon.com of Southeast Asia and runs the most-visited online retail site in Indonesia, said last month it secured around $249 million in new funds, led by Singaporean state investment company Temasek Holdings. Some of the region's biggest Internet companies are increasingly making their presence felt abroad, investing in Western firms and entering into partnerships that extend their reach overseas or fill out services they are offering to customers at home. Many are pushing beyond traditional e-commerce to become big online providers of everything from movies, music and games to taxi-hailing apps, sending ripples through Hollywood and Silicon Valley. Alibaba, which is already the world's biggest e-commerce company in terms of the value of goods that flow through its shopping sites, has been plowing money into videogame makers and film-production facilities. It is expected to acquire more foreign movies and videos to show over its networks this year. Chinese rival Tencent Holdings Ltd., which is the world's biggest videogame publisher and has an 18% stake in China's second-largest online shopping firm, JD.com Inc., is sealing distribution deals with Western film and music makers, moves that are likely to continue this year. Phred Dvorak Price/Power Struggle for Computer Servers Amazon.com Inc., Facebook Inc. and Google Inc. save loads of money running their websites by spurning brand-name server computers in favor of inexpensive commodity-style systems. And the trend is reaching other parts of data-center operations, aided by new kinds of software. In addition to commodity servers, technology vendors are offering lower-price alternatives to specialized networking and data-storage equipment. Backers say the software-defined data center, as the trend is known, can deliver better performance as well as lower costs for corporate customers. Cheaper computing power has been key to the movement. Computer makers like Hewlett-Packard Co. and Dell Inc. long have based their servers on Intel's x86 chips, originally used in personal computers. But companies looking to build huge server farms later used the same technology without relying on big-name vendors. Google has built its own servers; Facebook uses low-cost x86 servers from Asian vendors like Quanta Inc. The Web firms found ways to sidestep other brand-name gear, a trend other businesses have begun to emulate. Some customers turned to software, developed at universities and refined by startups, that lets x86-based computers control networks in place of specialized gear from the likes of Cisco Systems Inc. and Juniper Networks Inc. That shift required fewer costly switching systems, and for those still needed, low-price alternatives emerged from Quanta and others vendors of low-end servers. Providers of so-called software-defined networking, or SDN, now include VMware Inc., the Nuage Networks unit of Alcatel-Lucent SA, Cumulus Networks and Big Switch Networks. In data storage, startups like Formation Data Systems plan to combine software and x86 chips in dedicated storage boxes that can replace high-end gear from vendors like EMC Inc. and NetApp Inc. Others, including Atlantis Computing and Nutanix, offer systems that store data on disk drives or flash memory chips built into individual x86 servers, the approach used by many Web companies. The software-defined versions of storage and networking gear aren't yet widely deployed. But Cisco, EMC and other incumbents already are using their own software to respond to the changes, and analysts expect more buying activity in 2015 as the trend creates new billion-dollar businesses. Don Clark Can McDonald's Get Back on a Roll? The battle for burger sales should intensify this year as struggling McDonald's Corp. grapples with changing consumer tastes, cooling sales--and a more formidable competitor. McDonald's business suffered throughout 2014. In November, for example, monthly sales at established locations in the U.S. fell 4.6%--its . Under pressure from franchisees and some shareholders, the world's largest restaurant chain by revenue announced plans in December to upgrade its ingredients and add more customized ordering to and to that has slowed its service. The simple-yet-customizable approach has worked well for competitors like Chipotle Mexican Grill Inc. and Five Guys Holdings LLC, which are contributing to McDonald's problems. As McDonald's works to turn around its business, rival Burger King is digesting a major acquisition: Canadian coffee-and-doughnut chain Tim Hortons. The Burger King-Tim Hortons with more than 18,000 restaurants in 100 countries, making it a fierce rival to McDonald's roughly 35,000 global locations. Brazilian private-equity firm 3G Capital, which bought Burger King in 2010 and engineered the Tim Hortons deal, is known for its strict cost-cutting and focus on profit-margin improvements. That could lure investors from McDonald's and other struggling stocks. An analyst at Morgan Stanley recently said the Burger King and Tim Hortons merger looks promising, while McDonald's continues to lose market share in the U.S. On top of changes to its menu, McDonald's also is trying to enhance its credibility by and testing mobile ordering and payment. But given McDonald's negative outlook for the end of last year, Janney Capital Markets analyst Mark Kalinowski says 2015 will be likely as bad for the golden arches. Annie Gasparro Ride-Sharing Apps Go to the Mat As rapidly as taxi-hailing apps have become a part of daily life for millions of users, Uber Technologies Inc. and its rivals are . Uber is under attack by dozens of regulators around the world who say the car-hailing service poses safety risks and unfairly competes with local taxi companies. In the coming months, the company will seek to ease concerns posed by governments such as India, its largest market outside the U.S. The country following an allegation of rape against one of it drivers. The five-year-old startup like these by adopting new security measures to screen the backgrounds of the 50,000 new drivers it adds each month. In other cities, ride-sharing companies have succeeded in getting regulators to revise decades-old laws regarding taxis. A taking shape in places such as Portland, Ore., could help legitimize Uber and help it gain acceptance as a . Uber may aim to soften its public image after a series of missteps and controversies triggered by Chief Executive Travis Kalanick and his deputies. The company was forced to issue a mea culpa and review its policies about data privacy after one Uber executive's recent suggestion, at a private dinner party, that the company should invest in opposition research to dig up dirt on journalists. Uber will continue to play catch-up in China, where it trails a pair of well-heeled startups, Didi Dache and Kuaidi Dache. Uber recently Baidu Inc. that could help the car service gain users in the country. Douglas MacMillan Net-Neutrality Battle Grows More Intense The debate about the openness of the Internet is only going to get more heated in the months to come. Late last year, President Barack Obama the Federal Communications Commission as a public utility to ensure the Internet remains open for all and not divided into fast and slow lanes. FCC Chairman Thomas Wheeler, who has shown to be decisive on big issues, plans to regulating how broadband providers treat traffic on their networks. as early as the FCC's Feb. 26 open meeting. Any proposal would require a vote of majority of the agency's five commissioners to pass Net neutrality, the principle that all Internet traffic should be treated equally, has been the subject of much discussion over the years. Rules which prevent Internet companies from blocking, slowing or prioritizing certain Internet traffic were adopted in 2010. But in January 2014, Verizon Communications Inc. won , sending regulators back to the drawing board. Mr. Wheeler that he thought would stand up in court, but they were fiercely opposed by net neutrality advocates because the proposals would have allowed content companies to pay Internet providers for faster, more seamless delivery of their content online. If Internet service providers are allowed to sell freedom from congestion, advocates argue that incentivizes them to keep networks congested. if the FCC moves to regulate broadband Internet service as a Title II Telecommunications Service under the 1996 Telecom Act. Currently, it is considered an information service under Title I, making it subject to fewer rules. Net neutrality advocates have hinted they might sue over anything weaker. Internet providers say Title II would harm investment because it grants the FCC authority to set other rules, such as setting prices or forcing ISPs to allow rivals to use their wires to set up competing businesses. Stronger rules could galvanize the Republican-controlled Congress to rewrite telecommunications law to address the issue head on. Ryan Knutson and Gautham Nagesh
Subject: Exports; Petroleum industry; Farm machinery; Prices; International trade
Location: Texas
Company / organization: Name: AT & T Inc; NAICS: 517110, 517210; Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Congress; NAICS: 921120; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1641987821
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641987821?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Copper Falls to 4½-Year Low as Greece, Growth Worries Weigh; Weak Oil Prices, Strengthening Dollar Also Influence Markets
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract: None available.
Full text: Copper prices ended at a new 4½-year low Monday, falling in tandem with stocks and other so-called risk markets as worries about Greek debt, weak oil prices and a strengthening dollar weighed on investors' minds. The most actively traded copper contract for March delivery settled at its lowest level since June 7, 2010, falling 5.15 cents, or 1.8%, to $2.7660 a pound on the Comex division of the New York Mercantile Exchange. The price drop appeared to be part of a broader move across the markets as investors shied away from risk in the first full week of trading after the start of the new year amid a host of bearish factors, analysts and brokers said. Chief among them were renewed worries about Greek sovereign debt, as some candidates vying in this month's general election are campaigning on a platform of revisiting austerity measures intended to stabilize the country's finances. Copper's losses came as the Dow Jones Industrial Average and the U.S. oil benchmark shed more than 4%, for the first time in nearly six years. Meanwhile, the U.S. dollar rose 0.3% against a basket of global currencies. Slower global economic growth remains a worry for investors, too, as it is likely to crimp demand for copper, which is widely used in industrial applications from home building to electronics manufacturing. "Lower growth figures across the world don't really paint a bullish picture for copper," said Adam Klopfenstein, a senior market strategist for Archer Financial Services in Chicago. Analysts cited weak manufacturing data from last week in China and the U.S., the world's two largest copper consumers, as contributing to the negative sentiment. "Rising worries about Chinese growth, absence of Chinese buying, supply surpluses on the horizon and a strengthening dollar are the main drivers of lower prices this morning," RBC Capital Markets said in a note. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164198 7889
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1641987889?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Sands Producer Defaults on Canada Pension Fund Debt; Laricina Energy Says It May Have to Cease Operations If Deal With CPP Isn't Struck
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract:
[...]the Calgary-based company, which produces oil sands crude from horizontally drilled wells in northern Alberta, said it may be forced to cease operations unless a deal can be worked out with CPP, its largest shareholder.
Full text: CALGARY--Junior oil sands producer Laricina Energy Ltd. said it may no longer be able to fund its operations after defaulting on financing extended by Canada's largest pension fund, the CPP Investment Board. The privately-held company's chief executive said Monday that Laricina is in talks with the fund and expressed confidence an agreement would be reached to allow the company to stay in business after it breached a debt pact covenant. "We would have every expectation that we would come to a conclusion with CPP in our discussions," CEO Glen Schmidt said in an interview. "CPP has been a strong supporter of the company," he said. A representative for the CPP Investment Board declined to comment. On Friday, Laricina said its average production in the quarter ended last month was 18% below a target of 1,255 barrels a day, which violated the terms of 150 million Canadian dollars ($127.6 million) in debt extended earlier in the year by the CPP. Mr. Schmidt blamed that shortfall on unforeseen volatility "fine-tuning" operations at two test projects as it prepares for possible commercial production. As a result, the Calgary-based company, which produces oil sands crude from horizontally drilled wells in northern Alberta, said it may be forced to cease operations unless a deal can be worked out with CPP, its largest shareholder. The notes issued to the CPP, which yield 11.5%, were secured against the assets of the company. Laricina said its holdings of cash and equivalents, part of its total assets, were C$178 million as of Dec. 31, compared with C$160.3 million as of June 30. While the default wasn't related to the recent drop in global crude oil prices, that weaker pricing environment may complicate Laricina's efforts to raise capital. The company warned in November that it might be forced to delay commercialization of its projects without additional financing. "The capital markets are not putting a lot of new money to work," said Mr. Schmidt. "The flow of capital changed materially between the middle of 2014 and the end of 2014 and that clearly [has] had an impact on the numbers of players but also the amounts of capital," he said. In addition to debt financing, the CPP said in its latest annual report that it has made C$350 million in equity investments in Laricina. Other key investors include Lime Rock Partners, Kayne Anderson Capital Advisors and Mount Kellett Capital Management, according to a Laricina presentation dated Sept. 11, 2014. Write to Chester Dawson at Corrections & Amplifications Laricina's cash and equivalents amounted to 178 million Canadian dollars ($150.7 million) as of Dec. 31 and C$160.3 million on June 30. An earlier version of this article misidentified those figures as total assets and cited an incorrect June 30 figure. (Jan. 7, 2015) Credit: By Chester Dawson
Subject: Petroleum industry; Debt financing; Crude oil prices; Oil sands
Location: Canada
Company / organization: Name: Mount Kellett Capital Management; NAICS: 523910; Name: Canadian Pension Plan Investment Board; NAICS: 523920; Name: Kayne Anderson Capital Advisors; NAICS: 523930, 523999; Name: Lime Rock Partners; NAICS: 523999; Name: Laricina Energy Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642029978
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642029978?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Morning Briefing: U.S. Stocks Drop With Oil Prices
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Jan 2015: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG DJIA 17501.7 -331.34 -1.86% Nasdaq 4652.57 -74.24 -1.57% S&P 500 2020.58 -37.62 -1.83% Japan: Nikkei 225 17408.7 -42.06 -0.24% Hang Seng 23721.3 -136.5 -0.57% Shanghai Composite 3350.52 115.84 3.58% S&P BSE Sensex 27842.3 -45.58 -0.16% Australia: S&P/ASX 5450.3 14.4 0.26% UK: FTSE 100 6417.16 -130.64 -2.00% PRICE CHG YIELD% U.S. 2 Year 1/32 0.661 U.S. 5 Year 7/32 1.566 U.S. 10 Year 22/32 2.034 Australia 10 Year 28/32 2.698 China 10 Year 0/32 3.680 India 10 Year 1/32 7.879 Japan 10 Year 0/32 0.328 German 10 Year -7/32 0.522 LAST(MID) CHANGE Australia $ (AUD/USD) 0.8084 -0.0001 Yen (USD/JPY) 119.62 -0.02 S. Korean Won (USD/KRW) 1109.96 0.03 Chinese Yuan (USD/CNY) 6.2219 0 Euro (EUR/USD) 1.1934 0.0001 WSJ Dollar Index 83.83 0 LAST CHANGE % CHG Crude Oil 49.88 -2.81 -5.33% Brent Crude 54.1 -3.16 -5.52% Gold 1204 17.8 1.50% SNAPSHOT Oil prices tumbled to fresh lows on new signs of a supply glut, taking U.S. stocks down with them, while Treasurys and gold rallied as investors fled risk. The euro sank to a nine-year low against the dollar on anxiety over Greece. OPENING CALL PMI data abound Tuesday, starting with China and Japan, which will each release gauges of nonmanufacturing activity for December. China's economy showed modest signs of resilience outside the factory sector in November, but economists generally expect December's HSBC services PMI to lose some momentum. In Japan, the Markit Services PMI is seen edging higher. Meanwhile in Hong Kong, the HSBC Purchasing Managers' Index is expected to build on November's improvement, yet remain in below-50 contraction mode. EQUITIES The Dow industrials tumbled more than 300 points, kicking off the new year on a sour note as a renewed slide in oil prices sent energy shares sharply lower. The S&P 500 and the Nasdaq Composite also finished lower. The declines were market-wide, beginning at the opening bell and gaining force throughout the session as oil prices plumbed new lows. Beleaguered shares of energy companies led the push lower after U.S.-traded crude oil fell below $50 a barrel for the first time in nearly six years. Energy shares in the S&P 500 dropped 4%. "It seems like everyone is taking a step back instead of running into the new year," said Viren Chandrasoma, managing director of equity trading at Credit Suisse. "There hasn't been a real buying-on-the-dip mentality today." Despite Monday's rout, Wall Street trading desks said activity was relatively light given the scale of the move lower. Rather than sell en masse, many investors were simply starting the new year with a more cautious posture following last year's brisk gains. The heaviest losses were concentrated in corners of the market tied to the energy sector. Almost a quarter of the Dow's decline was due to selling in shares of Chevron, Exxon Mobil and Caterpillar. Caterpillar, the heavy equipment manufacturer and economic bellwether, posted the biggest loss in the blue-chip index. Shares fell 5.3%, after analysts at J.P. Morgan Chase downgraded the stock due to the company's exposure to the oil-and-gas sector. Shares of U.S. vehicle manufacturers slid despite reports of strong auto sales in December. General Motors fell 1.5%, while Ford Motor shares tumbled 3.9%. The monthly jobs report for December is due Friday, with economists expecting an increase in employment rolls by 243,000. The unemployment rate is expected to tick lower to 5.7% from 5.8% in the prior month. In corporate news, shares of American Airlines Group fell 0.1%, reversing early gains, after the board of the Allied Pilots Association union agreed late Saturday to accept the final contract proposal made in November by the carrier and put it out to a membership vote. Amgen and Kite Pharma entered into a research collaboration and license agreement. Amgen's shares fell 1.2%, while Kite's shares rose 15%. In Asian trading Monday, Chinese shares started the year with a bang, with Shanghai ending at a more-than-five-year high and China's commodity sector defying a further tumble in global oil prices. Elsewhere in Asia, stocks finished mixed. FOREX The euro tumbled to a nine-year low against the highflying dollar, struck by nerves over Greek politics and steadily building expectations that the European Central Bank will soon beef up its stimulus program. Analysts and investors said the move reflects growing fears over the election in Greece in late January that some worry could pave the way for the country's exit from the eurozone. The euro's drop won't be entirely unwelcome: ECB chief Mario Draghi has previously highlighted the strength of the euro as a drag on inflation, which is far below the central bank's target. A weaker currency could also provide a much-needed boost to the region's economy by making its exports cheaper to overseas buyers. The latest jitters stem from a report in Saturday's edition of German news magazine Der Spiegel, which suggested the German government is ready to let Greece drop out of the euro if needed. "Political risk is back in markets, with the election in Greece unnerving investors," said UBS economist Paul Donovan. BONDS Investors piled into ultrasafe U.S. government debt, pushing down the yield on the benchmark 10-year note to the lowest level in more than a year. Tumbling crude oil prices, a selloff in U.S. and European stocks, continued anxiety over Greece's elections and the latest report from Germany flagging the risk of alarmingly low inflation all encouraged investors to buy haven bonds, pushing the 10-year yield down close to the 2% mark. The bond market has gained ground for six straight sessions, off to a strong start in the new year following the biggest annual rally last year since 2011. Investors entered the new year continuing to grapple with multiple threats to the global growth outlook. The eurozone's economy has been stagnant. Japan's economy is in recession. China's economy has been slowing from the torrid pace a decade ago. "There are more concerns about the global economy, leading to more demand for haven Treasury bonds," said Anthony Cronin, a Treasury bond trader at Société Générale. "There are worries that Europe is close to a deflationary spiral at the same time that China's growth could be slowing dramatically." Mr. Cronin says the 10-year yield will fall below 2% if haven demand continues to intensify. The yield fell below 2% on an intraday basis back in October. COMMODITIES Oil prices sank to more-than-five-year lows on fresh signs that supply will outstrip demand in the coming months. U.S. oil prices briefly fell below $50 a barrel for the first time since April 2009, and Brent, the global benchmark, crashed through the $55-a-barrel mark. Some analysts have predicted that prices will level off above $50 a barrel, following a nearly 50% slide last year. But a persistent glut in the global market is fueling further declines in the new year. Adding to the downward pressure was Saudi Arabia's decision on Monday to cut the February prices for its crude oil in the U.S., while raising them in Asia. Saudi price cuts to the U.S. in recent months have weighed on prices. Saudi Arabia "could stop this slide at any moment if they wanted to, but I don't think they will," said Tim Guinness, chief investment officer of Guinness Atkinson Asset Management, which oversees $300 million in energy equity investments. Mr. Guinness said prices could fall below $40 a barrel in the next eight weeks, but he expects them to rebound to $80 a barrel by the end of the year. His funds have no exposure to oil-focused U.S. independent producers, but he said he is looking to buy some as their share prices fall. Separately, gold futures jumped to a three-week high as investors turned to the asset for safety amid a steep selloff in stocks, oil, copper and other risk markets. TODAY'S HEADLINES France, Germany Push Athens on Bailout France and Germany stepped up pressure on Greece to meet the terms of bailout programs, returning to the brinkmanship of the eurozone debt crisis as the 19-nation currency dropped to a nine-year low. U.S. Auto Sales Rise in December, Capping Strong Year Auto makers in December reported a surge in U.S. sales, capping the strongest year since a global financial crisis roiled the industry and prompted some companies to undertake government-brokered restructurings. Saudi Arabia Cuts Light Oil Prices in the U.S. Saudi Arabia's state-oil company cut the price it charges for its oil in the U.S. by 60 cents, prolonging a price war to regain market share lost to American shale producers. Morgan Stanley Fires Staffer Over Data Theft Morgan Stanley fired a financial adviser accused of stealing account information from 350,000 of its wealth-management clients, or about 10% of the firm's total, and posting some of the data on the Internet. ISDA Takes Caesars Default Query to Expert Panel For the first time since the financial crisis, a Wall Street trade group has asked a panel of outside experts to decide whether holders of credit-default swaps will collect on what some creditors contend was a default at Caesars Entertainment Operating Co London Unit of Banco Espirito Santo Faces Fine The U.K.'s top financial regulator is said to be planning to fine the London-based investment banking unit of collapsed Portuguese lender Banco Espirito Santo for violating listing rules. Obama Seen Naming Community Banker to Fed The White House is expected to nominate a community banker to the Federal Reserve's Board of Governors as soon as this week. The name of President Obama's selection couldn't be learned. NPS Pharmaceuticals Seeks Buyer NPS Pharmaceuticals is seeking a buyer, in a sales process that could draw rivals to the maker of treatments for rare diseases. Given a typical takeover premium, the company could be valued at north of $4.5 billion in a sale. Amgen and Kite Pharma in Cancer Immunotherapy Pact Amgen and Kite Pharma reached a research collaboration and license agreement to develop cancer immunotherapy treatments that focus on Amgen's array of cancer targets and Kite Pharma's autologous cell therapy platform. RECENT DJ DOMINANTS Morgan Stanley Unit Agrees to Sell Montreal Gateway Terminals NPS Pharmaceuticals Seeks Buyer Legal Publisher ALM to Acquire Summit Professional Networks Senior Adviser Departs Swaps Group CVS Health Gives Preferred Formulary Status to Gilead Sciences' Harvoni, Sovaldi TODAY'S CALENDAR (Times in GMT, followed by country and event) 2100 SKA Dec International Reserves 2350 JPN Dec Monetary base 0030 AUS Nov International Trade in Goods & Services 0030 TAI Dec Price Indexes (CPI / WPI) 0100 AUS Dec VFACTS vehicle sales 0135 JPN Dec Japan Services PMI 0145 CHN Dec China Services PMI 0230 HK Dec Hong Kong Whole Economy PMI 0500 IND Dec India Services PMI 0745 FRA Dec Consumer confidence survey 0820 TAI Dec International Reserves 0845 ITA Dec Italy Services PMI 0850 FRA Dec France Services PMI 0855 GER Dec Germany Services PMI 0900 EU Dec Eurozone Services PMI 0930 UK Dec CIPS / Markit Services PMI 0930 UK Dec UK Official Reserves 0930 UK Q4 Bank of England's Bank Liabilities Survey 0930 UK Q4 Bank of England Credit Conditions Survey 1245 US ICSC-Goldman Sachs Chain Store Sales Index 1315 CAN Dec Official International Reserves 1330 CAN Nov Industrial product & raw materials price indexes 1355 US Johnson Redbook Retail Sales Index 1445 US Dec US Services PMI 1500 US Nov Manufacturers' Shipments, Inventories & Orders (M3) 1500 US Dec ISM Non-Manufacturing Report on Business 1600 US Dec Global Services PMI 2130 US API Weekly Statistical Bulletin
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642030211
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642030211?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Sands Producer Defaults on Canada Pension Fund Debt; Laricina Energy Says It May Have to Cease Operations If Deal With CPP Isn't Struck
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
[...]the Calgary-based company, which produces oil sands crude from horizontally drilled wells in northern Alberta, said it may be forced to cease operations unless a deal can be worked out with CPP, its largest shareholder.
Full text: CALGARY--Junior oil sands producer Laricina Energy Ltd. said it may no longer be able to fund its operations after defaulting on financing extended by Canada's largest pension fund, the CPP Investment Board. The privately-held company's chief executive said Monday that Laricina is in talks with the fund and expressed confidence an agreement would be reached to allow the company to stay in business after it breached a debt pact covenant. "We would have every expectation that we would come to a conclusion with CPP in our discussions," CEO Glen Schmidt said in an interview. "CPP has been a strong supporter of the company," he said. A representative for the CPP Investment Board declined to comment. On Friday, Laricina said its average production in the quarter ended last month was 18% below a target of 1,255 barrels a day, which violated the terms of 150 million Canadian dollars ($127.6 million) in debt extended earlier in the year by the CPP. Mr. Schmidt blamed that shortfall on unforeseen volatility "fine-tuning" operations at two test projects as it prepares for possible commercial production. As a result, the Calgary-based company, which produces oil sands crude from horizontally drilled wells in northern Alberta, said it may be forced to cease operations unless a deal can be worked out with CPP, its largest shareholder. The notes issued to the CPP, which yield 11.5%, were secured against the assets of the company, which Laricina said totaled C$178 million as of Dec. 31. That is down from C$218.5 million as recently as June 30, 2014. While the default wasn't related to the recent drop in global crude oil prices, that weaker pricing environment may complicate Laricina's efforts to raise capital. The company warned in November that it might be forced to delay commercialization of its projects without additional financing. "The capital markets are not putting a lot of new money to work," said Mr. Schmidt. "The flow of capital changed materially between the middle of 2014 and the end of 2014 and that clearly [has] had an impact on the numbers of players but also the amounts of capital," he said. In addition to debt financing, the CPP said in its latest annual report that it has made C$350 million in equity investments in Laricina. Other key investors include Lime Rock Partners, Kayne Anderson Capital Advisors and Mount Kellett Capital Management, according to a Laricina presentation dated Sept. 11, 2014. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Petroleum industry; Debt financing; Crude oil prices; Oil sands
Location: Canada
Company / organization: Name: Mount Kellett Capital Management; NAICS: 523910; Name: Canadian Pension Plan Investment Board; NAICS: 523920; Name: Kayne Anderson Capital Advisors; NAICS: 523930, 523999; Name: Lime Rock Partners; NAICS: 523999; Name: Laricina Energy Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642052259
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642052259?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil, European Inflation Rattle Markets While Euro Hits Nine-Year Low
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract: None available.
Full text: The euro dropped to its lowest level against the dollar since 2006, reflecting concerns Greece could be headed for a messy exit from the common currency. Adding to pressure on the euro was a round of tepid inflation readings. That data raised expectations the European Central Bank will soon beef up its stimulus program, which investors interpreted as bearish for the euro.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Page One
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642098253
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642098253?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Hits New Lows, Brent Crude Nears $50; Brent, U.S. Crude Futures Hit Their Lowest Prices Since April 2009
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
Analysts surveyed by The Wall Street Journal expect the report to show that domestic oil supplies rose by 300,000 barrels in the week, while gasoline inventories grew by 3.2 million barrels and stocks of distillates, including heating oil and diesel fuel, rose by 2.3 million barrels.
Full text: Oil prices slumped sharply Tuesday on expectations of growing supplies and broad concerns about the pace of global growth. Light, sweet oil for February delivery fell $2.11, or 4.2%, to $47.93 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $2.01, or 3.8%, to $51.10 a barrel on ICE Futures Europe. Both contracts hit their lowest prices since April 2009. The selloff accelerated Tuesday as traders looked ahead to weekly U.S. inventory data, which are expected to show that crude-oil supplies grew last week. New indications that top exporter Saudi Arabia is unwilling to cut production also weighed on the market. The price drop roiled other markets. Currencies of oil-producing nations fell against the dollar and shares of energy companies slid. Bond yields fell to fresh lows as investors, worried about deflation, piled into safer assets. Oil futures have plunged for months on concerns that the global market is oversupplied, largely due to unexpectedly strong U.S. output. Demand growth also has fallen short of expectations. "Oil is the thing that's pretty much driving all the financial markets right now," said Jeffrey Sherman, portfolio manager at DoubleLine Capital LP, which oversees about $64 billion in assets. "This is essentially the market realizing that global growth is probably slowing." Energy companies are cutting back on spending in response to low prices, but it could take months for production growth to slow, market watchers say. The U.S. Energy Information Administration is set to release storage data for the week ended Jan. 2 on Wednesday. Analysts surveyed by The Wall Street Journal expect the report to show that domestic oil supplies rose by 300,000 barrels in the week, while gasoline inventories grew by 3.2 million barrels and stocks of distillates, including heating oil and diesel fuel, rose by 2.3 million barrels. The American Petroleum Institute, an industry group, said late Wednesday that its own data for the same week showed a 4-million-barrel decline in crude-oil supplies, according to an industry source. The group also said that gasoline supplies grew by 6.9 million barrels and distillate stocks rose by 9.1 million barrels, according to the source. The Organization of the Petroleum Exporting Countries opted not to lower its production quota in November, disappointing many investors and traders who had counted on the cartel to restore balance to the market. "The market's trying to find that level where there's a supply response, " said Amrita Sen, oil analyst at Energy Aspects in London. "OPEC is usually the quickest supply response, and it's not there at the moment." Saudi Arabia, OPEC's biggest exporter, reaffirmed its stance this week. On Monday, the kingdom , a sign that it may be trying to regain market share and push prices low enough that U.S. shale-oil production becomes unprofitable. Saudi price cuts to the U.S. in recent months have weighed on prices. On Tuesday, Saudi Arabia's King Abdullah said the country will address the recent decline in oil prices with "a solid will," according to a speech read by his crown prince on state television Tuesday. The 90-year-old king is in the hospital being treated for pneumonia. The speech blamed current tensions in the oil market on "the slow growth in the global economy," rather than on the ample supply growth that analysts and traders say was the chief cause. "Over a significant part of the last 15 years, we've had Saudi Arabia and others playing a swing producer role. They've now decided not to," said Tim Guinness, chief investment officer of Guinness Atkinson Asset Management Inc., which oversees $300 million in energy equity investments. "There is excess supply in the short run, and it wouldn't surprise us to see the oil price go below $40." Gasoline futures for February delivery fell 2.71 cents, or 2%, to $1.3543 a gallon, the lowest settlement since March 2009. Diesel futures fell 2.30 cents, or 1.3%, to $1.7262 a gallon, the lowest level since September 2009. Timothy Puko and Summer Said contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; American dollar; Crude oil prices; Petroleum production; Price cuts
Location: United States--US Saudi Arabia
Company / organization: Name: DoubleLine Capital LP; NAICS: 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642110391
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642110391?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Year Ahead: Eight Business Trends to Watch in 2015 --- Oil Exports, Asian Web Firms and Auto Industry on Upswing; Farm Gear, Telecoms Face Headwinds
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Jan 2015: B.1.
Abstract:
The Wall Street Journal reported in June that two Texas energy companies, Enterprise Energy Partners L.P., a pipeline company based in Houston, and Pioneer Natural Resources Co., an oil producer based in Dallas, received special permission from the Commerce Department that allows them to sell ultralight oil to foreign buyers without sending it to a traditional refinery.
Full text: Established industries and fast-growing sectors face more challenges and have more opportunities in the new year. Here's what to expect. Part 2 of a two-part series. Farm Economy Faces Further Austerity Many U.S. farmers are expected to tighten their belts further in 2015 as they contend with another year of lower grain and soybean prices -- economizing that could pinch the companies that sell them equipment and supplies. Fall 2014 brought the U.S.'s second straight bumper harvest of major crops. While prices have rebounded in recent months from their lows, they are still projected to remain depressed through this year, with futures prices for corn staying below $4 a bushel, and soybean prices drifting lower to $9 a bushel, according to agricultural lender Rabobank. Austerity in the farm economy comes on the heels of a commodity-price boom that helped fuel prosperity across the U.S. Midwest through 2013, driving farm incomes and land values to record highs -- and fueling the North America farm-machinery market's biggest and longest rally in memory. "There are a lot of adjustments to come in the entire agricultural sector," said Chris Hurt, professor of agricultural economics at Purdue University in Indiana. He said farmers likely will curb spending on farm equipment, making do with tractors and combines they already own and squeezing profits for manufacturers such as Deere & Co. Demand for farm supplies like fertilizer and seeds also could slow, which would hurt companies like Monsanto Co. Deere, the world's largest seller of farm equipment, has implied that North American unit sales of high-horsepower tractors -- a market it dominates -- could be down 40% in 2015 from last year, when industrywide sales sank about 15%. Deere and some analysts reckon that should be enough of a break from buying for farmers to return to the market in 2016. -- Jesse Newman and Bob Tita Wireless Carriers Steer a Dicey Course The new year will test whether the worse is over for the telecom industry's price war -- as AT&T Inc. and Verizon Communications Inc. have suggested -- or whether more profit-sapping pain is ahead for the industry's leaders. The problem for the biggest carriers to this point has been T-Mobile US Inc., which got rid of contracts and paid subscribers to switch. This year, the problem could be Sprint Corp., which now needs to stop shedding customers after abandoning an effort to buy T-Mobile. There are other wild cards, too. Satellite broadcaster Dish Network Corp. has billions of dollars worth of wireless licenses and could in theory emerge as a competitor. Cable companies may yet enter the wireless fray, possibly by building upon the coverage given by their Wi-Fi networks. The price battle has been welcomed by U.S. subscribers -- who generally consume more data every year on their smartphones and face some of the highest monthly wireless bills in the world -- and by regulators, who were hoping for increased competition when they shot down AT&T's $39 billion deal to buy T-Mobile in 2011 and warned Sprint off trying its own T-Mobile deal last year. But the promotions are taking a toll on the carriers at a bad time, just as investors are worrying about the soaring cost of acquiring the spectrum needed to grow. Share prices of the four biggest wireless carriers were hit late in the year, and Verizon and AT&T warned their profits would be hurt. The Federal Communications Commission's auction of spectrum licenses has drawn nearly $45 billion in bids and isn't over. AT&T is spending big to decrease its dependence on the U.S. wireless market with the pending acquisition of DirecTV and its move into the Mexico. -- Thomas Gryta Guidelines to Grease U.S. Oil Exports For the first time in 40 years, ships full of unrefined American oil are sailing from Texas to ports in Europe and Asia. This year, the new trade routes should provide a relief valve for the glut of U.S. crude. The Wall Street Journal reported in June that two Texas energy companies, Enterprise Energy Partners L.P., a pipeline company based in Houston, and Pioneer Natural Resources Co., an oil producer based in Dallas, received special permission from the Commerce Department that allows them to sell ultralight oil to foreign buyers without sending it to a traditional refinery. With only a few exceptions, that hadn't been possible under a federal oil-export ban that dates back to the 1970s Arab oil embargo. The Commerce Department insists there has been no change to the crude-export ban, but so far roughly 3 million barrels of ultralight oil have been loaded onto tankers leaving Texas. The industry expects that figure to rise thanks to new guidelines issued last week by the Commerce Department that spell out how to export ultralight oil by lightly processing it and calling the liquid a refined fuel -- much like gasoline and diesel -- which is approved for overseas sales. "While government officials have gone out of their way to indicate there is no change in policy, in practice this long-awaited move can open up the floodgates to substantial increases in exports by the end of 2015," says Ed Morse, global head of commodities research at Citigroup Inc. Existing dock space, mainly along the U.S. Gulf Coast, would allow ultralight oil exports of 200,000 barrels a day immediately, but could easily expand to 1 million barrels a day by the end of the year, according to Citi estimates. Signs that the U.S. is starting to export its glut of oil is one of the factors that has sent global oil prices sliding by 50% to levels not seen since the most recent recession. U.S. crude prices also have tumbled to about $50 a barrel. Whether they will rebound in 2015 is a question that has split energy analysts. Those who say China's economy is becoming less focused on manufacturing expect crude to languish in the $60 range, while a few optimists expect cheap oil to spur demand and are predicting a rebound to $90 a barrel. Energy companies, including Pioneer, continue to lobby Congress for a full lifting of export restrictions. Supporters argue such a move would help create jobs and improve the trade deficit, but opponents question the wisdom of shipping American oil overseas while the country is still a major importer and consumer of foreign crude. -- Lynn Cook Auto Makers Keep Pedal to the Metal Sales of cars and light trucks in the U.S. totaled an estimated 16.5 million in 2014, and based on December's sales and industry expectations the pace could reach 17 million in 2015, a level not seen in 12 years. To hit that mark, gasoline prices need to remain low, the U.S. economy must continue to improve, and credit needs to come easily. Last year, auto sales sizzled to a near-decade high, aided by gasoline at around $2 a gallon and attractive incentives, including 0% financing and inexpensive leases. "People feel more financially comfortable," Jessica Caldwell, an analyst with Edmunds.com, said in a year-end research note. Ms. Caldwell, citing a solid economy and strong stock market, noted buyers are willing to stretch, leading to higher sales of luxury vehicles, trucks and SUVs. Total U.S. spending on new cars was just shy of $91 billion in 2013 and may have eclipsed $100 billion in 2014. Strong sales volumes have led to sustained black ink at General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles -- profits that could put the Detroit Three in a tough spot this summer when it negotiates a new pact with the United Auto Workers. Recent labor deals have allowed domestic auto makers to narrow or eliminate the compensation gap with so called transplants, such as Toyota Motor Corp., that build millions of cars in the U.S. with nonunion workers. But a litany of pressures has Detroit still angling for a more competitive deal. A top concern is regulatory costs related to meeting tough fuel-economy standards. New technology can add thousands of dollars to vehicles' production costs, forcing executives to pinch pennies wherever possible. Don't look for the UAW to roll over. After 10 years without a raise for its older workers, the union is looking to put money back in the pockets of members who have weathered several years of rough road. And, labor officials aim to tweak a system that allows auto makers to pay new hires significantly less than those hired before the financial crisis. -- John D. Stoll Asia's Web Companies Leap on World Stage Asia's Internet giants burst onto the global scene last year with the record-setting IPO of China's Alibaba Group Holding Ltd. Their continued brisk growth -- particularly in e-commerce -- will be closely watched in 2015. Asian consumers already buy more online than people from any other region of the world. This year, the Asia-Pacific region will account for online sales of $765 billion, or 48% of all retail e-commerce, according to estimates by New York-based marketing-data tracker eMarketer Inc. That is up from a 35% share in 2011, the year Asia became the biggest e-commerce market globally, and as much as North America and Europe combined. The two fastest-growing e-commerce markets also will be in Asia this year: India, with 45% growth, and Indonesia with 50%, eMarketer predicts. Investors already are trolling the region's economies looking for the next Alibaba. Masayoshi Son, the CEO of Japanese Internet and telecommunications conglomerate SoftBank Corp. and one of the earliest investors in Alibaba, last year said he is putting his money -- in the form of a $627 million investment from SoftBank -- on Indian online marketplace Snapdeal.com. Other investors are betting on Flipkart Internet Pvt., another Indian e-commerce company, which said it raised $700 million in a third round of financing at the end of December. Singapore-based Lazada Group, which is hoping to be the Amazon.com of Southeast Asia and runs the most-visited online retail site in Indonesia, said last month it secured around $249 million in new funds, led by Singaporean state investment company Temasek Holdings. Some of the region's biggest Internet companies are increasingly making their presence felt abroad, investing in Western firms and entering into partnerships that extend their reach overseas or fill out services they are offering to customers at home. Many are pushing beyond traditional e-commerce to become big online providers of everything from movies, music and games to taxi-hailing apps, sending ripples through Hollywood and Silicon Valley. Alibaba, which is already the world's biggest e-commerce company in terms of the value of goods that flow through its shopping sites, has been plowing money into videogame makers and film-production facilities. It is expected to acquire more foreign movies and videos to show over its networks this year. Chinese rival Tencent Holdings Ltd., which is the world's biggest videogame publisher and has an 18% stake in China's second-largest online shopping firm, JD.com Inc., is sealing distribution deals with Western film and music makers -- Phred Dvorak Price/Power Struggle For Computer Servers Amazon.com Inc., Facebook Inc. and Google Inc. save loads of money running their websites by spurning brand-name server computers in favor of inexpensive commodity-style systems. And the trend is reaching other parts of data-center operations, aided by new kinds of software. In addition to commodity servers, technology vendors are offering lower-price alternatives to specialized networking and data-storage equipment. Backers say the software-defined data center, as the trend is known, can deliver better performance as well as lower costs for corporate customers. Cheaper computing power has been key to the movement. Computer makers like Hewlett-Packard Co. and Dell Inc. long have based their servers on Intel's x86 chips, originally used in personal computers. But companies looking to build huge server farms later used the same technology without relying on big-name vendors. Google has built its own servers; Facebook uses low-cost x86 servers from Asian vendors like Quanta Inc. The Web firms found ways to sidestep other brand-name gear, a trend other businesses have begun to emulate. Some customers turned to software, developed at universities and refined by startups, that lets x86-based computers control networks in place of specialized gear from the likes of Cisco Systems Inc. and Juniper Networks Inc. That shift required fewer costly switching systems, and for those still needed, low-price alternatives emerged from Quanta and others vendors of low-end servers. Providers of so-called software-defined networking, or SDN, now include VMware Inc., the Nuage Networks unit of Alcatel-Lucent SA, Cumulus Networks and Big Switch Networks. In data storage, startups like Formation Data Systems plan to combine software and x86 chips in dedicated storage boxes that can replace high-end gear from vendors like EMC Inc. and NetApp Inc. Others, including Atlantis Computing and Nutanix, offer systems that store data on disk drives or flash memory chips built into individual x86 servers, the approach used by many Web companies. The software-defined versions of storage and networking gear aren't yet widely deployed. But Cisco, EMC and other incumbents already are using their own software to respond to the changes, and analysts expect more buying activity in 2015 as the trend creates new billion-dollar businesses. -- Don Clark Can McDonald's Get Back on a Roll? The battle for burger sales should intensify this year as struggling McDonald's Corp. grapples with changing consumer tastes, cooling sales -- and a more formidable competitor. McDonald's business suffered throughout 2014. In November, for example, monthly sales at established locations in the U.S. fell 4.6% -- its worst performance in more than 14 years. Under pressure from franchisees and some shareholders, the world's largest restaurant chain by revenue announced plans in December to upgrade its ingredients and add more customized ordering to appeal to younger consumers and to pare back a bloated menu that has slowed its service. The simple-yet-customizable approach has worked well for competitors like Chipotle Mexican Grill Inc. and Five Guys Holdings LLC, which are contributing to McDonald's problems. As McDonald's works to turn around its business, rival Burger King is digesting a major acquisition: Canadian coffee-and-doughnut chain Tim Hortons. The Burger King-Tim Hortons tie-up created a giant now called Restaurant Brands International Inc. with more than 18,000 restaurants in 100 countries, making it a fierce rival to McDonald's roughly 35,000 global locations. Brazilian private-equity firm 3G Capital, which bought Burger King in 2010 and engineered the Tim Hortons deal, is known for its strict cost-cutting and focus on profit-margin improvements. That could lure investors from McDonald's and other struggling stocks. On top of changes to its menu, McDonald's also is testing mobile ordering and payment. -- Annie Gasparro Net-Neutrality Battle Grows More Intense The debate about the openness of the Internet is only going to get more heated in the months to come. Late last year, President Barack Obama called for the Federal Communications Commission to reclassify broadband Internet service as a public utility to ensure the Internet remains open for all and not divided into fast and slow lanes. FCC Chairman Thomas Wheeler, who has shown to be decisive on big issues, plans to circulate a proposal next month regulating how broadband providers treat traffic on their networks. A vote could happen as early as the FCC's Feb. 26 open meeting. Any proposal would require a vote of majority of the agency's five commissioners to pass Net neutrality, the principle that all Internet traffic should be treated equally, has been the subject of much discussion over the years. Rules which prevent Internet companies from blocking, slowing or prioritizing certain Internet traffic were adopted in 2010. But in January 2014, Verizon Communications Inc. won a lawsuit overturning them, sending regulators back to the drawing board. Mr. Wheeler proposed a set of rules in May that he thought would stand up in court, but they were fiercely opposed by net neutrality advocates because the proposals would have allowed content companies to pay Internet providers for faster, more seamless delivery of their content online. If Internet service providers are allowed to sell freedom from congestion, advocates argue that incentivizes them to keep networks congested. ISPs have made clear they will sue if the FCC moves to regulate broadband Internet service as a Title II Telecommunications Service under the 1996 Telecom Act. Currently, it is considered an information service under Title I, making it subject to fewer rules. Net neutrality advocates have hinted they might sue over anything weaker. Internet providers say Title II would harm investment because it grants the FCC authority to set other rules, such as setting prices or forcing ISPs to allow rivals to use their wires to set up competing businesses. Stronger rules could galvanize the Republican-controlled Congress to rewrite telecommunications law to address the issue head on. -- Ryan Knutson and Gautham Nagesh
Subject: Wireless carriers; Telecommunications industry; Series & special reports; Industrywide conditions; New year
Location: United States--US
Classification: 9190: United States; 2310: Planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642116713
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642116713?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dow Off 300 in Global Rout --- Downside of Falling Oil Prices Hits the Shares of Caterpillar and Exxon Mobil
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Jan 2015: C.1.
Abstract:
A sharp drop in energy stocks dragged down the broader market, sending the Dow industrials to their biggest loss since early October, as investors recognized the downside of falling oil prices. Though lower gasoline prices are potentially good news for consumer stocks, the steep drop in oil prices has proved a drag on the broader stock market by threatening to curb profits within the once-booming energy sector, which has made up a growing part of the U.S. economy amid resurgent domestic oil production. [...]the slide in oil prices, while damping the outlook for energy companies, has been a boon for ordinary consumers by drastically lowering gasoline prices and giving a boost to consumer spending.
Full text: A sharp drop in energy stocks dragged down the broader market, sending the Dow industrials to their biggest loss since early October, as investors recognized the downside of falling oil prices. Though lower gasoline prices are potentially good news for consumer stocks, the steep drop in oil prices has proved a drag on the broader stock market by threatening to curb profits within the once-booming energy sector, which has made up a growing part of the U.S. economy amid resurgent domestic oil production. The Dow Jones Industrial Average sank 331.34 points, or 1.9%, to 17501.65, the biggest one-day loss for the blue chips since Oct. 9. The S&P 500 index shed 37.62 points, or 1.8%, to 2020.58, also its worst showing in three months and its fourth consecutive day of losses. The Nasdaq Composite Index declined 74.24, or 1.6%, to 4652.57. The losses continued in Asia early Tuesday. Japan was hardest hit, with the Nikkei stock average down 2.5% before the midday break as the yen strengthened. In commodity-sensitive Australia, the benchmark index fell 1.9%. Stocks were also down in Hong Kong, Singapore and South Korea. Shanghai was an exception, with stocks rising slightly. In the U.S. Monday, stocks headed lower from the opening bell and losses extended as the session wore on. Shares of energy companies led the push lower after U.S.-traded crude oil fell below $50 a barrel for the first time in nearly six years. U.S. oil futures finished the day 5% lower at $50.04 a barrel. "Oil is first and foremost on everybody's mind," said Jesse Lubarsky, senior vice president and equity trader at Raymond James in New York. The decline in oil prices has proved a mixed blessing for stocks in recent months. Energy shares in the S&P 500 dropped 4% Monday, and almost a quarter of the Dow's decline was due to losses among the shares of Chevron, Exxon Mobil and Caterpillar. The declines were even steeper among shares of energy companies with big U.S. operations, where once-high oil prices fueled a yearslong drilling boom. Shares of Continental Resources plunged $4.14, or 11%, to $34.65. Noble Energy slid 4.49, or 9.6%, to 42.39. The $1 billion SPDR Oil & Gas Exploration & Production exchange-traded fund lost 6.4%. Caterpillar, the heavy-equipment manufacturer and economic bellwether, posted the biggest loss in the blue-chip index. Its shares fell 4.85, or 5.3%, to 87.03 after analysts at J.P. Morgan Chase downgraded the outlook for the stock due to the company's exposure to the oil-and-gas exploration and infrastructure development. Shares of Chevron fell 4.50, or 4%, to 108.08, while Exxon Mobil sank 2.54, or 2.7%, to 90.29. Despite the scale of Monday's selloff, traders said that selling wasn't exceptionally heavy. Mr. Lubarsky described the stock selloff as "orderly," with investors recalibrating portfolios as the new year gets under way. "It's not like we're seeing massive selling coming through," he said. "People are turning on the engines and starting to figure out where we're headed for the next couple of months." Despite Monday's retreat, the Dow is just 3.1% from an all-time record reached in late December, and many investors remain optimistic on the outlook for stocks in 2015. The accelerating U.S. economy and expanding corporate profits are expected to give a boost to major stock benchmarks this year. And the slide in oil prices, while damping the outlook for energy companies, has been a boon for ordinary consumers by drastically lowering gasoline prices and giving a boost to consumer spending. "U.S. growth is actually getting better, not worse," said Jim Swanson, who manages about $2.6 billion in stocks and bonds at MFS Investment Management. He said he is tilting his portfolio toward U.S. stocks over other kinds of investments. "Oil is an input cost, and that [decline] is a help to all the regions that are foundering out there," he said. Also weighing on U.S. shares was spillover selling from European markets. The Stoxx Europe 600 index closed down 2.2%, amid fresh uncertainty over Greece's political future. With elections scheduled for later this month, investors continue to fret over the prospect of a new government that pushes back against Europe-imposed austerity measures. The worries sent the euro tumbling to a nine-year low against the dollar. The single currency traded late Monday at $1.1933. Investors flocked to the perceived haven of U.S. government debt, pushing the yield on the benchmark 10-year Treasury note to within striking distance of 2%. Late Monday, the yield fell by 0.085 percentage point to 2.038% as prices climbed by 24/32. Bond prices rise when yields fall. The last time the 10-year yield traded below 2% on an intraday basis was on Oct. 15, when yields fell as low as 1.873%. The slide in yields has caught investors by surprise, especially given signals from the Federal Reserve of its likely plans to raise interest rates sometime this year. Gold futures jumped $17.90, or 1.5%, to $1,203.90 an ounce. Auto makers' shares slid despite strong December sales reports. General Motors fell 51 cents, or 1.5%, to 34.33, while Ford Motor shares fell 60 cents, or 3.9%, to 14.76. Elsewhere, shares of American Airlines Group fell three cents, or 0.1%, to 53.88, reversing early gains, after the board of the Allied Pilots Association union agreed late Saturday to accept the final contract proposal made in November by the carrier and put it out to a membership vote.
Credit: By Dan Strumpf
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 6, 2015
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642116769
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642116769?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Briefly Slides Below $50; First Time Since 2009
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Jan 2015: C.4.
Abstract: None available.
Full text: Oil's selloff accelerated on Monday, with U.S. prices falling briefly below $50 a barrel for the first time since April 2009, on signs that supply will outstrip demand in coming months. Ample oil production, particularly in the U.S., and tepid demand growth have sent crude-oil prices plunging in recent months. Consumers are reaping the benefits, while oil-exporting nations are struggling to balance their fiscal budgets and oil companies are seeing their stock prices slump. Production has showed no sign of slowing despite spending cutbacks by many oil companies. Prices slid Friday on reports that Russian oil output hit post-Soviet records and Iraqi oil exports were at their highest since the 1980s. A number of U.S. producers already have responded to low prices by cutting their 2015 spending, but it could take months for supply growth to slow enough to reduce the global glut of oil, analysts say. Monday's decline, along with a drop in the euro amid concerns about Greece's political stability, rattled broader financial markets, with global stocks tumbling and investors rushing to the safety of gold, U.S. Treasurys and other sovereign bonds. Light, sweet oil for February delivery settled down $2.65, or 5%, at $50.04 a barrel on the New York Mercantile Exchange, after trading as low as $49.92 a barrel in intraday trading. Prices settled at the lowest level since April 28, 2009. Brent crude, the international benchmark, slid $3.31, or 5.9%, to $53.11, the lowest level since May 1, 2009. During the global recession in 2009, both U.S. and Brent prices dropped below $40 a barrel as global demand shrank. The recent price slide is different, analysts say, because it is more driven by unexpected supply growth than by plunging demand. Monday's declines took both oil benchmarks below psychologically important levels for many traders. Some analysts and investors have predicted that prices will level off above $50 a barrel, following a nearly 50% slide last year. But a persistent glut in the global market is fueling further declines this year. "We were eyeballing $50, low $50s, as a potential area where things would stabilize," said Lee Kayser, portfolio manager at Russell Investments in Seattle, which manages about $275 billion, including $1.4 billion invested in commodities. Mr. Kayser's funds have reduced their exposure to oil in the past six weeks, he said. Many estimates released last autumn said a lot of U.S. shale-oil drilling would become unprofitable around $60 a barrel, Mr. Kayser noted. "We're certainly in new territory here," he said. Saudi Arabia added to the downward pressure Monday by cutting February prices for its crude oil in the U.S., while raising them in Asia. Saudi price cuts to the U.S. in recent months have weighed on futures markets. Saudi Arabia is the biggest exporter in the Organization of the Petroleum Exporting Countries, which has declined to cut production in recent months as prices have dropped. Shares of energy companies in the S&P 500 tumbled alongside oil prices Monday, pushing down U.S. stock indexes. "When it rains, it pours," said Chip Hodge, senior managing director at John Hancock Financial Services, who helps oversee about $7 billion in energy-related investments. "It just seems that you get bad news on top of bad news" for oil prices, he said. Hedge funds and other money managers added bets that Nymex oil prices would fall and closed wagers on rising prices in the week ended Dec. 30, according to the most recent data from the U.S. Commodity Futures Trading Commission. Their aggregate position on rising oil prices fell to a three-week low. On Sunday, Citigroup lowered its Brent forecast for 2015 to $63 from $80 a barrel, and its projection for the U.S. benchmark to $55 from $72 a barrel. Oil traders are using options to benefit from drastic price moves, including a potential drop to $25 a barrel, said Ray Carbone, president of Paramount Options and a Nymex floor trader. "It's certainly a different world," he said. "We're quoting [prices] that, really, we haven't seen for a long time, since 2008-2009." --- Georgi Kantchev and Benoit Faucon in London, and Mercedes Alvaro in Quito contributed to this article. Credit: By Nicole Friedman
Subject: Crude oil; Commodity prices
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 6, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642116899
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642116899?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Slide on Oil Price; Government Bonds Surge as Investors Continue to Be Spooked by Relentless Slide in Price of Oil
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
The common currency has tumbled as expectations continued to build that the European Central Bank will have to expand the scope of its asset-purchase program to head off the threat of deflation--even to include sovereign bonds.
Full text: Sliding oil prices coupled with lingering uncertainty over the political future of Greece and its place in the eurozone, kept investors on edge Tuesday, pressuring stocks and boosting assets deemed safest during times of stress--such as government bonds. The Stoxx Europe 600, which was heavily sold off on Monday, ended the session down 0.7%, while France's CAC and London's FTSE shed 0.7% and 0.8% respectively. Germany's DAX closed largely flat on the day, having suffered its sharpest single-day percentage decline in over 10 months on Monday, while in southern Europe, Italy's MIB declined 0.3% and Spain's IBEX was down 1.2%. Greece's Athex Composite was closed in observance of a national holiday Tuesday, having tumbled more than 5% the previous session on fears that an antiausterity party may win a snap election later in the month, ushering in the possibility of a Greek exit from the euro. Economists attributed Tuesday's move to the decline in energy prices continuing to stoke fears of deflation. Although in the longer term many think the should give a boost to several major economies--particularly in the eurozone, which is a big energy importer--they say that the pace and steepness of the move is unsettling now. Brent crude for February delivery on London's ICE Futures Exchange dropped more than 3% to under $51.50 a barrel Tuesday--its lowest level since April 2009--and taking its 12-month loss to over 52%. On the New York Mercantile Exchange, meanwhile, light, sweet crude futures for delivery in February fell below $48 a barrel, down more than $2 from Monday's settlement. Also driving the bearish mood were reports that Russian oil output hit post-Soviet records and Iraqi oil exports were at their highest since the 1980s. In U.S. equity markets, the picture was similarly bleak. The S&P 500 fell 0.9% in late European trade, while government debt surged. The yield on the benchmark 10-year U.S. Treasury bond fell below 2% for the first time since October, reflecting a rise in bond prices. German Bunds also hit a fresh high, with the yield on the 10-year Bund slumping to just 0.459% Exacerbating investor caution, data on Tuesday showed manufacturing and services activity in the eurozone grew in December, but at a slower pace than expected. "The eurozone will look back on 2014 as a year in which recession was avoided by the narrowest of margins, but the weakness of the survey data suggests there is no guarantee that a renewed downturn won't be seen in 2015," said Chris Williamson, Markit's chief economist. Data released on Monday showing in December already added to the pressure on global markets. Eurozone inflation data is due Wednesday. In currency markets, the euro remained under pressure for most of the session, but stabilized in late trade at around $1.1953. The common currency has tumbled as expectations continued to build that the European Central Bank will have to expand the scope of its asset-purchase program to head off the threat of deflation--even to include sovereign bonds. The British pound also fell against the dollar after . Sterling was 0.6% lower at $1.5196. Currencies correlated with the price of oil--like Russia's ruble, the Norwegian krone, Canada's dollar and Nigeria's naira--all also fell Tuesday. Write to Tommy Stubbington at and Josie Cox at Credit: By Tommy Stubbington and Josie Cox
Subject: Petroleum industry; International finance; Prices; International trade; Recessions; Currency; Eurozone; Deflation
Location: France Italy Spain Germany Greece
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642140509
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642140509?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Slide on Oil, Economic Fears --- Global Markets Fall as Crude Dips Below $50, Data Hint at Deflation
Author: Blackstone, Brian; Stubbington, Tommy; Zeng, Min
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Jan 2015: A.1.
Abstract:
[...]it is all about inflation," said Anthony Cronin, a Treasury-bond trader at Societe Generale SA. "Falling oil prices are making investors nervous because the rest of the world is trying to avoid deflation."
Full text: Stock markets around the globe tumbled as oil briefly fell below $50 a barrel and fresh worries arose about Europe's economy, stoking fears of deflation. The euro dropped to its lowest level against the dollar since 2006, reflecting concerns Greece could be headed for a messy exit from the common currency. Adding to pressure on the euro was a round of tepid inflation readings. That data raised expectations the European Central Bank will soon beef up its stimulus program, which investors interpreted as bearish for the euro. Major stock indexes fell 3% in France and Germany and 2% in Britain. U.S. stocks slumped, with the Dow Jones Industrial Average sliding 331.34 points, or 1.9%, to 17501.65, its largest point and percentage drop since Oct. 9. The retreat was led by steep declines in energy shares and a lesser pullback in large banks. Investors snapped up safer assets such as gold, which rose 1.5%, and government bonds. The yield on the 10-year U.S. Treasury note slid to 2.038%, its lowest since May 2013. Yields fall when prices rise. Turmoil continued early Tuesday in Asia, with Japan leading losses. The Nikkei Stock Average fell 2.5% before midday. Roiling markets internationally were a host of economic and political indicators pointing to weakness and instability in Europe, despite signs of increased vigor in the U.S. economy. In Europe, an unexpectedly soft inflation report from Germany raised concerns the eurozone faces a potentially lengthy period of outright declines in consumer prices, which may make it harder for the region to recover from its lengthy economic slump. Low inflation or falling prices can have positive economic effects in the short term, particularly if they are driven by lower energy prices that free up cash to spend in other areas. The risk is that people expecting prices to hold steady or even fall might put off purchases or investments, leading to weaker economic activity overall. "The market fears that the oil-price decline is telling us something bad that we don't know about global growth," said Eric Stein, co-director of global income at money manager Eaton Vance Management, which has $297.7 billion in assets. Shares of several major European banks dropped 5% or more, highlighting concerns about the pace of growth on the Continent and the capacity of the eurozone's financial system to weather problems tied to Greece. Investors remain generally upbeat on the outlook for shares in the U.S. Even so, traders said drops of 3.1% in Morgan Stanley, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. on Monday underscore fears that economic growth and profits will disappoint investors who have enjoyed a five-year-long rally in the S&P 500. "In the end, it is all about inflation," said Anthony Cronin, a Treasury-bond trader at Societe Generale SA. "Falling oil prices are making investors nervous because the rest of the world is trying to avoid deflation." Expectations that central-bank action could be on the way this month have kept bond yields in the eurozone pinned close to record lows. Germany's 10-year bond was yielding just 0.5% Monday, while five-year German bonds yielded near zero, having dipped into negative territory Friday. Adding to Monday's tumult: German and French officials took a hard line against Greece, reigniting fears -- largely dormant over the past two years -- of a possible Greek exit from the euro. That is a destabilizing prospect for the 19-member currency bloc and its interconnected banks. "The No. 1 catalyst for this selloff is this nervousness about Greece," said James Swanson, a portfolio manager who oversees about $2.6 billion in stock and bond investments for MFS Investment Management. Greeks will vote in national elections Jan. 25, and a leftist party opposed to austerity measures imposed by the country's international creditors leads in the polls. Combined with worries about declining economic growth in other parts of the world, the revival of political and economic concerns in Europe underscored the risks confronting the $13.2 trillion eurozone economy just as the U.S. is showing signs of robust recovery. The annual rate of inflation in Germany, Europe's largest economy, was 0.1% in December, below economists' expectations and the weakest rise since the height of the global financial crisis in October 2009. Economists estimated eurozone-wide figures, due for release Wednesday, will show a 0.1% annual drop in consumer prices, which would be the first negative reading in more than five years and far below the ECB's target of just under 2%. Last week, Spain's statistics institute said consumer prices in the eurozone's fourth-biggest economy fell 1.1% in December from the previous year. The German price data supported mounting expectations in financial markets that the ECB will launch large purchases of government bonds as soon as its next policy meeting on Jan. 22 to avert a debilitating slide into deflation. "Clearly, there's a high probability of negative inflation for the eurozone," said ING Bank economist Carsten Brzeski in Frankfurt. "It's increasing pressure on the ECB to act." With their inflation mandate increasingly at risk, ECB officials have fanned out in recent weeks, putting markets on notice that they are ready to purchase government bonds, if needed, to raise the money supply. They have also indicated that the first quarter is the likeliest time for such a move to occur. ECB President Mario Draghi said in a German newspaper interview last week that, although the risk of persistent price declines is limited, it can't be ruled out. "If inflation remains low for a long time, people might expect prices to fall even further and postpone their spending," he said. The concerns in Europe come as the price of oil has fallen by more than half since June. Crude futures on the New York Mercantile Exchange traded as low as $49.92 a barrel in intraday New York trading Monday, the lowest since April 2009, before settling at $50.04, down 5% on the day. Though the decline in oil prices has led to lower gasoline prices and boosted the fortunes of ordinary consumers, it has also curbed profits for the once-booming energy sector, which has grown in recent years to become a bigger part of the U.S. economy. Shares of Caterpillar Inc. dropped 5.3% following a J.P. Morgan downgrade that cited the company's exposure to energy, construction and emerging markets, all of which are seen as slowing down. --- Nicole Friedman and Dan Strumpf contributed to this article. Credit: Brian Blackstone, Tommy Stubbington, Min Zeng
Subject: Securities markets; Economic conditions; Deflation; Investment policy
Location: United States--US Europe
Classification: 9190: United States; 9175: Western Europe; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics- -Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642141442
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642141442?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Drop and Economic Fears in Europe Hammer Stocks; Global Markets Fall as Crude Dips Below $50 and Data Hint at Deflation
Author: Blackstone, Brian; Stubbington, Tommy; Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract: None available.
Full text: Stock markets around the globe tumbled as a barrel and fresh worries arose about Europe's economy, stoking fears of deflation. The to its lowest level against the dollar since 2006, reflecting concerns . Adding to pressure on the euro was a round of tepid inflation readings. That data raised expectations the European Central Bank will soon beef up its stimulus program, which investors interpreted as bearish for the euro. Major stock indexes fell 3% in France and Germany and 2% in Britain. U.S. stocks slumped, with the Dow Jones Industrial Average sliding 331.34 points, or 1.9%, to 17501.65, its largest point and percentage drop since Oct. 9. The retreat was led by steep declines in energy shares and a lesser pullback in large banks. Investors snapped up safer assets such as gold, which rose 1.5%, and government bonds. The yield on the 10-year U.S. Treasury note slid to 2.038%, its lowest since May 2013. Yields fall when prices rise. Roiling markets internationally were a host of economic and political indicators pointing to weakness and instability in Europe, despite signs of increased vigor in the U.S. economy. In Europe, an unexpectedly soft inflation report from Germany raised concerns the eurozone faces a potentially lengthy period of outright declines in consumer prices, which may make it harder for the region to recover from its lengthy economic slump. Low inflation or falling prices can have positive economic effects in the short term, particularly if they are driven by lower energy prices that free up cash to spend in other areas. The risk is that people expecting prices to hold steady or even fall might put off purchases or investments, leading to weaker economic activity overall. "The market fears that the oil-price decline is telling us something bad that we don't know about global growth,'' said Eric Stein, co-director of global income at money manager Eaton Vance Management, which has $297.7 billion in assets. Shares of several major European banks dropped 5% or more, highlighting concerns about the pace of growth on the Continent and the capacity of the eurozone's financial system to weather problems tied to Greece. Investors remain generally upbeat on the outlook for shares in the U.S. Even so, traders said drops of 3.1% in Morgan Stanley, Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. on Monday underscore fears that economic growth and profits will disappoint investors who have enjoyed a five-year-long rally in the S&P 500. "In the end, it is all about inflation,'' said Anthony Cronin, a Treasury-bond trader at Société Générale SA. "Falling oil prices are making investors nervous because the rest of the world is trying to avoid deflation." Expectations that central-bank action could be on the way this month have kept bond yields in the eurozone pinned close to record lows. Germany's 10-year bond was yielding just 0.5% Monday, while five-year German bonds yielded near zero, having dipped into negative territory Friday. Adding to Monday's tumult: German and French officials took a hard line against Greece, reigniting fears--largely dormant over the past two years--of a possible Greek exit from the euro. That is a destabilizing prospect for the 19-member currency bloc and its interconnected banks. "The No. 1 catalyst for this selloff is this nervousness about Greece," said James Swanson, a portfolio manager who oversees about $2.6 billion in stock and bond investments for MFS Investment Management. Greeks will vote in national elections Jan. 25, and a leftist party opposed to austerity measures imposed by the country's international creditors leads in the polls. Combined with worries about declining economic growth in other parts of the world, the revival of political and economic concerns in Europe underscored the risks confronting the $13.2 trillion eurozone economy just as the U.S. is showing signs of robust recovery. The annual rate of inflation in Germany, Europe's largest economy, was 0.1% in December, below economists' expectations and the weakest rise since the height of the global financial crisis in October 2009. Economists estimated eurozone-wide figures, due for release Wednesday, will show a 0.1% annual drop in consumer prices, which would the first negative reading in more than five years and far below the ECB's target of just under 2%. Last week, Spain's statistics institute said consumer prices in the eurozone's fourth-biggest economy fell 1.1% in December from the previous year. The German price data supported mounting expectations in financial markets that the ECB will launch large purchases of government bonds as soon as its next policy meeting on Jan. 22 to avert a debilitating slide into deflation. "Clearly, there's a high probability of negative inflation for the eurozone," said ING Bank economist Carsten Brzeski in Frankfurt. "It's increasing pressure on the ECB to act." With their inflation mandate increasingly at risk, ECB officials have fanned out in recent weeks, putting markets on notice that they are ready to purchase government bonds, if needed, to raise the money supply. They have also indicated that the first quarter is the likeliest time for such a move to occur. ECB President Mario Draghi said in a German newspaper interview last week that, although the risk of persistent price declines is limited, it can't be ruled out. "If inflation remains low for a long time, people might expect prices to fall even further and postpone their spending. We are not there yet. But we need to tackle this risk," he said. The concerns in Europe come as the price of oil has fallen by more than half since June. Crude futures on the New York Mercantile Exchange traded as low as $49.92 a barrel in intraday New York trading Monday, the lowest since April 2009, before settling at $50.04, down 5% on the day. Though the decline in oil prices has led to lower gasoline prices and boosted the fortunes of ordinary consumers, it has also curbed profits for the once-booming energy sector, which has grown in recent years to become a bigger part of the U.S. economy. Shares of Caterpillar Inc. dropped 5.3% following a J.P. Morgan downgrade that cited the company's exposure to energy, construction and emerging markets, all of which are seen as slowing down. Nicole Friedman and Dan Strumpf contributed to this article. Write to Brian Blackstone at , Tommy Stubbington at and Min Zeng at Credit: Brian Blackstone, Tommy Stubbington, Min Zeng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642148297
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642148297?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shareholders Call for Board Changes at Forestar Group; Activist Investors Say Talks With Real-Estate, Oil-And-Gas Company Hit an Impasse
Author: Benoit, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
SpringOwl and Cove Street's letter, reviewed by The Wall Street Journal, demands an immediate halt to all nonessential oil spending and cost cuts in the business.
Full text: Some shareholders of real-estate and oil-and-gas company Forestar Group Inc. are calling for board changes after what they said was an impasse in their negotiations with the company. SpringOwl Asset Management LLC and Cove Street Capital LLC are preparing to release a public letter Tuesday criticizing Forestar's returns and board of directors. The move comes after the company announced last month it had hired bankers from Goldman Sachs Group Inc. for a review. The two shareholders together own about 7% of Forestar, which has a market capitalization of about $540 million. A company spokeswoman wasn't immediately able to comment. Forestar has previously said it has engaged with the duo and would continue talks aimed at increasing shareholder value. Forestar, which was spun out of Temple-Inland Inc. at the end of 2007, owns real-estate projects and acreage where natural resources are extracted. In recent years, it has expanded its natural-resources operations to become more involved in oil-and-gas production on its lands. That expansion has now hampered the company's results amid the collapse in oil prices since the summer. In early December, Forestar said it had hired Goldman to review its options for the oil and gas business; it didn't cite a specific reason behind the move. The company has also announced some corporate governance changes and a plan to repurchase $55 million in shares. SpringOwl is an activist-investor firm that formed after the recent merger of Ader Investment Management, founded by former stock analyst Jason Ader, and Cumberland Associates, a firm founded by Andrew Wallach. Cove Street, typically a passive investor, invested in Forestar and began talks with management two years ago, before teaming up with SpringOwl and going activist in November. The investors decided to go public with the letter and launch a website after private talks reached what they said was an impasse. Forestar shares fell 28% in 2014, including 13% in the last quarter, as oil prices continued dropping. Oil prices briefly dipped below $50 a barrel on Monday. In the third quarter of 2014, Forestar's real-estate segment increased its profit 21% to $16 million, while the oil-and-gas unit saw its profit drop 29% to $6 million. When announcing those results in November, the company pointed to the oil market. In a presentation discussing its sensitivity to oil prices, Forestar's charts only went as low as $70 a barrel. The company at the time said it didn't forecast oil being below $80 a barrel in the long term. SpringOwl and Cove Street's letter, reviewed by The Wall Street Journal, demands an immediate halt to all nonessential oil spending and cost cuts in the business. The letter calls the hiring of Goldman and a review "initial positive steps," but questioned whether the board and Goldman, its long-term banker, were best positioned for such a review. The activists stopped short of announcing a slate for the board, but said investors will need to choose between supporting the current board and accepting "fresh perspectives." Write to David Benoit at Credit: By David Benoit
Subject: Investments; Petroleum industry
Company / organization: Name: Forestar Group Inc; NAICS: 531120; Name: Temple-Inland Inc; NAICS: 522110, 551112, 327420, 321912, 322212; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jone s & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642178729
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642178729?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Singapore Races to Clean Up Oil Spill; Collision Between Oil Tanker and Cargo Ship Spilled Estimated 4,500 Tons of Oil Into Sea
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
The spill off Singapore is more than 10 times larger an last month that endangered the world's largest mangrove forest, and dwarfs the 50 tons spilled in the middle of last year near the popular tourist in Thailand. Since the 1990s, the International Maritime Organization has mandated that oil tankers be built with double hulls, which Mr. Graham says has led to a significant drop in the number of oil spills at sea since.
Full text: SINGAPORE--Singapore is scrambling to clean up one of Asia's largest oil spills in years after two ships collided late last week, amid worries the slick could spread to the nearby Indonesian tourist island of Bintan. A Libyan-registered oil tanker, the Alyarmouk, and a Singaporean cargo ship, the Sinar Kapuas, collided on Jan. 2 in the busy shipping lanes northeast of Singapore, spilling an estimated 4,500 tons of crude oil into the ocean. While there are no reports of further oil leakage, four vessels with equipment such as dispersants and skimmers have been deployed to the site to contain the oil spill, the Maritime and Port Authority of Singapore said. On Tuesday, the maritime authority said that satellite images taken and aerial surveillance didn't show any oil headed toward Bintan, but the agency also said it had reported a possible sighting of an oil patch northeast of the island to Indonesian authorities, without providing further details. Over the weekend the maritime authority said patches of oil may affect the northern parts of Bintan. Indonesia's Ministry of Environment didn't respond to queries seeking information about the impact of the oil spill on Bintan island. "By today's standards 4,500 tons is a significant spill and the largest in this region for some time," said Euan Graham, Senior Fellow at Singapore's S. Rajaratnam School of International Studies. He said Singapore's shipping lanes are well-regulated and have a good safety record, though this isn't the first collision involving a large oil tanker in area. "Rough seas in the area may have been a contributing factor to the collision, but may also assist in breaking up the spill," Mr. Graham said. The Alyarmouk was traveling from the port of Tanjung Pelapas in Malaysia to China, and the Sinar Kapuas was heading from Hong Kong to Singapore. The Alyarmouk is owned by a shipping group called V. Ships. The company didn't respond to queries seeking comment. Samudera Shipping Line Ltd., which owns the Sinar Kapuas, said it is currently investigating the cause of the collision and assessing the damage and impact on the group's financial performance if any. Oil spills in excess of 700 tons of oil are classified as large spills, according to the International Tanker Owners Pollution Federation Ltd., a nonprofit organization that tackles such disasters. The spill off Singapore is more than 10 times larger an last month that endangered the world's largest mangrove forest, and dwarfs the 50 tons spilled in the middle of last year near the popular tourist in Thailand. Since the 1990s, the International Maritime Organization has mandated that oil tankers be built with double hulls, which Mr. Graham says has led to a significant drop in the number of oil spills at sea since. A double-hull oil tanker has an extra layer in its outer structure that reinforces the body of the ship. The Alyarmouk, built in 2008, is a double-hulled vessel. Write to Eric Yep at Credit: By Eric Yep
Subject: Oil spills
Location: Asia
Company / organization: Name: International Tanker Owners Pollution Federation Ltd; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642178759
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642178759?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Related Currencies, Stocks Get a Fresh Pummeling; Russia's Ruble, Norway's Krone and Nigeria's Naira Weakened as Oil Prices Slipped Further
Author: Cox, Josie; Kolyandr, Alexander
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
[...]Berenberg has slashed its Russian GDP growth calls from -1% to -4% for 2015 and from 0% to -1.5% for 2016, while raising the inflation forecasts from 9% to 13% for 2015 and from 8.5% to 9% for 2016.
Full text: Currencies and stocks correlated with the price of oil were subjected to a fresh pummeling Tuesday, as the price of the commodity on global oversupply concerns. In Russia, where oil and gas exports account for about half of federal budget revenues, the ruble fell more than 4% against the U.S. dollar while the Norwegian krone declined around 1.2% against the euro, before slight recoveries. Further afield, Nigeria's naira lost 0.6%. Oil and natural gas make up almost all of Nigeria's exports and 80% of government revenue, according to the International Monetary Fund. The Canadian dollar, also a petrocurrency, fell around 0.2% against the greenback, as Brent crude for February delivery on London's ICE Futures Exchange dropped more than 2% to under $52 a barrel--its lowest level since April 2009. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February fell below $49 a barrel, down more than $2 from Monday's settlement. Driving the bearish mood were reports that Russian oil output hit post-Soviet records and Iraqi oil exports were at their highest since the 1980s. In addition, away from the supply side story, "the steepness of the decline in the price of crude oil is prompting heightened investor concerns that global demand may be weaker than expected," Lee Hardman, a currency economist at Bank of Tokyo-Mitsubishi UFJ said. Economists at Berenberg said in a note that the sustained fall in the price of oil means "much lower inflation and somewhat stronger gross domestic product growth for major oil-consuming countries, while spelling deep trouble for Russia." Accordingly, Berenberg has slashed its Russian GDP growth calls from -1% to -4% for 2015 and from 0% to -1.5% for 2016, while raising the inflation forecasts from 9% to 13% for 2015 and from 8.5% to 9% for 2016. In , with a high proportion of oil and gas companies relative to other indexes in Europe, underperformed the rest of the region, while Nigeria's all-share index declined 4% and Moscow's dollar-denominated RTS stock index fell more than 4% before recovering somewhat. The cost of insuring five-year Russian debt against default correspondingly surged to a near six-year high. It now costs investors around $642,000 a year to protect a notional $10 million of Russian debt for five years. On Monday evening, it cost just $550,000. Piotr Matys, rates strategist at Rabobank, said the increase in the cost of insuring the debt reflects growing concerns that Russia's credit rating may be downgraded. Last month, Standard & Poor's, which currently rates the country BBB-, warned that it may considering cutting Russia's credit rating to below investment grade as soon as January. "After all, reserves [have] plummeted precipitously and the economy is now widely anticipated to contract in 2015 following the sharp fall in oil prices and the emergency interest rate hike announced in December," Mr. Matys said. Debt issued by Russian companies such as Gazprom OAO and Lukoil OAO cheapened, too, while sovereign bonds issued by neighboring Kazakhstan were also suffering, credit strategists said. The Bank of Russia said Tuesday it had spent an additional $11.9 billion in December in an attempt to stem the ruble's decline, making the total sale of forex during the past year the equivalent of around $82.5 billion. However, neither this intervention nor the government's pressure on exporters to sell their foreign exchange revenues has been able to reverse the decline. Russia's stock market index has nearly halved since the start of 2014, and so has the value of the ruble against the dollar. One dollar bought 32.03 rubles a year ago, compared with 63.65 Tuesday. --Chiara Albanese and Georgi Kantchev contributed to this article Write to Josie Cox at and Alexander Kolyandr at Credit: By Josie Cox and Alexander Kolyandr
Subject: Petroleum industry; International finance; Canadian dollar; Economic development; Credit ratings; Crude oil prices; Gross Domestic Product--GDP; Natural gas utilities
Location: Nigeria United States--US Russia
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642178791
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642178791?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chevron Discovers New Oil in Deepwater Gulf; Anchor Prospect Is Company's Second Discovery in the Deepwater Gulf in Less Than a Year
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
Giant oil projects--spearheaded by Chevron, as well as Hess Corp. and Exxon Mobil Corp.--have been nearly half a decade after the Deepwater Horizon oil spill.
Full text: Chevron Corp. has discovered oil in its Gulf of Mexico Anchor well and will begin appraisal drilling in the coming months. Amid world-wide, this is Chevron's second discovery in the deepwater Gulf in less than a year. Chevron senior vice president Jay Johnson said that the Anchor discovery, along with last year's discovery at the Guadalupe well, are "significant finds," and that the company reported more than in 30 discoveries world-wide in 2014. Chevron currently has five deepwater drillships in the Gulf, two of which are focused on exploring potential sources of new oil. Giant oil projects--spearheaded by Chevron, as well as Hess Corp. and Exxon Mobil Corp.--have been nearly half a decade after the Deepwater Horizon oil spill. Companies have been drilling farther from shore and in deeper waters, leading to rising costs, some of which come from new regulations that aim to prevent another Deepwater disaster. Despite success in exploration, shares of Chevron have been down about 13% in the past 12 months as it, like other energy companies, has been hit by falling prices. Write to Angela Chen at Credit: By Angela Chen
Subject: Petroleum industry; Oil spills
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Hess Corp; NAICS: 447110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuestdocument ID: 1642335484
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642335484?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Steel Lays Off 756, Blaming Low Oil Prices; Steel Maker Idles Ohio Plant That Makes Pipes for Oil Exploration, Drilling
Author: Miller, John W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
Chief Executive Mario Longhi told analysts in October that, while the swoon in global oil prices wouldn't affect the fourth quarter, "the recent turmoil in the crude oil markets could have an impact on the level of drilling activity as we move into the new year."
Full text: PITTSBURGH--U.S. Steel Corp. said it will idle plants in Ohio and Texas and lay off 756 workers, becoming one of the first big U.S. industrial casualties of the recent collapse in global oil prices. The plants make steel pipe and tube for oil and gas exploration and drilling. With oil prices more than 5½-year lows and a barrel, energy companies have far less incentive to drill for new supply, reducing demand for the plant's products. The Lorain, Ohio operation, which will shed 614 workers, produces more than 700,000 tons of pipe a year. Houston, where 142 will be laid off, generates over 100,000 tons annually. "The company has suddenly lost a great deal of business because of the recent downturn in the oil industry," Tom McDermott, president of United Steelworkers local 1104 in Lorain wrote to workers, in a letter reviewed by The Wall Street Journal. "What appeared just a few short weeks ago as being a productive year, [with new hires in December and extra turns going on], has most abruptly turned sour." The union declined further comment. The weakness could extend beyond U.S. Steel. In the last five years, U.S., French and Chinese companies have built up millions of tons of new capacity from Ohio to Texas, lured by a resurgent American auto industry and the country's booming oil and gas sector. A subsidiary of France's Vallourec SA, for example, built a $650 million, 500,000-ton-per-year mill in Youngstown, Ohio. The company didn't return calls seeking comment. Other steelmakers with key U.S. operations include Nucor Corp, Steel Dynamics Inc., ArcelorMittal and AK Steel Holding Corp. The so-called oil country tubular goods, or OCTG, industry has been substantially built up in the past few years to provide pipe and tube for the boom in drilling for shale gas and new oil in the Gulf of Mexico. U.S. Steel, which is trying to reverse five straight years of losses, including a $1.7 billion deficit loss in 2013, has been among those betting most heavily on OCTG. The company's tubular division posted an operating profit of $140 million during the first nine months of 2014, up from $23 million over the same period in 2010. Steel pipe and tubes have been "the company's most reliable profit driver," said analyst Sam Dubinsky of Wells Fargo. U.S. Steel Chief Executive Mario Longhi told analysts in October that, while the swoon in global oil prices wouldn't affect the fourth quarter, "the recent turmoil in the crude oil markets could have an impact on the level of drilling activity as we move into the new year." He added that "we are at a transitional moment that is going to take a little bit of time for people to sort out exactly where this is going to go." Oversupply in the market has been exacerbated by huge flows of steel imports into the U.S. Overall steel imports were up 35% to 38 million tons during the first 10 months of 2014, according to Global Trade Information Services. The round of layoffs at U.S. Steel will begin on March 8, "with additional layoffs occurring through May 2015," a company official wrote to the union. Workers for U.S. Steel in Lorain said they would find out who is being laid off at an evening meeting Wednesday. Last summer, U.S. Steel and others won import tariffs on imports of OCTG from South Korea and other exporting countries. But that won't be enough to prop up the industry in the face of falling oil prices. Last year, as it pursued trade import tariffs, U.S. Steel curtailed operations at plants in McKeesport, Pa., and Bellville, Texas, citing competition from foreign imports. They have yet to be restarted, a spokeswoman said Tuesday. Spending on oil exploration and production is expected to fall 20% this year compared to last, according to Susan Murphy, publisher of the OCTG Situation Report. She expects land oil rigs to decline by up to 500 in 2015. Write to John W. Miller at Credit: By John W. Miller
Subject: Steel industry; Petroleum industry; Drilling
Location: Ohio
People: Longhi, Mario
Company / organization: Name: United Steelworkers of America; NAICS: 813930; Name: US Steel Corp; NAICS: 331110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642335543
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642335543?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gold Hits Three-Week High as Investors Run for Cover; Tumbling Oil Prices Sparking Concerns About Global Economy
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
While lower oil prices would free up cash for consumers to spend in other areas and reduce transportation costs, investors are concerned that the slide is signaling potential problems with global growth.
Full text: Gold prices rose to their highest level in three weeks Tuesday, as plunging oil prices sparked worries about the health of the global economy, drawing investors to the precious metal. Gold for February delivery, the most actively traded contract, ended 1.3% higher at $1,219.40 a troy ounce, the highest level since Dec. 12 on the Comex division of the New York Mercantile Exchange. Oil prices continued to slide Tuesday, with the U.S. benchmark trading below $50 a barrel, on new indications that top exporter Saudi Arabia is unwilling to cut production to reduce a global glut of oil. While lower oil prices would free up cash for consumers to spend in other areas and reduce transportation costs, investors are concerned that the slide is signaling potential problems with global growth. Those investors are seeking gold in the belief that it will hold its value better than other assets if the global economy takes a turn for the worse. Investors are also worried that a Greek antiausterity party--which has threatened to tear up the economic overhaul that accompanied the country's international bailout--could assume power in general elections later this month. Such a move could shake up the eurozone. "There is very much of a flight to safety going on, and that's offsetting the threat of an interest-rate hike from the Federal Reserve," said Bob Haberkorn, a broker at RJO Futures. Gold prices edged lower in 2014, as investors prepared themselves for the Fed to start raising rates this year. Gold tends to struggle against yield-bearing investments when interest rates rise. Other precious metals rose along with gold. Silver for March delivery ended up 2.6% at $16.637 a troy ounce, a three-week high. April platinum also traded at its highest level since Dec. 12, closing up 0.9% at $1,221.40 a troy ounce. Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Subject: Gold markets; Statistical data
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642346550
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642346550?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crescent Point Scales Back 2015 Spending Plans on Oil Woes; Company Is Pursuing Options To Cut Costs
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
Canadian oil producer Crescent Point Energy Corp. on Tuesday cut its capital-spending budget for 2015 by 28% from 2014 levels due to slumping oil prices, and said it is pursuing options to cut costs.
Full text: Canadian oil producer Crescent Point Energy Corp. on Tuesday cut its capital-spending budget for 2015 by 28% from 2014 levels due to slumping oil prices, and said it is pursuing options to cut costs. Calgary, Alberta-based Crescent Point, like many of its peers in the oil patch, is scaling back spending plans to combat the more-than-50% drop in oil prices since last June. U.S. prices briefly fell below $50 a barrel Monday for the first time since April 2009, and , recently trading below $49 a barrel. Surging oil production in North America and a decline in global demand have led energy producers to rethink investment plans. In mid-December, Crescent Point's Canadian peers, Husky Energy Inc. and Penn West Petroleum Ltd., for 2015 due to the dramatic plunge in oil prices. Crescent Point, which called its budget plans "conservative and disciplined," also said it has increased its 2015 oil hedges to more than 50% of production at prices averaging above 90 Canadian dollars ($76.60) a barrel. "Oil prices have always been cyclical. We've been through downturns before and have not only protected our dividend and balance sheet during those times, but have come out of them even stronger than before," Chief Executive Scott Saxberg said in a statement. "We expect this cycle to be no different." Crescent Point, a shale oil producer with assets in the Bakken region in Saskatchewan and North Dakota, expects to spend C$1.45 billion this year, with about 88% allocated to drilling and completions. Average production is expected to increase 9%, to 152,500 barrels of oil equivalent a day. The company said if lower oil prices persist through 2015, its budget is flexible to allow it to manage its balance sheet and dividend. Options include further reducing capital spending in the second half of the year and reducing facilities spending, it noted. Crescent Point said its budget assumes an initial 10% reduction to service costs, but noted more cost cuts are "very likely" if low oil prices continue. It said it is "actively pursuing" various options to lower costs. Write to Judy McKinnon at Credit: By Judy McKinnon
Subject: Budgets; Petroleum industry; Balance sheets; Capital expenditures; Cost reduction; Petroleum production
Location: Calgary Alberta Canada United States--US North America
Company / organization: Name: Penn West Petroleum Ltd; NAICS: 211111; Name: Husky Energy Inc; NAICS: 213111; Name: Crescent Point Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642346875
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642346875?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Yen Strengthens as Jittery Investors Seek Safe Assets; Political Uncertainty in Greece and Plunging Oil Prices Weigh on Sentiment
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract: None available.
Full text: The Japanese yen rose against its rivals on Tuesday as concerns about political instability in Greece and about the effects of plunging oil prices on global growth pushed investors into assets perceived as safe. The U.S. dollar fell 0.9% to ¥118.53, its lowest level in almost three weeks. The euro slumped 1.3% to a two-month low of ¥140.98, while the British pound dropped 1.5% to ¥179.89, its weakest since Nov. 3. Oil prices continued their monthslong descent Tuesday, driven by forecasts that heavy supplies will grow. Prices fell 4.2% to below $48 a barrel on the New York Mercantile Exchange, and almost 4% to about $51 a barrel on the ICE Futures Europe exchange. Cheaper crude has battered oil-producing countries. It has also joined falling commodity prices to weigh on inflation expectations for the largest economies around the world, many of which have been struggling to boost consumer prices and growth. In addition, investors are worried that an early election in Greece later this month could lead to the country's exit from the eurozone. Greece failed to elect a new president late last year, prompting a snap election on Jan. 25 that polls say could lead to the ascension of the opposition Syriza party, which would then be expected to implement policies that would run afoul of the country's bailout program. The turmoil and global-growth tremors have pushed investors into assets that typically hold their value in turbulent times, such as U.S. Treasurys, gold and the yen. The dollar has also been considered a haven asset but tends to struggle against the Japanese currency when Treasurys rally, said Elsa Lignos, senior currency strategist at RBC Capital Markets. The yield on the 10-year U.S. Treasury note fell to 1.942% Tuesday from 2.038% a day earlier. Bond yields fall as prices rise. "There's been a real move lower in risky assets," Ms. Lignos said. "Liquidity is thin; there's quite a scramble for liquidity in Treasurys. And in (foreign exchange), the one clear beneficiary is the yen." The dollar fell markedly against the Japanese currency after measures for U.S. services purchasing managers in December and factory orders in November came in softer than expected. The U.S. data aren't likely to send the dollar decisively lower for long, though, as investors await the December employment report, which is expected to give investors more direction on the greenback. In other trading, the euro fell 0.3% versus the dollar at $1.1894, its weakest since June 2010. Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164238 5828
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642385828?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Morning Briefing: U.S. Stocks Fall Alongside Oil Prices
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract: None available.
Full text: MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET) LAST CHANGE % CHG 17371.64 -130.01 -0.74% 4592.74 -59.84 -1.29% 2002.61 -17.97 -0.89% 16883.19 -525.52 -3.02% 23485.41 -235.91 -0.99% 3351.45 0.93 0.03% 26987.46 -854.86 -3.07% 5364.8 -85.5 -1.57% 6417.69 0.53 0.01% PRICE CHG YIELD 2/32 0.633 13/32 1.48 26/32 1.9444 1/4 2.727 -26/32 3.68 -1/32 7.9 13/32 0.286 20/32 0.456 LAST(MID) CHANGE 0.8115 0.003 118.95 -0.68 1101.35 -8.58 6.2123 -0.0096 1.1902 -0.0031 83.88 0.05 LAST CHANGE % CHG48.94 -1.1 -2.20% 53.07 -1.1 -2.03% 1209.9 5.9 0.49% SNAPSHOT: U.S. stocks tumbled for a second straight day alongside oil prices, whose months-long selloff continued on expectations of growing supplies and broad concerns about the pace of global growth. U.S. Treasurys, gold and the yen rose as investors fled to safe havens. OPENING CALL: On a quiet day for Asian data, Wednesday brings the release of Australia's Performance Services Index figure for December. Services PMI in Australia increased to 43.80 points in November from 43.60 in October, while a reading of 45.14 is forecast for December. A reading above 50 points indicates that services activity is expanding. EQUITIES: U.S. stocks fell, with the S&P 500 marking its longest losing streak in more than a year. Major U.S. stock indexes have had their worst start to a year since the financial crisis year of 2008. The declines have been fueled by the slide in crude-oil prices that has raised investor worries about global economic growth. European shares are also down for the year, as analysts fret about Greece's political future ahead of general elections later this month. Investors came into 2015 ready for more gains in U.S. stocks. But instead, they have been playing defense, driving up prices of safe-haven investments like Treasury bonds. On Tuesday, that dash for safety sent the yield on the 10-year note briefly below 1.9% and supported gains in shares of utilities and telecommunications companies. "[Investors] are rotating into more defensive sectors and...minimizing their bets" on riskier investments, said Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. The Dow Jones Industrial Average fell 130.01 points, or 0.74%, to 17371.64. The S&P 500 fell 17.97 points, or 0.9%, to 2002.61. That was the fifth-straight decline for the index, the most consecutive losses since December 2013. The Nasdaq Composite lost 59.84 points, or 1.29%, to 4592.74. The energy sector of the S&P 500 fell 1.3%, erasing an early advance. The sector has tumbled 24% since mid-June, as oil prices have slid more than 50%. Financial stocks made the steepest slide, however, dropping 1.5%. Banks are expected to benefit from rising interest rates, traders said, so Tuesday's decline in the 10-year Treasury yield weighed on the sector. Asian stocks fell Tuesday, led by a 3% decline in Japan's Nikkei Stock Average. The commodity-sensitive Australian benchmark index lost 1.6%. FOREX: The Japanese yen rose against its rivals as concerns about political instability in Greece and about the effects of plunging oil prices on global growth pushed investors into assets perceived as safe. The U.S. dollar fell 0.9% to Yen118.53, its lowest level in almost three weeks. The euro slumped 1.3% to a two-month low of Yen140.98, while the British pound dropped 1.5% to Yen179.89, its weakest since Nov. 3. Cheaper crude has battered oil-producing countries. It has also joined falling commodity prices to weigh on inflation expectations for the largest economies around the world, many of which have been struggling to boost consumer prices and growth. In addition, investors are worried that an early election in Greece later this month could lead to the country's exit from the eurozone. Greece failed to elect a new president late last year, prompting a snap election on Jan. 25 that polls say could lead to the ascension of the opposition Syriza party, which would then be expected to implement policies that would run afoul of the country's bailout program. The turmoil and global-growth tremors have pushed investors into assets that typically hold their value in turbulent times, such as U.S. Treasurys, gold and the yen. The dollar has also been considered a haven asset but tends to struggle against the Japanese currency when Treasurys rally, said Elsa Lignos, senior currency strategist at RBC Capital Markets. "There's been a real move lower in risky assets," Ms. Lignos said. "Liquidity is thin; there's quite a scramble for liquidity in Treasurys. And in (foreign exchange), the one clear beneficiary is the yen." BONDS: Global government bond yields tumbled to fresh lows as deflation fears boosted demand for haven assets. The yield on the 10-year U.S. Treasury note fell to 1.964% compared with 2.038% on Monday. It marks the lowest closing since May 2013 and the first time the yield closed below 2% since that month. The yields on the 10-year government bonds in Japan and Germany settled at record lows of 0.295% and 0.45%, respectively. The yield on the 10-year U.K. government bond fell to 1.581%, the lowest level since 2012. Strong demand for haven bonds underscores uncertainty over the global growth outlook, even as the U.S. economy has gained traction and the Federal Reserve has ended its monthly bond buying in October. Lower bond yields translate into higher prices and carry some benefits for the economy. Lower bond yields means lower mortgage rates, a boon for homeowners looking to refinance their home loans at lower rates, and lower rates on other loans to consumers and businesses. "The path of least resistance for the bond market is to lower yields," said Erik Schiller, senior portfolio manager on global government bonds at Prudential Financial's fixed-income unit, which oversees $535 billion. "The current level of yields reflects a confluence of global factors that include relatively low growth" and "very benign inflation." COMMODITIES: Oil prices slumped sharply on expectations of growing supplies and broad concerns about the pace of global growth. Light, sweet oil for February delivery fell $2.11, or 4.2%, to $47.93 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $2.01, or 3.8%, to $51.10 a barrel on ICE Futures Europe. Both contracts hit their lowest prices since April 2009. The selloff accelerated as traders looked ahead to weekly U.S. inventory data, which are expected to show that crude-oil supplies grew last week. New indications that top exporter Saudi Arabia is unwilling to cut production also weighed on the market. The price drop roiled other markets. Currencies of oil-producing nations fell against the dollar and shares of energy companies slid. Bond yields fell to fresh lows as investors, worried about deflation, piled into safer assets. Oil futures have plunged for months on concerns that the global market is oversupplied, largely due to unexpectedly strong U.S. output. Demand growth also has fallen short of expectations. "Oil is the thing that's pretty much driving all the financial markets right now," said Jeffrey Sherman, portfolio manager at DoubleLine Capital, which oversees about $64 billion in assets. "This is essentially the market realizing that global growth is probably slowing." Gold prices rose to their highest level in three weeks, as plunging oil prices sparked worries about the health of the global economy, drawing investors to the precious metal. TODAY'S HEADLINES: Obama Threatens to Veto Keystone Pipeline Bill President Barack Obama is prepared to veto any bill approving the Keystone XL pipeline, the White House said, calling the legislation an unwelcome interference with the current administration review. Verizon CEO Dismisses Deal Talk, Seeks Media Partnerships Verizon Communications Chief Executive Lowell McAdam said the company isn't in talks to buy AOL, and that he is more likely to enter partnerships with media companies than try to acquire them. U.S. Service-Sector PMI Slows in December U.S. nonmanufacturers throttled back activity last month and input prices contracted for the first time in more than five years, according to data released by the Institute for Supply Management. Obama to Name Landon to Fed Board President Barack Obama announced his intention to nominate retired Bank of Hawaii CEO Allan Landon to fill an opening on the Federal Reserve's Board of Governors. Boehner Elected House Speaker for Third Term House Republicans re-elected John Boehner for a third term as House speaker over the objections of a band of frustrated conservatives lobbying for a new leader. Investors Pull $26.7B From Pimco Funds in December Investors pulled a net $150 billion from Pacific Investment Management Co.'s mutual funds in 2014, the largest annual exodus ever experienced by a mutual fund firm, according to preliminary figures from fund research firm Morningstar. Boeing Delivers Record Number of Jets in 2014 Boeing reported record annual orders and deliveries of its commercial jetliners alongside a drop in deal cancellations, easing investor concerns about a market bubble as the company prepares for another boost in production. Finra to Probe Securities-Backed Loans Borrowing against the value of securities, bank-loan funds, and alternative mutual funds are the latest products that Wall Street's self-regulator has put on its watch list for 2015. Medtronic, Covidien Shareholders Approve Deal Medtronic shareholders approved the company's $43 billion acquisition of Ireland's Covidien, putting the deal on track to close by the end of January or early February. J.C. Penney Reports Strong Sales Growth J.C. Penney said sales at its existing stores rose 3.7% over the holiday period from a year ago and should hit the high end of its estimated range for the quarter. Shares surged 20% after hours. RECENT DJ DOMINANTS: Rising Dollar Presses Asian Borrowers Monsanto Must Keep Planting Seeds -- Ahead of the Tape Verizon Has More Pressing Calls to Make Than AOL -- Heard on the Street Brevan Howard Hedge Fund Extends Streak of Yearly Gains Former Deutsche Bank Trader Strikes $50 Million Deal for New Hedge Fund TODAY'S CALENDAR (Times in GMT, followed by country and event) 2230 AUS Dec Australian PSI 0001 UK Dec Shop Price Index 0700 GER Nov Retail Trade 0800 EU ECB Governing Council non-monetary policy meeting 0815 HK Dec Foreign Exchange Reserves 0900 SIN Dec Official Foreign Reserves 0900 MAL Dec International Reserves, end of month 0900 UK Dec UK monthly car registrations figures 0900 ITA Nov Unemployment 0900 GER Dec Labour market statistics (incl unemployment) 0910 EU Dec Eurozone Retail PMI 0930 UK Dec Narrow money (Notes & Coin) and reserve balances 1000 ITA Dec Provisional CPI 1000 ITA Dec Cities CPI 1000 EU Nov Unemployment 1000 EU Dec Flash Estimate euro area inflation 1001 MAL Nov External Trade 1200 US 12/26 MBA Weekly Mortgage Applications Survey 1315 US Dec ADP National Employment Report 1330 US Nov U.S. International Trade in Goods & Services 1330 CAN Nov International merchandise trade 1500 US Dec Online Help Wanted Index 1500 CAN Dec Ivey Purchasing Managers Index 1500 US IMF Multi-Country Report on Housing Recoveries: Cluster 1530 US 01/02 EIA Weekly Petroleum Status Report 1900 US Federal Open Market Committee meeting minutes and economic forecast 2100 US World Bank's Global Economic Prospects report - chapters 3 and 4 released 2230 US FRB Chicago President Charles Evans speech at University of Chicago speaker series
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642428133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642428133?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Deep Debt Keeps Oil Firms Pumping; Producers Have Increased Their Borrowings by 55% Since 2010
Author: Ailworth, Erin; Gold, Russell; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Jan 2015: n/a.
Abstract:
"To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley. The group doesn't include Exxon Mobil Corp. and Chevron Corp., which also make money from refining, chemicals and pipelines.
Full text: American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June. But signs of strain are building in the oil patch, where revenue growth hasn't kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment. Energy analysts warn defaults could be coming. "The group is not positioned for this downturn," said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "There are too many ugly balance sheets." The industry is also expecting a wave of asset sales and consolidations, though it may not gain momentum until the price of oil stabilizes and values become clearer. Bankers say companies are reluctant to get acquired with their stock prices under pressure, as they fear they could be selling low, and buyers don't want to overpay if prices fall further. And mergers aren't a panacea. "To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley. "You can't expect two companies with big problems with their cash flows to come together and mitigate that problem." Instead, the investment bank is "thinking of more creative ways of getting capital to clients," he said, for example through private injections of capital. Before crude prices began falling, U.S. oil and gas producers were able to acquire leases and drill wells even if that meant outspending their incomes. Debt was used to bridge the cash shortfall so that companies could develop oil fields in Texas, North Dakota and newer locations including Colorado. In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ. As of their latest quarter, such companies had $199 billion of combined total debt. The group doesn't include Exxon Mobil Corp. and Chevron Corp., which also make money from refining, chemicals and pipelines. Oil and gas producers' revenues grew more slowly--rising 36% to $239.4 billion in the 12 months ended September 2014 versus $175.8 billion in 2010. But oil is languishing at five-year lows--the U.S. benchmark fell to $47.93 on Tuesday--and natural-gas prices have fallen by 40% since June from about $4.70 per million British thermal units to less than $3. Despite the cold winter, companies in the U.S. have been pumping enough gas to fill up storage around the country to high levels not seen in nearly five years. Companies are focusing on cash conservation, balance sheet mending and meeting lending covenants. "Having control of your debt and ensuring you have a good level of liquidity going into this commodity cycle is obviously important to us," said Harold Hickey, president and chief operating officer of EXCO Resources Inc. of Dallas. He said the company had been working to shore up its balance sheet since before the crude price collapse. The company, which produces mostly natural gas, had revenue of $713 million for the 12 months ended September. It has long carried a heavy debt load, which hit nearly $1.9 billion at the end of 2013. Mr. Hickey said the company cut its long-term debt to $1.35 billion by September 2014, in part by selling some assets, and in December suspended its dividend. Even so, the company's shares have cratered, plunging from over $6 apiece last spring to under $2 on Tuesday. While no energy company has defaulted on its bonds or other debt, CreditSights Inc. has identified about 25 at risk, because of small asset bases, high debt and low cash flow. The list is headed by Sabine Oil & Gas LLC and Forest Oil Corp.--which merged last month into Sabine Oil & Gas Corp.--and closely held Venoco Inc., which focuses on California. None responded to requests for comment. Quicksilver Resources Inc. would also be on the list except that it was already trying to restructure its debt out of court, said Brian Gibbons, the research firm's senior oil and gas analyst. Moody's downgraded Quicksilver deeper into junk status in September, noting the company had been failing at its attempts to sell assets in order to help it refinance and cut outstanding debt. Quicksilver didn't reply to a message seeking comment. Lenders are already doling out tough love to companies, said Chad Mabry, an analyst who follows small and midsize producers for investment bank MLV & Co. Some lenders are asking producers to provide plans for how they will handle further drops in the price of crude, he said, while others are pressing for asset sales. "The bear call has been right so far," Mr. Mabry said. "Without being able to really call a bottom yet, it's hard to have much conviction to the long side, to the bull case." The upshot of cash conservation and higher borrowing costs will be less money spent on producing oil and natural gas. However, it is unclear whether overall U.S. output will decline, since some larger producers still expect to produce more oil and natural gas in 2015 than last year by focusing on their best drilling prospects. Concho Resources Inc. said late Monday that it was cutting its capital spending budget by a third, to $2 billion. But the Midland, Texas, company estimates production will rise 16% to 20% over 2014's level. Dana Mattioli and Dan Molinski contributed to this article. Write to Erin Ailworth at and Russell Gold at Corrections & Amplifications Antero Resources Corp.'s net debt is equal to four times its Ebitda for the 12 months ended in September. A graphic that appeared with the article incorrectly gave the ratio as 6.2. (Jan. 12, 2015) Credit: By Erin Ailworth,Russell Gold and Timothy Puko
Subject: Petroleum industry; Balance sheets; Debt restructuring; Investment banking; Crude oil prices; Natural gas utilities
Location: United States--US California Texas
Company / organization: Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Chevron Corp; NAICS: 324110, 211111; Name: Robert W Baird & Co; NAICS: 523110, 523120; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644537761
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644537761?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Deep Debt Keeps Oil Firms Pumping; Producers Have Increased Their Borrowings by 55% Since 2010
Author: Ailworth, Erin; Gold, Russell; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
"To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley. The group doesn't include Exxon Mobil Corp. and Chevron Corp., which also make money from refining, chemicals and pipelines.
Full text: American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June. But signs of strain are building in the oil patch, where revenue growth hasn't kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment. Energy analysts warn defaults could be coming. "The group is not positioned for this downturn," said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "There are too many ugly balance sheets." The industry is also expecting a wave of asset sales and consolidations, though it may not gain momentum until the price of oil stabilizes and values become clearer. Bankers say companies are reluctant to get acquired with their stock prices under pressure, as they fear they could be selling low, and buyers don't want to overpay if prices fall further. And mergers aren't a panacea. "To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley. "You can't expect two companies with big problems with their cash flows to come together and mitigate that problem." Instead, the investment bank is "thinking of more creative ways of getting capital to clients," he said, for example through private injections of capital. Before crude prices began falling, U.S. oil and gas producers were able to acquire leases and drill wells even if that meant outspending their incomes. Debt was used to bridge the cash shortfall so that companies could develop oil fields in Texas, North Dakota and newer locations including Colorado. In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ. As of their latest quarter, such companies had $199 billion of combined total debt. The group doesn't include Exxon Mobil Corp. and Chevron Corp., which also make money from refining, chemicals and pipelines. Oil and gas producers' revenues grew more slowly--rising 36% to $239.4 billion in the 12 months ended September 2014 versus $175.8 billion in 2010. But oil is languishing at five-year lows--the U.S. benchmark fell to $47.93 on Tuesday--and natural-gas prices have fallen by 40% since June from about $4.70 per million British thermal units to less than $3. Despite the cold winter, companies in the U.S. have been pumping enough gas to fill up storage around the country to high levels not seen in nearly five years. Companies are focusing on cash conservation, balance sheet mending and meeting lending covenants. "Having control of your debt and ensuring you have a good level of liquidity going into this commodity cycle is obviously important to us," said Harold Hickey, president and chief operating officer of EXCO Resources Inc. of Dallas. He said the company had been working to shore up its balance sheet since before the crude price collapse. The company, which produces mostly natural gas, had revenue of $713 million for the 12 months ended September. It has long carried a heavy debt load, which hit nearly $1.9 billion at the end of 2013. Mr. Hickey said the company cut its long-term debt to $1.35 billion by September 2014, in part by selling some assets, and in December suspended its dividend. Even so, the company's shares have cratered, plunging from over $6 apiece last spring to under $2 on Tuesday. While no energy company has defaulted on its bonds or other debt, CreditSights Inc. has identified about 25 at risk, because of small asset bases, high debt and low cash flow. The list is headed by Sabine Oil & Gas LLC and Forest Oil Corp.--which merged last month into Sabine Oil & Gas Corp.--and closely held Venoco Inc., which focuses on California. None responded to requests for comment. Quicksilver Resources Inc. would also be on the list except that it was already trying to restructure its debt out of court, said Brian Gibbons, the research firm's senior oil and gas analyst. Moody's downgraded Quicksilver deeper into junk status in September, noting the company had been failing at its attempts to sell assets in order to help it refinance and cut outstanding debt. Quicksilver didn't reply to a message seeking comment. Lenders are already doling out tough love to companies, said Chad Mabry, an analyst who follows small and midsize producers for investment bank MLV & Co. Some lenders are asking producers to provide plans for how they will handle further drops in the price of crude, he said, while others are pressing for asset sales. "The bear call has been right so far," Mr. Mabry said. "Without being able to really call a bottom yet, it's hard to have much conviction to the long side, to the bull case." The upshot of cash conservation and higher borrowing costs will be less money spent on producing oil and natural gas. However, it is unclear whether overall U.S. output will decline, since some larger producers still expect to produce more oil and natural gas in 2015 than last year by focusing on their best drilling prospects. Concho Resources Inc. said late Monday that it was cutting its capital spending budget by a third, to $2 billion. But the Midland, Texas, company estimates production will rise 16% to 20% over 2014's level. Dana Mattioli and Dan Molinski contributed to this article. Write to Erin Ailworth at and Russell Gold at Credit: By Erin Ailworth,Russell Gold and Timothy Puko
Subject: Petroleum industry; Balance sheets; Debt restructuring; Investment banking; Crude oil prices; Natural gas utilities
Location: California United States--US Texas
Company / organization: Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Chevron Corp; NAICS: 324110, 211111; Name: Robert W Baird & Co; NAICS: 523110, 523120; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642436968
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642436968?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Hits New Lows, Brent Crude Nears $50; Brent, U.S. Crude Futures Hit Their Lowest Prices Since April 2009
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
A six-month-long selloff in the oil market has accelerated in the new year, with U.S. prices down 10% since Dec. 31. [...]recently, the declines were driven mainly by unexpectedly strong U.S. output. The Organization of the Petroleum Exporting Countries opted not to lower its production quota in November, disappointing many investors and traders who had counted on the cartel of oil-producing nations to restore balance to the market.
Full text: The collapse in oil intensified Tuesday, with U.S. prices closing below $50 a barrel for the first time in nearly six years amid mounting fears that the market will be awash in crude for the foreseeable future. A six-month-long selloff in the oil market has accelerated in the new year, with U.S. prices down 10% since Dec. 31. Until recently, the declines were driven mainly by unexpectedly strong U.S. output. But many investors are starting to fear that struggling economies in Europe and Asia will consume less crude than expected, worsening a global glut. Oil's steep drop sent shudders through financial markets. Currencies of oil-producing nations fell against the dollar, and shares of energy companies slid. Many investors sought out Treasury bonds and other haven assets. "Oil is the thing that's pretty much driving all the financial markets right now," said Jeffrey Sherman, portfolio manager at DoubleLine Capital LP, which oversees about $64 billion in assets. "This is essentially the market realizing that global growth is probably slowing." Light, sweet oil for February delivery, the U.S. benchmark, fell $2.11, or 4.2%, to $47.93 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $2.01, or 3.8%, to $51.10 a barrel on ICE Futures Europe. Both contracts hit their lowest prices since April 2009. U.S. drivers are enjoying the cheapest gasoline prices since 2009, with the national average retail price at $2.19 a gallon Tuesday, according to AAA. Booming U.S. shale production has added to supplies of other energy products in recent years, from natural gas to propane. Natural-gas futures fell to a two-year low Monday before rebounding slightly Tuesday to settle at $2.938 a million British thermal units. Oil-market investors have been worrying for months that surging energy production from the U.S., Libya, Iraq and elsewhere have contributed to a global oversupply of crude. Now, concerns are growing about the demand side, amid increasing evidence of slowing economic activity around the world. On Tuesday, the Institute for Supply Management's index of service-sector activity for December came in below forecasts. Following disappointing manufacturing numbers last week, the data are driving fears that slowing growth in the rest of the world is beginning to hurt demand for U.S. products. Also Tuesday, traders looked ahead to weekly U.S. inventory data due Wednesday morning, which are expected to show that crude-oil supplies grew last week. New indications that top exporter Saudi Arabia is unwilling to cut production also weighed on the market. Energy companies are cutting back spending in response to low prices, but it could take months for production growth to slow, market watchers said. The Organization of the Petroleum Exporting Countries opted not to lower its production quota in November, disappointing many investors and traders who had counted on the cartel of oil-producing nations to restore balance to the market. Saudi Arabia, OPEC's biggest exporter, reaffirmed its stance this week. On Monday, the kingdom , a sign that it may be trying to regain market share by pushing prices low enough that U.S. shale-oil production becomes unprofitable. On Tuesday, Saudi Arabia's King Abdullah said the country will address the recent decline in oil prices with "a solid will," according to a speech read by his crown prince on state television. The 90-year-old king is in the hospital being treated for pneumonia. The speech blamed current tensions in the oil market on "the slow growth in the global economy," rather than on the ample supply growth that analysts and traders say was the chief cause. "Over a significant part of the last 15 years, we've had Saudi Arabia and others playing a swing producer role. They've now decided not to," said Tim Guinness, chief investment officer of Guinness Atkinson Asset Management Inc., which oversees $300 million in energy equity investments. "There is excess supply in the short run, and it wouldn't surprise us to see the oil price go below $40." Some investors and analysts said oil is unlikely to stay at current levels. They expect prices to stabilize between $60 and $80 a barrel by year-end. "This isn't 2008-2009. Oil should not be at the same level" as it was then, said Rebecca Patterson, chief investment officer at Bessemer Trust in New York, which oversees about $55 billion in assets. "It's hard to see us back at those levels today." Bessemer's commodity portfolio manager reduced the fund's exposure to energy markets last autumn. But without a product cut from OPEC, it will take the market longer to recover, analysts say. "The market's trying to find that level where there's a supply response, " said Amrita Sen, oil analyst at Energy Aspects in London. "OPEC is usually the quickest supply response, and it's not there at the moment." Christian Berthelsen and Summer Said contributed to this article. to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Prices; Petroleum production
Location: United States--US Saudi Arabia
Company / organization: Name: DoubleLine Capital LP; NAICS: 523920; Name: New York Mercantile Exchange; NAICS: 523210; Name: Institute for Supply Management; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642437255
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642437255?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Product Prices Fall as Supplies Climb; U.S. Inventory Data Confirm the Market Is Still Oversupplied
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
U.S. crude-oil supplies fell by 3.1 million barrels, bucking expectations for a 300,000 barrel increase in a Wall Street Journal survey of analysts.
Full text: Gasoline and diesel futures tumbled to fresh lows Wednesday as total petroleum supplies in the U.S. hit an all-time high. Oil futures rose slightly, but market participants said they don't think the market has reached a bottom yet. Oil prices have plunged more than 50% in recent months amid a global glut of oil. Production has grown rapidly, especially in the U.S., and demand growth has remained tepid. Fears about economic growth in the eurozone have further weighed on prices this week. U.S. inventory data released Wednesday confirmed to market watchers that the market is still oversupplied, meaning prices could fall further to attract buyers and force producers to cut back on drilling. "There is no shortage, anywhere, at the moment," said Donald Morton, senior vice president of Herbert J. Sims & Co. "Our inventories are getting high." U.S. oil production, which has soared in recent years amid a boom in shale-oil drilling, rose last week to 9.1 million barrels a day, nearly on par with the all-time high reached in December. Though some U.S. producers have already cut back on spending in response to low prices, analysts don't expect production growth to slow for several more months. It is still affordable to pump oil out of existing wells in many areas, and some companies have to keep producing because they need cash to repay their debts. Prices are likely to keep falling until traders see signs that supply growth is shrinking, said Ed Kevelson, head of U.S. energy over-the-counter sales at brokerage Newedge USA, which is owned by Société Générale. "It's really about getting to a [price] point where you have choked off enough rigs, enough production growth" to balance the market, he said. Supplies are also climbing in other regions. Oil prices slumped last week on reports that Russian output and Iraqi exports were at multiyear highs. "Everyone is full throttle--supply is up all over the place," said Mark Benigno, co-director of energy trading at INTL FCStone Inc. U.S. oil for February delivery settled up 72 cents, or 1.5%, at $48.65 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose five cents, or 0.1%, to $51.15 a barrel on ICE Futures Europe. Inventories of crude oil and petroleum products rose by 9.9 million barrels last week to 1.149 billion barrels, the U.S. Energy Information Administration said Wednesday. That is the highest level on record, according to weekly data going back to 1990. The total doesn't include the country's strategic petroleum reserve, which holds another 691 million barrels. Monthly data, which go back to 1956, show that total petroleum supplies last exceeded this level in January 1983. Crude-oil supplies fell by 3.1 million barrels last week, counter to analysts' expectations, but large increases in gasoline and distillates, including heating oil and diesel fuel, pressured the market. The large increases in product inventories suggest that the glut of crude oil is being turned into a glut of refined products, and that demand hasn't risen enough to absorb growing supplies. Gasoline futures slid 1.2% to $1.3376 a gallon, the lowest level since March 2009, while diesel futures fell 1.5% to $1.6999 a gallon, the lowest since September 2009. U.S. consumption of petroleum products fell slightly in the week, the EIA said. The lower demand could be due to a moderate winter lowering heating-oil consumption. Also, driving demand is less responsive to low gasoline prices than it used to be, according to the EIA, because cars are more fuel-efficient and many drivers have changed their habits in response to high prices in recent years. The build in distillate supplies is the largest on record, based on EIA data going back to August 1982. "This is clearly an extraordinary build," said Andy Lipow, president of Lipow Oil Associates in Houston. "Refineries are continuing to turn the crude-oil surplus into a petroleum-product surplus....They're hoping that the demand materializes." However, some market watchers said last week's large distillate build could be because of a temporary drop in exports or one-time data adjustments. "It's an anomalous number," said Tom Kloza, global head of energy analysis at the Oil Price Information Service. "Maybe there were some export cargoes that didn't go out." Oil supplies rose by 1.3 million barrels in Cushing, Okla., the delivery point for the benchmark Nymex contract. Falling supplies at Cushing helped boost oil prices above $100 a barrel last spring, but stockpiles are now the highest since February 2014. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Price increases; Futures
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642461786
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642461786?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Below $50 Rocks Markets --- Oil, Other Energy Stocks Lead Broad Decline; Dow Loses Over 130 Points
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Jan 2015: C.1.
Abstract:
Political uncertainty in Europe, a prolonged decline in oil prices and a widespread move toward safer investments such as U.S. government bonds contributed to choppy trading in the Dow Jones Industrial Average, which swung between a brief, early gain of 80 points and an afternoon loss of 239 points. The continued decline in oil prices has undercut the profit outlook for a wider swath of the stock market beyond energy companies and raised worries about slowing global economic growth.
Full text: Stocks suffered their worst beginning to a year since the early days of the financial crisis in 2008, after another rocky day on Tuesday. Political uncertainty in Europe, a prolonged decline in oil prices and a widespread move toward safer investments such as U.S. government bonds contributed to choppy trading in the Dow Jones Industrial Average, which swung between a brief, early gain of 80 points and an afternoon loss of 239 points. The Dow finished the day down 130.01 points, or 0.74%, to 17371.64. The S&P 500 recorded its fifth decline in a row, the longest losing streak for the index in over a year. Many investors came into 2015 with a positive outlook for stocks, expecting an improving U.S. economy and low interest rates would help extend the nearly six-year old bull market. But traders said that the combination of the steep decline in oil prices and nervousness about Europe has many investors shifting into a defensive posture, driving up prices of government bonds. On Tuesday, that dash for safety sent the yield on the 10-year note down to 1.964%, its lowest closing level since May 2013. Yields and price move in the opposite direction. Investors also shifted money into shares of utilities and telecommunications companies, traders said. "[Investors] are rotating into more defensive sectors, and . . . minimizing their bets" on riskier investments, said Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. The continued decline in oil prices has undercut the profit outlook for a wider swath of the stock market beyond energy companies and raised worries about slowing global economic growth. At the same time, the flare-up of political uncertainty in Greece has added to investor jitters. The S&P 500 fell 17.97 points, or 0.9%, to 2002.61. The S&P 500 has fallen 4.2% since hitting its most recent record close on Dec. 29, and is down 2.7% in the first three days of the year. The Dow, meanwhile, is down 2.53% to start 2015. For both benchmark indexes, the declines mark the worst start to a year since 2008. As investors shifted away from riskier stocks the Nasdaq Composite Index lost 59.84 points, or 1.29%, to 4592.74. The session was busy, with 8.3 billion shares changing hands, well above last year's average daily volume of 6.3 billion shares. As has been the case for weeks, most of the focus was on oil prices, which extended their monthslong side. Crude-oil futures fell 4.2% to $47.93, and with Tuesday's decline, are down 55% from their high in June. Energy stocks within the S&P 500 fell 1.3% Tuesday, erasing an early advance. The group has tumbled 24% since mid-June. "What we're really looking for is, does this filter through to the U.S. economy? Then, it's a global problem," said Bryan Novak, senior managing director with Astor Investment Management, which manages $1.1 billion. While lower oil prices are seen as a benefit to consumer stocks thanks to declining prices at the gas pump, the oil-and-gas exploration boom has been a primary driver of profit growth among other parts of the economy. As oil prices have collapsed, the ripples spread beyond energy companies. On Tuesday, stocks in the rail sector dropped. Greenbrier Cos., which builds railcars that carry crude oil, fell $2.76, or 5.3%, to $49.31 ahead of its fiscal first-quarter earnings report, expected Wednesday. CSX Corp. fell 1.39, or 4%, to 33.49 after UBS AG downgraded the stock to "neutral," saying the oil-price drop could hurt its business shipping crude oil and sand used in drilling. UBS also cited energy-price declines in a downgrade of Norfolk Southern Corp., which fell 3.39, or 3.2%, to 103.00. In another sign of the spreading ripples from the oil-price decline, U.S. Steel Corp. said it will idle plants in Ohio and Texas and lay off 756 workers because of a sharp slowdown in orders from the energy industry. Investors also worry that the oil-price drop is a sign of economic weakness in Europe and Asia, which could ultimately weigh on U.S. growth. Many fund managers came into this year betting on a rebound in oil prices and energy stocks, and a decline in bonds, said Ian Winer, head of equities trading at Wedbush Securities. But oil continued to fall, and Treasury prices have rallied, leading investors to start unwinding those positions. Still, many investors expect U.S. stocks to gain this year, driven by an improving economy and rising corporate profits. Analysts expect companies will report 7.8% earnings growth in 2015, according to FactSet. Earnings reporting season for the fourth quarter of 2014 unofficially kicks off Jan. 12 with Alcoa Inc.'s report. Companies are expected to report 2.4% of earnings growth, according to FactSet, and 1.1% of sales growth from the previous year. Stocks were mixed in Asia early Wednesday. Australia's S&P/ASX 200 was down 0.5%, while Japan's Nikkei was up 0.5%. (See related article: "Commodities Report: Closing U.S. Price of $47.93 Is Lowest Since 2009, as Worries Grow About Slowing Global Economy" -- WSJ Jan. 7, 2015)
Credit: By Alexandra Scaggs
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 7, 2015
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642486829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642486829?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Shell to Pay $80 Million Compensation for Oil Spills in Nigeria; Out-of-Court Settlement Pays Damages to Nigerian Fishing Community
Author: Coker, Margaret; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC has agreed to pay about $80 million to compensate a Nigerian community for damage from two 2008 oil spills.
Full text: Royal Dutch Shell PLC agreed to pay about $80 million to compensate a Nigerian fishing community for two oil-pipeline spills in 2008 and 2009, in one of the largest environmental payouts in the African country. The out-of-court settlement comes after an often-acrimonious legal battle in which fishermen and tribal elders of the Bodo community in the Niger Delta had demanded restitution for loss of livelihood caused when a broken Shell pipeline gushed tens of thousands of barrels of oil into the creeks and swampy mangrove forests where residents fish and get water. The U.K. lawyer representing the claimants said his clients were overjoyed with their victory. "They are pleased that they have finally gotten justice and that Shell has recognized...their suffering," said Martyn Day, partner at London-based solicitors Leigh Day. Shell called the settlement a fair response to the two pipeline spills. "From the outset, we've accepted responsibility for the two deeply regrettable operational spills," said Mutiu Sunmonu, managing director of Shell's Nigeria arm. Shell has operated in Nigeria for decades, but in recent years it has struggled with pipeline leaks and other environmental and security problems, some tied to oil theft. The company has been trying to exit many of its onshore operations in the country. In November, it sold its stake in certain oil wells and processing plants to a Nigerian company for about $600 million. It sold other Nigerian assets in October. The Bodo legal case had been one of the long-term headaches facing the company in Nigeria. The case involves two spills along the Trans Niger Pipeline, operated by Shell, which takes oil from its fields to the export terminal on the coast. It carries about 150,000 barrels of oil a day. Bodo residents say oil seeped into their local waterways for weeks because of these two spills. In August 2011, Shell admitted liability for the spills, but it disputed the extent of the damage. The company's Nigerian division originally offered the community total compensation of £4,000, or about $6,050. A Bodo fisherman, angered by what he considered an extraordinarily low offer, emailed Mr. Day in London asking for his help. "The whole case started off with a Nigerian email," Mr. Day said. "Funny that." Compensation talks broke down in 2013 amid arguments over the environmental toll and the amount of people affected by the spills. The original claim prepared by the British lawyers named 11,000 villagers. That number expanded to 15,601, including 2,000 children and their fishermen parents. Experts testifying on behalf of the Bodo community estimated from satellite technology that around 100,000 barrels of oil spilled in the waterways in these incidents and have contaminated at least 23 square miles of coastland. Shell disputes this figure. A spokeswoman said the company maintains that "a far smaller area was directly impacted." In the fall of 2014, the villagers' legal team filed suit against Shell in London, amid stalled negotiations. The compensation deal was reached before Christmas, but Mr. Day needed to spend weeks overcoming a major logistical challenge: coaxing retail banks to come to the remote village so the claimants could open bank accounts into which the settlement could be paid. Each of the claimants will receive $3,300, Mr. Day said. The remaining $30 million from the settlement will be set up in a community escrow fund for local development projects. Chief Sylvester Kogbara, chairman of the Bodo Council of Chiefs and Elders, said a priority use for the community funds will be to rebuild a trustworthy supply of clean water for his people. "The community compensation is going to be spent on infrastructure in the community," said Chief Kogbara in a telephone interview. "We have no good drinking water, our schools are dilapidated and we have no health facilities." Shell said it is now committed to starting a cleanup process of the area. The company said it is bringing outside inspectors to the region to determine the extent of environmental damage and will be selecting contractors to start the cleanup in the coming months. Ledum Mitee, a Nigerian lawyer and longtime environmental activist in Ogoniland where Bodo is located, said he hopes that the Shell settlement acts as a precedent for the other compensation demands against major oil companies by residents of the Niger Delta. "People are forced to take small compensation" in environmental and ecological claims against oil companies because legal rulings take so long to adjudicate, he said. This case, however, "will give a legal precedent to show international oil companies can be accountable." Justin Scheck contributed to this article. Write to Margaret Coker at Credit: By Margaret Coker and Benoît Faucon
Subject: Petroleum industry; Community
Location: United Kingdom--UK Nigeria
People: Sunmonu, Mutiu
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642487698
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642487698?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright ow ner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Japan Inc. Expects Lift as Oil Slides
Author: Pfanner, Eric
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Jan 2015: B.2.
Abstract:
While the Nikkei Stock Average fell 3% on the second day of trading in 2015 after a selloff in energy shares on Wall Street, many Japanese executives said the oil-price decline would lift consumer-spending power and corporate profits.
Full text: TOKYO -- Japanese corporate leaders on Tuesday welcomed the recent plunge in oil prices, saying it would bolster Japan's faltering economic recovery even as it roils global financial markets. While the Nikkei Stock Average fell 3% on the second day of trading in 2015 after a selloff in energy shares on Wall Street, many Japanese executives said the oil-price decline would lift consumer-spending power and corporate profits. That, they said, could reinvigorate Prime Minister Shinzo Abe's economic-turnaround program, after a sales-tax increase last April tipped Japan into recession. "It is enormously positive for the Japanese economy," said Takashi Hibino, president of Daiwa Securities Group Inc., speaking at a traditional New Year's reception hosted by business lobbying groups. "There are no negatives for our economy." Oil prices have fallen more than 50% from last June, with West Texas Intermediate crude slipping below $50 a barrel. Cheaper crude has hurt oil-producing countries such as Russia, but could benefit Japan, a nation that imports more than 20 trillion yen ($167 billion) of oil and liquefied natural gas annually. The average price of a liter of regular gasoline fell to 149.10 yen ($1.25) as of Dec. 22, down 6.7% from late October, according to Japan's Resources and Energy Agency. Along with motorists, a range of businesses, including airlines, manufacturers and retailers, all stand to benefit. "Our stores are open 365 days a year, 24 hours a day," said Genichi Tamatsuka, chief executive of Lawson Inc., a convenience-store operator, taking a break from an annual ritual in which hundreds of business leaders wearing carnation lapel pins gathered in a Tokyo hotel to mark the new year with a mass exchange of business cards. "That is a lot of energy. If the situation stabilizes, that is very good for our business, especially at the store level." A fall in energy costs might seem at odds with a campaign by Mr. Abe, supported by the Bank of Japan, to lift prices across the economy and end more than two decades of deflation. If companies and consumers expect further price increases, the thinking goes, they will quit hoarding cash and spend it instead, fueling a virtuous cycle of growth. But even Haruhiko Kuroda, governor of the Bank of Japan, who has taken aggressive monetary-policy measures in an effort to stimulate inflation, has cheered the drop in oil prices, saying in a Christmas Day speech that "Japan, a commodity-importing country, gains a large advantage from it." If the price drop lifts corporate profits, it could give companies more leeway to heed Mr. Abe's call for higher wages, which have stagnated in real terms despite a tight labor market. Mr. Abe said Tuesday that he hoped companies would pass on some of the savings from a planned reduction in corporate taxes in the form of pay raises and increased capital spending. He even dangled the possibility of additional tax reductions. "How we can further cut the rate depends on you," he told the business leaders in a speech, saying wage increases were needed to "win more understanding among the public about cutting corporate taxes." Negotiations between labor and management on wage levels for the financial year that begins in April are set to begin shortly. "It is the responsibility of the management to also reward the community and employees," said Akio Toyoda, president of Toyota Motor Corp. The world's largest auto maker has forecast a second straight year of record profit. Lower oil prices are expected to lift demand for sport-utility vehicles, pickup trucks and large cars, which use more gasoline but also generate more profits for auto makers than small cars. Toyota, like other Japanese companies with substantial overseas sales, has also benefited from Mr. Abe's policy of weakening the yen, which lifts the value of foreign profits when converted into the Japanese currency. But the weak yen has raised costs at auto-parts suppliers and other companies dependent on imported raw materials. Yoshiaki Fujimori, president of Lixil Group Corp., a maker of building supplies and plumbing fixtures that relies on imported petroleum supplies for products such as plastic windows, said the fall in oil prices could make up for the effects of yen weakness. As long as oil stays in the range of $50 to $60 a barrel, he said, Japanese manufacturers could thrive with the dollar at 125 yen to 130 yen, compared with a current level of about 119 yen. --- Atsuko Fukase, Yoko Kubota, Megumi Fujikawa and Tatsuo Ito contributed to this article. Credit: By Eric Pfanner
Subject: Automobile industry; Profits; Capital expenditures; Recessions; Crude oil prices; Economic recovery
Location: Japan
Company / organization: Name: Bank of Japan; NAICS: 521110
Classification: 9179: Asia & the Pacific; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Jan 7, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642548364
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642548364?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Deep Debt Keeps U.S. Oil Firms Pumping
Author: Ailworth, Erin; Gold, Russell; Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Jan 2015: A.1.
Abstract:
"To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley.
Full text: American oil and gas companies have gone heavily into debt during the energy boom, increasing their borrowings by 55% since 2010, to almost $200 billion. Their need to service that debt helps explain why U.S. producers plan to continue pumping oil even as crude trades for less than $50 a barrel, down 55% since last June. But signs of strain are building in the oil patch, where revenue growth hasn't kept pace with borrowing. On Sunday, a private company that drills in Texas, WBH Energy LP, and its partners, filed for bankruptcy protection, saying a lender refused to advance more money and citing debt of between $10 million and $50 million. Neither the Austin-based company nor its lawyers responded to requests for comment. Energy analysts warn defaults could be coming. "The group is not positioned for this downturn," said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "There are too many ugly balance sheets." The industry is also expecting a wave of asset sales and consolidations, though it may not gain momentum until the price of oil stabilizes and values become clearer. Bankers say companies are reluctant to get acquired with their stock prices under pressure, as they fear they could be selling low, and buyers don't want to overpay if prices fall further. And mergers aren't a panacea. "To be a consolidator of a company that has a large cash-flow hole, you have to have the ability to fulfill that cash-flow need," said Dennis Cornell, managing director and head of energy investment banking for the Americas at Morgan Stanley. "You can't expect two companies with big problems with their cash flows to come together and mitigate that problem." Instead, the investment bank is "thinking of more creative ways of getting capital to clients," he said, for example through private injections of capital. Before crude prices began falling, U.S. oil and gas producers were able to acquire leases and drill wells even if that meant outspending their incomes. Debt was used to bridge the cash shortfall so that companies could develop oil fields in Texas, North Dakota and newer locations including Colorado. In 2010, U.S. companies focused on producing oil and gas had $128 billion in combined total debt, according to financial data collected by S&P Capital IQ. As of their latest quarter, such companies had $199 billion of combined total debt. The group doesn't include Exxon Mobil Corp. and Chevron Corp., which also make money from refining, chemicals and pipelines. Oil and gas producers' revenues grew more slowly -- rising 36% to $239.4 billion in the 12 months ended September 2014 versus $175.8 billion in 2010. But oil is languishing at five-year lows -- the U.S. benchmark fell to $47.93 on Tuesday -- and natural-gas prices have fallen by 40% since June from about $4.70 per million British thermal units to less than $3. Despite the cold winter, companies in the U.S. have been pumping enough gas to fill up storage around the country to high levels not seen in nearly five years. Companies are focusing on cash conservation, balance sheet mending and meeting lending covenants. "Having control of your debt and ensuring you have a good level of liquidity going into this commodity cycle is obviously important to us," said Harold Hickey, president and chief operating officer of EXCO Resources Inc. of Dallas. He said the company had been working to shore up its balance sheet since before the crude price collapse. The company, which produces mostly natural gas, had revenue of $713 million for the 12 months ended September. It has long carried a heavy debt load, which hit nearly $1.9 billion at the end of 2013. Mr. Hickey said the company cut its long-term debt to $1.35 billion by September 2014, in part by selling some assets, and in December suspended its dividend. Even so, the company's shares have cratered, plunging from over $6 apiece last spring to under $2 on Tuesday. While no energy company has defaulted on its bonds or other debt, CreditSights Inc. has identified about 25 at risk, because of small asset bases, high debt and low cash flow. The list is headed by Sabine Oil & Gas LLC and Forest Oil Corp. -- which merged last month into Sabine Oil & Gas Corp. -- and closely held Venoco Inc., which focuses on California. None responded to requests for comment. Quicksilver Resources Inc. would also be on the list except that it was already trying to restructure its debt out of court, said Brian Gibbons, the research firm's senior oil and gas analyst. Moody's downgraded Quicksilver deeper into junk status in September, noting the company had been failing at its attempts to sell assets in order to help it refinance and cut outstanding debt. Quicksilver didn't reply to a message seeking comment. Lenders are already doling out tough love to companies, said Chad Mabry, an analyst who follows small and midsize producers for investment bank MLV & Co. Some lenders are asking producers to provide plans for how they will handle further drops in the price of crude, he said, while others are pressing for asset sales. "The bear call has been right so far," Mr. Mabry said. "Without being able to really call a bottom yet, it's hard to have much conviction to the long side, to the bull case." The upshot of cash conservation and higher borrowing costs will be less money spent on producing oil and natural gas. However, it is unclear whether overall U.S. output will decline, since some larger producers still expect to produce more oil and natural gas in 2015 than last year by focusing on their best drilling prospects. Concho Resources Inc. said late Monday that it was cutting its capital spending budget by a third, to $2 billion. But the Midland, Texas, company estimates production will rise 16% to 20% over 2014's level. --- Dana Mattioli and Dan Molinski contributed to this article. Credit: By Erin Ailworth, Russell Gold and Timothy Puko
Subject: Petroleum industry; Balance sheets; Investment banking; Natural gas utilities; Debt restructuring; Crude oil prices
Location: California United States--US Texas
Company / organization: Name: Robert W Baird & Co; NAICS: 523110, 523120; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Sabine Oil & Gas Corp; NAICS: 211111, 211112; Name: Chevron Corp; NAICS: 324110, 211111
Classification: 9180: International; 8510: Petroleum industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 7, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642548367
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642548367?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Steel Idles Plants on Oil Impact
Author: Miller, John W
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Jan 2015: B.1.
Abstract:
U.S. Steel Chief Executive Mario Longhi told analysts in October that, while the swoon in global oil prices wouldn't affect the fourth quarter, "the recent turmoil in the crude oil markets could have an impact on the level of drilling activity as we move into the new year."
Full text: PITTSBURGH -- U.S. Steel Corp. said it will idle plants in Ohio and Texas and lay off 756 workers, becoming one of the first big U.S. industrial casualties of the recent collapse in global oil prices. The plants make steel pipe and tube for oil and gas exploration and drilling. With oil prices more than 5 1/2-year lows and hovering around $50 a barrel, energy companies have far less incentive to drill for new supply, reducing demand for the plant's products. The Lorain, Ohio operation, which will shed 614 workers, produces more than 700,000 tons of pipe a year. Houston, where 142 will be laid off, generates over 100,000 tons annually. "The company has suddenly lost a great deal of business because of the recent downturn in the oil industry," Tom McDermott, president of United Steelworkers local 1104 in Lorain wrote to workers, in a letter reviewed by The Wall Street Journal. "What appeared just a few short weeks ago as being a productive year, [with new hires in December and extra turns going on], has most abruptly turned sour." The union declined further comment. The weakness could extend beyond U.S. Steel. In the last five years, U.S., French and Chinese companies have built up millions of tons of new capacity from Ohio to Texas, lured by a resurgent American auto industry and the country's booming oil and gas sector. A subsidiary of France's Vallourec SA, for example, built a $650 million, 500,000-ton-per-year mill in Youngstown, Ohio. The company didn't return calls seeking comment. Other steelmakers with key U.S. operations include Nucor Corp, Steel Dynamics Inc., ArcelorMittal and AK Steel Holding Corp. The so-called oil country tubular goods, or OCTG, industry has been substantially built up in the past few years to provide pipe and tube for the boom in drilling for shale gas and new oil in the Gulf of Mexico. U.S. Steel, which is trying to reverse five straight years of losses, including a $1.7 billion deficit loss in 2013, has been among those betting most heavily on OCTG. The company's tubular division posted an operating profit of $140 million during the first nine months of 2014, up from $23 million over the same period in 2010. U.S. Steel Chief Executive Mario Longhi told analysts in October that, while the swoon in global oil prices wouldn't affect the fourth quarter, "the recent turmoil in the crude oil markets could have an impact on the level of drilling activity as we move into the new year." Oversupply in the market has been exacerbated by huge flows of steel imports into the U.S. Overall steel imports were up 35% to 38 million tons during the first 10 months of 2014, according to Global Trade Information Services. The round of layoffs at U.S. Steel will begin on March 8, "with additional layoffs occurring through May 2015," a company official wrote to the union. Last summer, U.S. Steel and others won import tariffs on imports of OCTG from South Korea and other exporting countries. But that won't be enough to prop up the industry in the face of falling oil prices. Last year, as it pursued trade import tariffs, U.S. Steel curtailed operations at plants in McKeesport, Pa., and Bellville, Texas, citing competition from foreign imports. They have yet to be restarted, a spokeswoman said Tuesday. Credit: By John W. Miller
Subject: Steel industry; Petroleum industry; Energy industry; Steel pipes; Steel production; Crude oil prices
Location: United States--US
People: Longhi, Mario
Company / organization: Name: Steel Dynamics Inc; NAICS: 331110; Name: United Steelworkers of America; NAICS: 813930; Name: Nucor Corp; NAICS: 332312, 325180, 331110; Name: US Steel Corp; NAICS: 331110
Classification: 9180: International; 8510: Petroleum industry; 8660: Metalworking industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 7, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642548388
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642548388?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
No OPEC Member Has Formally Requested Emergency Meeting; No Request Despite Brent Oil Dipping Below $50 a Barrel for the First Time in 5½ Years
Author: Faucon, Benoît; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract: None available.
Full text: OPEC members have so far refrained from formally asking for the group to hold an emergency meeting despite Brent oil prices dipping below $50 a barrel for the first time in 5½ years, delegates from the oil cartel said. a barrel earlier Wednesday, though it recovered later to around $50.9 per barrel. The Organization of the Petroleum Exporting Countries, led by its top producer Saudi Arabia, decided in November to keep their production ceiling unchanged, instead of cutting back output to bolster falling prices. OPEC is next scheduled to meet in June, though in times of market turmoil, the group has frequently convened emergency meetings. Several OPEC members, including Saudi Arabia, have signaled they are braced for further oil price falls before considering any action. In part that is because some within the cartel believe lower oil prices will harm supply from higher-cost producers such as companies producing shale oil in the U.S. "We need to give the market patience and time to balance itself," a Gulf OPEC delegate said. Write to Benoît Faucon at and Summer Said at Credit: By Benoît Faucon And Summer Said
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642598263
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642598263?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Trade Gap Narrows as Lower Oil Costs Offset Weakness Overseas; Exports Fall 1% on Month While Imports Drop 2.2%; Imported Oil at Lowest Monthly Volume Since 1994
Author: Morath, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
A strengthening dollar and slowing economies in Europe and Asia were expected to cause global trade to be a drag on fourth-quarter economic output, but the latest figures the Commerce Department released Wednesday show lower oil imports are narrowing the trade gap, which aids growth figures.
Full text: The U.S. economy appears to be maintaining its strong momentum in part because falling oil prices are offsetting weaker demand overseas. A strengthening dollar and slowing economies in Europe and Asia were expected to cause global trade to be a drag on fourth-quarter economic output, but the latest figures the Commerce Department released Wednesday show lower oil imports are narrowing the trade gap, which aids growth figures. The trade deficit fell 7.7% to a in November. The reading marks the smallest deficit since December 2013 and is causing many economists to bolster gross domestic product forecasts. Barclays lifted its fourth-quarter GDP forecast to a 3.5% gain from a 2.7% advance following the trade report. Macroeconomic Advisers projected 3% growth, up from a prior forecast of 2.7%. Credit Suisse moved its estimate to a 3.2% advance from 2.9%. If those projections hold, the economy will have grown at 3% or better pace for three straight quarters--the longest such streak since 2004 and 2005. "This drop in oil prices is just a big net positive for the U.S. economy," Stuart Hoffman, chief economist at PNC Financial Services Group. "If that didn't happen we wouldn't be able to sustain the momentum we've seen." Along with lower gasoline prices, consistent hiring and improving confidence are supporting U.S. consumer spending. That propelled the economy to grow at a 5% pace in the third quarter, the best gain in more than a decade. The new data suggest trade will be a neutral factor for economic growth in the fourth quarter. Trade was a net benefit to the U.S. economy during the third quarter, adding 0.78 percentage point to overall growth. The November trade gap narrowed because imports declined 2.2% from October to $235.36 billion, while exports decreased 1% to $196.36 billion. Crude oil was the primary driver of the falling import number. Imports of petroleum, as measured in dollars, were the lowest since August 2009. After topping $100 a barrel last summer, oil prices steadily declined during the fall and . The average price of a barrel of crude oil fell to $82.95 in November, down from $94.69 a year earlier, the Commerce Department said. But the lower prices didn't spark additional demand. The volume of imported oil in November, 189 million barrels, was the lowest monthly figure since 1994. Increased U.S. oil production has limited domestic demand for foreign oil in recent years. Nonpetroleum imports were down slightly in November, on a seasonally adjusted basis, but imports of consumer goods were the highest on record. "Excluding energy-related products, imports of goods continued to show a healthy picture," said Credit Suisse economist Axel Lang. A strengthening U.S. dollar makes foreign goods and services relatively more affordable and the greater spending suggesting Americans have capacity to lend support economies abroad. Through the first 11 months of 2014, imports to the U.S. were up 3.3%, outpacing exports that rose 2.9% from the year-earlier period. The decline in exports for November was driven by weaker shipments of civilian aircraft, a volatile category. U.S. firms also shipped less computers, generators and other types of machinery in November. The slowdown in capital goods shipments could be a positive signal for the U.S. because it indicates recent weak readings for factory output are likely driven by lackluster foreign demand rather than a slowdown in domestic investment. Exports were an early driver of the economic expansion that began in 2009, but the pace of gains has slowed in recent years. U.S. firms are facing a number of challenges to increasing sales abroad, including the strong dollar and weak economic output readings from Japan to Europe to Brazil. Write to Eric Morath at Credit: By Eric Morath
Subject: Economic growth; Petroleum industry; International trade; Shipments; Crude oil prices; Petroleum production; Gross Domestic Product--GDP
Location: United States--US Asia Europe
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: PNC Financial Services Group Inc; NAICS: 522110, 522292, 523120, 523930, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Y ork, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642629572
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642629572?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada Trade Deficit Widens; Lower Crude Oil Shipments Weighed Heavily on Exports in November
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
Energy exports shrank 7.8%, primarily from declines in crude oil and crude bitumen, with prices and volumes both down. , also out Wednesday, showed its trade gap narrowed in November to its lowest level in nearly a year because falling prices and weaker demand for foreign oil pushed down imports.
Full text: OTTAWA--Canada recorded its largest trade deficit in almost a year in November as lower shipments of crude oil weighed heavily on exports. The figures offer a clear picture of the impact of sliding oil prices and are a blow to Canadian policymakers' hopes for exports and investment to fuel economic growth, taking the burden off of indebted consumers. The trade deficit in November widened to 644 million Canadian dollars ($544.47 million) from a revised C$327 million in October, Statistics Canada said Wednesday. The November shortfall was more than triple what markets had expected, according to a report from Royal Bank of Canada. Exports shrank 3.5% to C$43.26 billion in November, outpacing a 2.7% drop in imports, with nine of the 11 export sectors posting declines. Some economists expect exports may have dragged on economic growth in the fourth quarter. Energy exports shrank 7.8%, primarily from declines in crude oil and crude bitumen, with prices and volumes both down. , also out Wednesday, showed its trade gap narrowed in November to its lowest level in nearly a year because falling prices and weaker demand for foreign oil pushed down imports. Canada is a net exporter of oil, which makes up roughly one-fifth of total shipments. Almost all of the oil is exported to the U.S. Shipments to the U.S, which absorbs some 75% of Canada's exports, and to the U.K, another key trading partner, fell in November. Canada's trade balance with the U.S. shrank to C$2.94 billion, the smallest in a year, as exports fell 2.6% to overshadow a 2.1% drop in imports. Overall export prices in Canada fell 1.9% and volumes declined 1.6%. Import prices dropped 1% and volumes were down 1.7%. "It's pretty ugly," David Tulk, chief Canada macro strategist at TD Securities said of the trade report. "Our tracking this far would suggest net exports will act as a real drag on GDP," he said, noting that would delay the exports-led recovery policymakers are counting on. Energy "feels like a lost cause," he said, adding "what we're waiting for is to see a stronger U.S. economy lift demand for other products." Bank of Canada Governor Stephen Poloz said in December that he expects sliding oil prices to shave about one-third of a point off growth in 2015, but some economists say the bite will be bigger. Canada's central bank will issue its quarterly economic projections later this month, along with its first interest rate decision this year. Mr. Tulk expects the central bank will likely be cautious. "Energy, especially oil, feels like you are trying to catch a falling knife. From a policy perspective you'll need to see some stability and until you get that, you just have to be cautious," he said. Write to Nirmala Menon at Corrections & Amplifications Canada's trade balance with the U.S. shrank to C$2.94 billion, the smallest in a year. A previous version of this article stated the figure as C$2.81 billion. Credit: By Nirmala Menon
Subject: Exports; International trade; Economic growth; Petroleum industry
Location: United States--US Canada
People: Poloz, Stephen
Company / organization: Name: Statistics Canada; NAICS: 926110; Name: Royal Bank of Canada; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642656418
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642656418?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Boosts Support for Latin Leftists; China Pledged Billions of Dollars of Financing to Venezuela and Ecuador, Two South American Energy Exporters Battered by Falling Oil Prices
Author: Alvaro, Mercedes; Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract: None available.
Full text: China pledged billions of dollars of financing to Venezuela and Ecuador, two South American energy exporters battered by falling oil prices, as Beijing moved to secure resources and allies in the region. China has increased its diplomatic clout throughout Latin America by extending over $100 billion in credit to the region since 2005, according to figures from Boston University's Global Economic Governance Initiative. Beijing has become the biggest foreign financier of both Venezuela and Ecuador, two oil-rich, leftist allies eager to help counter U.S. sway in the region. Following a meeting with Chinese President Xi Jinping, his Venezuelan counterpart Nicolás Maduro announced bilateral accords that would bring $20 billion in new investment to Venezuela. Ecuador said it secured $7.5 billion in financing. Both Mr. Maduro and his Ecuadorian counterpart, Rafael Correa, were in Beijing along with officials from various Latin American nations to take part in a regional gathering. Both Latin countries, highly dependent on oil exports to pay for heavy public spending, were in dire need of a helping hand as crude prices tumble to less than half of their level from several months ago. A barrel of oil sold for about $50 on Wednesday. Last week, Venezuela's central bank released long-delayed figures, revealing the country entered a recession in 2014. Venezuela needs oil to average around $117.50 a barrel to balance its 2015 budget, according to Deutsche Bank estimates. In Ecuador, officials have reported a slowing economy, with growth of 3.4% in the third quarter, down from 5.6% in the July-through-September period in 2013. Mr. Maduro, who has seen his approval rating swoon along with oil prices, offered few details on the new accords with China, which he said involved projects in the energy, industrial and housing sectors. The Venezuelan leader, who has struggled to keep supporters happy amid shortages of basic goods, praised China for coming to the rescue. "The economic war against our people and the oil price war is an opportunity to grow closer to our allies," said Mr. Maduro, who has blamed Venezuela's spiraling economy on an alleged plot by enemies of his leftist government. Venezuela is slated to hold hotly contested legislative elections in December that many analysts see as a referendum on Mr. Maduro's performance. Experts said it was unclear without further details what kind of impact the new financing would have on the Venezuelan and Ecuadorian economies. China has extended to Caracas some $50 billion in credit since 2007 in exchange for guaranteed oil. It has committed more than $12 billion in financing to Ecuador between 2009 and 2014. Wednesday's agreement underscored China's continuing support for Mr. Maduro despite his political woes, said Risa Grais Targow, senior Latin America analysts for Eurasia Group. "This is because the Chinese are heavily exposed to Venezuela and are likely concerned about the prospect of regime change," she said in a client note. Benoît Faucon contributed to this article. Credit: By Mercedes Alvaro And Ezequiel Minaya
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642676752
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642676752?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Firms' New Dilemma: Save, or Borrow More? Drop in Oil Prices Will Force Producers to Cut Dividends and Investments or Get More in Debt
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Jan 2015: n/a.
Abstract:
[...]companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC must decide whether to risk future earnings by cutting developments, risk upsetting investors by cutting dividends, or take on big debt in the hope that oil prices will soon recover.
Full text: For years, big oil companies have been spending more money than they bring in. With oil prices down more than 50% since last June, that is becoming an ever trickier way to run their businesses. The cost of developing new fields has ballooned over the past decade, while investors have kept pressing for high dividends. The result: Companies have spent more on capital costs and mollifying investors than they reap in cash flow. Now, companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC must decide whether to risk future earnings by cutting developments, risk upsetting investors by cutting dividends, or take on big debt in the hope that oil prices will soon recover. The big companies have indicated they won't cut shareholder payouts in the near future, but investors and analysts say producers can weather low oil prices only for so long. "There is no doubt dividends are under serious threat," says Michele della Vigna, an analyst with Goldman Sachs Group Inc. He says oil companies will have to cut capital spending by 30% in three years' time if oil settles at around $70 a barrel, if they want to preserve their payouts. Brent crude fell 0.8% to $50.69 a barrel on the ICE Futures Europe exchange on Wednesday, having briefly traded below $50 a barrel for the first time since 2009. Even when oil traded at over $100 a barrel in recent years, . A Citi Research analysis of 12 of the world's biggest nonstate-owned oil companies says their cumulative spending on dividends and capital investment--excluding certain acquisitions--was 24% higher than their cash flow in 2013, and has similar estimates for 2014. Shell, for example, had $40 billion in net cash flow in 2013. But, Citi says, Shell's capital spending and dividend payments outstripped cash flow by 36%. Exxon's cash flow exceeded its dividend and capital spending each year from 2008 to 2013, Citi says, with the exception of 2009. But Citi estimates its shareholder payouts and investment will exceed cash flow by 22% in 2015. Exxon said it will lay out its capital spending plans for 2015 in March. Shell Chief Executive Ben van Beurden has said in recent months that last year's capital spending would be lower than 2013's. A spokesman said the company has enough borrowing capacity to maintain dividend and capital spending levels "for a reasonable period of time." Shell's gearing--or debt as a percentage of the company's capital--was 13% last year, Citi says. The company has said it can afford to bring that number up to 30%. BG Group PLC's dividend and capital spending exceeded cash flow by 47% in 2013, Citi says, and estimates that number rose to 58% last year. A BG spokesman said the company has finished large projects responsible for "the biggest investment period in the company's history." Eni SpA's capital and dividend spending exceeded cash flow by 59% in 2013, Citi says, though it estimates that fell to 18% last year. An Eni spokeswoman said the company has had a cost-cutting plan in place since the summer. BP's dividend plus capital investment last year was 2% higher than its cash flow, according to Citi estimates. The bank expects that number to rise to 24% this year. BP's chief financial officer last year said the company's "first priority within the financial framework will always be to the dividend." Using debt to cover dividend and capital investments isn't necessarily a problem, especially given the current low interest rates globally. That is the gamble that many companies took in recent years, as they poured money into giant development projects. And even now, the gearing for the world's four biggest nonstate-controlled oil companies is below 20%, which analysts say is a healthy level. But while the need to borrow in past years came from a decision to invest heavily in growth, borrowing in the near future will be to make up for lost revenue from the oil price drop. "It's a short-to-medium-term problem, so we're reassessing our position on our holdings in the sector," says Richard Champion, the chief investment officer at Sanlam Private Investments, which was heavily invested in Shell and held shares in BP as of October. He expects that if oil prices don't rebound in the next two years, the big companies will have to either cut their dividends or invest less in new projects, imperiling their output. "These guys are in a really hard spot," he said. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Capital expenditures; Investments; Capital costs; Petroleum industry; Cash flow
People: van Beurden, Ben
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: BG Group PLC; NAICS: 221210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 7, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642757527
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Product Prices Fall as Supplies Climb; U.S. Inventory Data Confirm the Market Is Still Oversupplied
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract: None available.
Full text: Prices at the gas pump are heading even lower. Gasoline futures fell to nearly a six-year low on Wednesday after U.S. government data showed oil and fuel supplies rising to a record high last week, the latest evidence of a petroleum glut that has rattled financial markets and raised questions about the strength of global economic growth. U.S. crude-oil prices rose modestly, but there was little indication that the market, which has plunged by 55% since late June, has hit a bottom. Weekly inventory data released by the federal Energy Information Administration reinforced the belief among many investors and traders that increasing oil output continues to overwhelm the growth in demand, a situation that is likely to further undercut prices across the board. U.S. stockpiles of crude oil, refined fuels and other types of petroleum rose 0.9% to 1.149 billion barrels in the week ended Jan. 2, according to the EIA. That is the highest level ever in weekly data dating back to 1990, and beats the previous high set in June 2013. The total doesn't count the barrels held in the nation's strategic petroleum reserve. "There is no shortage, anywhere, at the moment," said Donald Morton, senior vice president of Herbert J. Sims & Co., who oversees an energy-trading desk at the Fairfield, Conn., investment bank. "Our inventories are getting high." Minutes from the latest Federal Reserve meeting, also released Wednesday, indicated that central-bank officials expect low oil prices to ultimately be positive for the economy. But some voiced concern that the drop signaled slowing growth outside the U.S., a potential headwind for the U.S. economy. The decline in oil prices is expected to keep inflation running below the Fed's 2% target in the near term. The large increases in fuel stockpiles suggest that the glut of crude oil is morphing into a glut of refined products, and that demand isn't rising rapidly enough to absorb the growing supplies. U.S. consumption of petroleum products fell slightly in the week, the EIA said. The lower demand could be due to moderate winter weather, which likely lowered heating-oil consumption, analysts said. Gasoline inventories rose by 8.1 million to 237.2 million barrels, the highest level since February 2011, according to the EIA. Analysts expected an increase of 3.2 million barrels. Distillates, a fuel category that also includes heating oil as well as diesel, posted their biggest weekly gain on record, according to the EIA data. Inventories rose by 11.2 million barrels, compared with expectations for a 2.3-million-barrel increase, to their highest since March 2012. "This is clearly an extraordinary build" in distillates, said Andy Lipow, president of Lipow Oil Associates, a Houston consulting firm. "Refineries are continuing to turn the crude-oil surplus into a petroleum-product surplus....They're hoping that the demand materializes." Gasoline futures fell 1.2% to $1.3376 a gallon, the lowest level since March 2009, while diesel futures lost 1.5% to $1.6999 a gallon, the lowest since September 2009. The decline in gasoline futures portends further drops in the price of gas at the pump, which tends to lag behind trends in wholesale markets by several days. A gallon of regular gasoline in the U.S. averaged $2.19 on Wednesday, according to AAA. Pump prices are at their lowest since May 2009 and have fallen for a record 104 consecutive days, according to the motor club. Economists say the fall in pump prices has been a boon for consumers, and investors are betting that retailers will benefit from more spending money in Americans' wallets. However, some market watchers said last week's large increase in distillate volumes could be due to a temporary drop in exports or one-time data adjustments. Refiners in recent years have capitalized on rising U.S. oil output by ramping up oil-product exports. The build in distillates is "an anomalous number," said Tom Kloza, global head of energy analysis at the Oil Price Information Service. "Maybe there were some export cargoes that didn't go out." While cheaper pump prices are expected to bolster the consumer-driven U.S. economy, the underlying reason--sharply lower crude-oil prices--have shaken stocks and bonds of oil-producing companies and regions that have benefited from the U.S. oil boom. U.S. oil prices rose 1.5% on Wednesday to $48.65 a barrel on the New York Mercantile Exchange following two days of steep losses. The relative stability of oil prices Wednesday helped stock markets in the Europe and U.S. advance. Crude-oil supplies fell by 3.1 million barrels last week, counter to analysts' expectations of a 300,000-barrels build, but optimism over the drop was offset by the sharp rise in gasoline and diesel inventories. Oil supplies rose by 1.3 million barrels in Cushing, Okla., the delivery point for the Nymex contract. Falling supplies at Cushing helped boost oil prices above $100 a barrel last spring, but stockpiles are now the highest since February 2014. Few traders and analysts think oil is poised for a sustained rebound. Members of the Organization of the Petroleum Exporting Countries haven't asked for an emergency meeting despite the plunge in oil prices. OPEC's decision in November to keep production steady was a major catalyst in oil's selloff. OPEC is next scheduled to meet in June, though in times of market turmoil, the group has frequently convened emergency meetings. "We need to give the market patience and time to balance itself," a Gulf OPEC delegate told The Wall Street Journal on Wednesday. Brent crude, the global benchmark, inched up 0.1% to $51.15 a barrel on Wednesday after falling below $50 during intraday trading. Benoît Faucon and Summer Said contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642805735
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642805735?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Boosts Support for Latin Leftists; China Pledged Billions of Dollars of Financing to Venezuela and Ecuador, Two South American Energy Exporters Battered by Falling Oil Prices
Author: Alvaro, Mercedes; Minaya, Ezequiel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract: None available.
Full text: China pledged billions of dollars of financing to Venezuela and Ecuador, two South American energy exporters battered by falling oil prices, as Beijing moved to secure resources and allies in the region. China has increased its diplomatic clout throughout Latin America by extending more than $100 billion in credit to the region since 2005, according to figures from Boston University's Global Economic Governance Initiative. On Thursday Chinese President Xi Jinping said China's foreign investment in Latin America would hit $250 billion over the next decade, without offering details. Beijing has become the biggest foreign financier of both Venezuela and Ecuador, two oil-rich, leftist allies eager to help counter U.S. sway in the region. Following a meeting with President Xi, his Venezuelan counterpart Nicolás Maduro announced bilateral accords that would bring $20 billion in new investment to Venezuela. Ecuador said it secured $7.5 billion in financing. Both Mr. Maduro and Ecuadorean President Rafael Correa were in Beijing along with officials from various Latin American nations to take part in a regional gathering. Both Latin countries, highly dependent on oil exports to pay for heavy public spending, were in need of a helping hand as crude prices tumble to less than half of their level from several months ago. A barrel of oil sold for about $50 on Wednesday. Last week, Venezuela's central bank released long-delayed figures, revealing the country entered a recession in 2014. Venezuela needs oil to average around $117.50 a barrel to balance its 2015 budget, according to Deutsche Bank estimates. In Ecuador, officials have reported a slowing economy, with growth of 3.4% in the third quarter, down from 5.6% in the July-through-September period in 2013. Mr. Maduro, who has seen his approval rating swoon along with oil prices, offered few details on the new accords with China, which he said involved projects in the energy, industrial and housing sectors. The Venezuelan leader, who has struggled to keep supporters happy amid shortages of basic goods, praised China for coming to the rescue. "The economic war against our people and the oil-price war is an opportunity to grow closer to our allies," said Mr. Maduro, who has blamed Venezuela's spiraling economy on an alleged plot by enemies of his leftist government. Venezuela is slated to hold hotly contested legislative elections in December that many analysts see as a referendum on Mr. Maduro's performance. At a daily news briefing on Wednesday, Chinese Foreign Ministry spokesman Hong Lei said "Relevant financing cooperation is going smoothly" with Venezuela. State-run China Central Television paraphrased President Xi as calling for "promoting oil development" in a meeting with Mr. Maduro. Experts said it was unclear without further details what kind of impact the new financing would have on the Venezuelan and Ecuadorean economies. China has extended to Caracas some $50 billion in credit since 2007 in exchange for guaranteed oil. It has committed more than $12 billion in financing to Ecuador between 2009 and 2014. Wednesday's agreement underscored China's continuing support for Mr. Maduro despite his political woes, said Risa Grais Targow, senior Latin America analysts for Eurasia Group. "This is because the Chinese are heavily exposed to Venezuela and are likely concerned about the prospect of regime change," she said in a client note. Charles Hutzler and Benoît Faucon contributed to this article. Write to Mercedes Alvaro at and Ezequiel Minaya at Credit: By Mercedes Alvaro And Ezequiel Minaya
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642805904
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642805904?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Shares Rise; Crude-Oil Futures Gain, Giving Lift to U.S., Asian Shares
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract: None available.
Full text: Stocks were mostly higher in Asia after a bounce in crude oil prices eased some pressure on markets from Japan to Australia. The Nikkei Stock Average gained 1.2% and Korea was up 1.0%. Hong Kong rose 0.9% and Australia gained 0.6%. Selling globally abated, as gained 1.5% to $48.65 a barrel, snapping a four-session losing streak. , which pushed the S&P 500 to a higher close for the first time in six sessions, also helped stabilize Asian shares Wednesday. Still, Toshihiko Matsuno, senior strategist at SMBC Friend Securities, said that "concerns over Greece, the euro, and weak oil prices are still enough to push investors into another deep 'risk-off' mood." The U.S. dollar was up modestly, at ¥119.39, from ¥119.26 late Wednesday in New York, giving a slight lift to Japanese exporters repatriating dollar earnings from overseas. Among the strongest gainers, Toyota Motor Corp. was up 1.3% and Honda Motor Co. Ltd. was up 1.6%. The rebound excluded China's mainland, where the Shanghai benchmark wavered near flat. In Korea, after it announced strong sales of its Galaxy Note 4 smartphone-tablet hybrid in the fourth quarter, helping mitigate a fifth-straight quarter of decline in profits. Write to Chao Deng at Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642814240
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642814240?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Brent Oil Prices Slip; U.S. Oil Futures Edge Up; Ample Global Supplies, Tepid Demand Weigh on Brent Prices
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract:
Total supplies of crude oil and petroleum products in the U.S. hit their highest weekly level on record last week, according to the Energy Information Administration.
Full text: The global oil benchmark fell to a fresh nearly-six-year low Thursday on continued worries about ample global supplies. The U.S. benchmark settled slightly higher for the second straight day, but market watchers said any rally was unlikely to be sustainable, given record-high inventory levels. Prices plunged nearly 50% in 2014 and have continued to drop sharply this year. Global supplies are growing, despite an already amply supplied market and tepid demand. Brent, the global benchmark, fell 19 cents, or 0.4%, to $50.96 a barrel on ICE Futures Europe, the lowest settlement since April 2009. "We've got a really big supply to slog through," said Andy Lebow, senior vice president for energy at Jefferies LLC. "The upside may be somewhat limited until we work through some of this inventory." U.S. oil futures settled up 14 cents, or 0.3%, at $48.79 a barrel on the New York Mercantile Exchange. The price rise was likely due to traders taking profits after a sharp price drop earlier this week and end users locking in low prices for physical oil, market watchers said. "Some are trying to buy the bottom here. Others are just covering their [bets on lower prices], waiting for the next leg down," said Jason Williams, an energy broker at Coquest Inc., a Dallas brokerage. "The fundamental picture is still very bearish." Some investors are eager to bet that oil prices are near a bottom. "Some high-net-worth clients of ours have started to take the contrary position when it comes to the rout in oil prices," said Naeem Aslam, chief analyst at broker Avatrade. His clients are adding to their positions in dividend-paying oil companies such as Chevron Corp. and Exxon Mobil Corp., he said. "Every time we had a drop in the oil price of 50%, in the following six months oil companies have gained nearly 53% in value," Mr. Aslam said. "Now is a good time to buy in." Total supplies of crude oil and petroleum products in the U.S. hit their highest weekly level on record last week, according to the Energy Information Administration. U.S. production also rose in the week, adding to concerns that the global glut of oil will persist in the coming months. BNP Paribas SA cut its 2015 oil-price forecasts on Thursday to $60 a barrel for Brent and $55 a barrel for the U.S. benchmark, down from its late November estimates of $77 and $70 a barrel, respectively. The price of oil will respond more to supply than to demand this year, the bank said, "with the market focusing on how the current supply surplus will ultimately resolve itself." The bank expects prices to rise above $60 a barrel in the second half of the year. Gasoline futures for February delivery settled up 0.33 cent, or 0.3%, to $1.3409 a gallon. Diesel futures rose 1.11 cents, or 0.7%, to $1.7110 a gallon. Georgi Kantchev contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Inventory; Supplies
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Jefferies LLC; NAICS: 523110; Name: New York Mercantile Exchange; NAICS: 523210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1642992687
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1642992687?accountid=7117
Copyright: (c) 2015 Dow Jones & Compan y, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Shell to Pay for Oil Spills in Nigeria --- Settlement of $80 Million in Compensation for Fishing Community Follows a Protracted Legal Battle
Author: Coker, Margaret; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Jan 2015: A.8.
Abstract:
The out-of-court settlement comes after an often-acrimonious legal battle in which fishermen and tribal elders of the Bodo community in the Niger Delta had demanded restitution for loss of livelihood caused when a broken Shell pipeline gushed tens of thousands of barrels of oil into the creeks and swampy mangrove forests where residents fish and get water.
Full text: Royal Dutch Shell PLC agreed to pay about $80 million to compensate a Nigerian fishing community for two oil-pipeline spills in 2008 and 2009, in one of the largest environmental payouts in the African country. The out-of-court settlement comes after an often-acrimonious legal battle in which fishermen and tribal elders of the Bodo community in the Niger Delta had demanded restitution for loss of livelihood caused when a broken Shell pipeline gushed tens of thousands of barrels of oil into the creeks and swampy mangrove forests where residents fish and get water. The U.K. lawyer representing the claimants said his clients were overjoyed with their victory. "They are pleased that they have finally gotten justice and that Shell has recognized . . . their suffering," said Martyn Day, partner at London-based solicitors Leigh Day. Shell called the settlement a fair response to the two pipeline spills. "From the outset, we've accepted responsibility for the two deeply regrettable operational spills," said Mutiu Sunmonu, managing director of Shell's Nigeria arm. Shell has operated in Nigeria for decades, but in recent years it has struggled with pipeline leaks and other environmental and security problems, some tied to oil theft. The company has been trying to exit many of its onshore operations in the country. In November, it sold its stake in certain oil wells and processing plants to a Nigerian company for about $600 million. It sold other Nigerian assets in October. The Bodo legal case had been one of the long-term headaches facing the company in Nigeria. The case involves two spills along the Trans Niger Pipeline, operated by Shell, which takes oil from its fields to the export terminal on the coast. It carries about 150,000 barrels of oil a day. Bodo residents say oil seeped into their local waterways for weeks because of these two spills. In August 2011, Shell admitted liability for the spills, but it disputed the extent of the damage. The company's Nigerian division originally offered the community total compensation of GBP 4,000, or about $6,050. A Bodo fisherman, angered by what he considered an extraordinarily low offer, emailed Mr. Day in London asking for his help. "The whole case started off with a Nigerian email," Mr. Day said. "Funny that." Compensation talks broke down in 2013 amid arguments over the environmental toll and the amount of people affected by the spills. The original claim prepared by the British lawyers named 11,000 villagers. That number expanded to 15,601, including 2,000 children and their fishermen parents. Experts testifying on behalf of the Bodo community estimated from satellite technology that around 100,000 barrels of oil spilled in the waterways in these incidents and have contaminated at least 23 square miles of coastland. Shell disputes this figure. A spokeswoman said the company maintains that "a far smaller area was directly impacted." In the fall of 2014, the villagers' legal team filed suit against Shell in London, amid stalled negotiations. The compensation deal was reached before Christmas, but Mr. Day needed to spend weeks overcoming a major logistical challenge: coaxing retail banks to come to the remote village so the claimants could open bank accounts into which the settlement could be paid. Each of the claimants will receive $3,300, Mr. Day said. The remaining $30 million from the settlement will be set up in a community escrow fund for local development projects. Shell said it is now committed to starting a cleanup process of the area. --- Justin Scheck contributed to this article. Credit: By Margaret Coker and Benoit Faucon
Subject: Petroleum industry; Litigation; Settlements & damages; Fishing industry; Oil spills
Location: Niger Delta Nigeria
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Classification: 9190: United States; 8510: Petroleum industry; 8400: Agriculture industry; 4330: Litigation
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.8
Publication year: 2015
Publication date: Jan 8, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643076041
Document URL: https://login.ezproxy.uta.e du/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643076041?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Trade Gap Narrows as Oil Offsets Soft Exports
Author: Morath, Eric
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Jan 2015: A.2.
Abstract:
A strengthening dollar and slowing economies in Europe and Asia were expected to cause global trade to be a drag on fourth-quarter economic output, but the latest figures the Commerce Department released Wednesday show lower oil imports are narrowing the trade gap, which aids growth figures.
Full text: The U.S. economy appears to be maintaining its strong momentum in part because falling oil prices are offsetting weaker demand overseas. A strengthening dollar and slowing economies in Europe and Asia were expected to cause global trade to be a drag on fourth-quarter economic output, but the latest figures the Commerce Department released Wednesday show lower oil imports are narrowing the trade gap, which aids growth figures. The trade deficit fell 7.7% to a seasonally adjusted $39 billion in November. The reading marks the smallest deficit since December 2013 and is causing many economists to bolster gross domestic product forecasts. Barclays lifted its fourth-quarter GDP forecast to a 3.5% gain from a 2.7% advance following the trade report. Macroeconomic Advisers projected 3% growth, up from a prior forecast of 2.7%. Credit Suisse moved its estimate to a 3.2% advance from 2.9%. If those projections hold, the economy will have grown at 3% or better pace for three straight quarters -- the longest such streak since 2004 and 2005. "This drop in oil prices is just a big net positive for the U.S. economy," Stuart Hoffman, chief economist at PNC Financial Services Group. "If that didn't happen, we wouldn't be able to sustain the momentum we've seen." Along with lower gasoline prices, consistent hiring and improving confidence are supporting U.S. consumer spending. That propelled the economy to grow at a 5% pace in the third quarter. The November trade gap narrowed because imports declined 2.2% from October to $235.36 billion, while exports decreased 1% to $196.36 billion. Crude oil was the primary driver of the falling import number. Imports of petroleum, as measured in dollars, were the lowest since August 2009. After topping $100 a barrel last summer, oil prices steadily declined during the fall and dipped below $50 a barrel this week. The average price of a barrel of crude oil fell to $82.95 in November, down from $94.69 a year earlier, the Commerce Department said. Nonpetroleum imports were down slightly in November, on a seasonally adjusted basis, but imports of consumer goods were the highest on record. The decline in exports for November was driven by weaker shipments of civilian aircraft, a volatile category. U.S. firms also shipped fewer computers, generators and other types of machinery in November. The slowdown in capital-goods shipments could be a positive signal for the U.S. because it indicates recent weak readings for factory output are likely driven by lackluster foreign demand rather than a slowdown in domestic investment. Exports were an early driver of the expansion that began in 2009, but the pace of gains has slowed in recent years. U.S. firms are facing a number of challenges to boosting sales abroad, including weak economic output readings from Japan to Europe to Brazil. Credit: By Eric Morath
Subject: International trade; Exports; Economic conditions; Trade deficit
Location: United States--US Asia Europe
Classification: 9180: International; 1300: International trade & foreign investment
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Jan 8, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643076219
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643076219?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gasoline Prices Slide Even Further --- Futures Fall to Lowest in Nearly Six Years After Data Show Oil Stockpiles Climbing to Record High
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Jan 2015: C.1.
Abstract:
Weekly inventory data released by the federal Energy Information Administration reinforced the belief among many investors and traders that increasing oil output continues to overwhelm the growth in demand, a situation that is likely to further undercut prices across the board.
Full text: Prices at the gas pump are heading even lower. Gasoline futures fell to nearly a six-year low on Wednesday after U.S. government data showed oil and fuel supplies rising to a record high last week, the latest evidence of a petroleum glut that has rattled financial markets and raised questions about the strength of global economic growth. U.S. crude-oil prices rose modestly, but there was little indication that the market, which has plunged by 55% since late June, has hit a bottom. Weekly inventory data released by the federal Energy Information Administration reinforced the belief among many investors and traders that increasing oil output continues to overwhelm the growth in demand, a situation that is likely to further undercut prices across the board. U.S. stockpiles of crude oil, refined fuels and other types of petroleum rose 0.9% to 1.149 billion barrels in the week ended Jan. 2, according to the EIA. That is the highest level ever in weekly data dating back to 1990, and beats the previous high set in June 2013. The total doesn't count the barrels held in the nation's strategic petroleum reserve. "There is no shortage, anywhere, at the moment," said Donald Morton, senior vice president of Herbert J. Sims & Co., who oversees an energy-trading desk at the Fairfield, Conn., investment bank. "Our inventories are getting high." Minutes from the latest Federal Reserve meeting, also released Wednesday, indicated that central-bank officials expect low oil prices to ultimately be positive for the economy. But some voiced concern that the drop signaled slowing growth outside the U.S., a potential headwind for the U.S. economy. The decline in oil prices is expected to keep inflation running below the Fed's 2% target in the near term. The large increases in fuel stockpiles suggest that the glut of crude oil is morphing into a glut of refined products, and that demand isn't rising rapidly enough to absorb the growing supplies. U.S. consumption of petroleum products fell slightly in the week, the EIA said. The lower demand could be due to moderate winter weather, which likely lowered heating-oil consumption, analysts said. Gasoline inventories rose by 8.1 million to 237.2 million barrels, the highest level since February 2011, according to the EIA. Analysts expected an increase of 3.2 million barrels. Distillates, a fuel category that also includes heating oil as well as diesel, posted their biggest weekly gain on record, according to the EIA data. Inventories rose by 11.2 million barrels, compared with expectations for a 2.3-million-barrel increase, to their highest since March 2012. "This is clearly an extraordinary build" in distillates, said Andy Lipow, president of Lipow Oil Associates, a Houston consulting firm. "Refineries are continuing to turn the crude-oil surplus into a petroleum-product surplus. . . . They're hoping that the demand materializes." Gasoline futures fell 1.2% to $1.3376 a gallon, the lowest level since March 2009, while diesel futures lost 1.5% to $1.6999 a gallon, the lowest since September 2009. The decline in gasoline futures portends further drops in the price of gas at the pump, which tends to lag behind trends in wholesale markets by several days. A gallon of regular gasoline in the U.S. averaged $2.19 on Wednesday, according to AAA. Pump prices are at their lowest since May 2009 and have fallen for a record 104 consecutive days, according to the motor club. Economists say the fall in pump prices has been a boon for consumers, and investors are betting that retailers will benefit from more spending money in Americans' wallets. While cheaper pump prices are expected to bolster the consumer-driven U.S. economy, the underlying reason -- sharply lower crude-oil prices -- have shaken stocks and bonds of oil-producing companies and regions that have benefited from the U.S. oil boom. U.S. oil prices rose 1.5% on Wednesday to $48.65 a barrel on the New York Mercantile Exchange following two days of steep losses. Crude-oil supplies fell by 3.1 million barrels last week, counter to analysts' expectations of a 300,000-barrels build. Few traders and analysts think oil is poised for a sustained rebound. Members of the Organization of the Petroleum Exporting Countries haven't asked for an emergency meeting despite the plunge in oil prices. OPEC's decision in November to keep production steady was a major catalyst in oil's selloff. --- Benoit Faucon and Summer Said contributed to this article. Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 8, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643076222
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643076222?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Big Oil's Dilemma: Borrow or Save?
Author: Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]08 Jan 2015: B.1.
Abstract:
[...]companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC must decide whether to risk future earnings by cutting developments, risk upsetting investors by cutting dividends, or take on big debt in the hope that oil prices will soon recover.
Full text: For years, big oil companies have been spending more money than they bring in. With oil prices down more than 50% since last June, that is becoming an ever trickier way to run their businesses. The cost of developing new fields has ballooned over the past decade, while investors have kept pressing for high dividends. The result: Companies have spent more on capital costs and mollifying investors than they reap in cash flow. Now, companies including Exxon Mobil Corp., Royal Dutch Shell PLC and BP PLC must decide whether to risk future earnings by cutting developments, risk upsetting investors by cutting dividends, or take on big debt in the hope that oil prices will soon recover. The big companies have indicated they won't cut shareholder payouts in the near future, but investors and analysts say producers can weather low oil prices only for so long. "There is no doubt dividends are under serious threat," says Michele della Vigna, an analyst with Goldman Sachs Group Inc. He says oil companies will have to cut capital spending by 30% in three years' time if oil settles at around $70 a barrel, if they want to preserve their payouts. Brent crude fell 0.8% to $50.69 a barrel on the ICE Futures Europe exchange on Wednesday, having briefly traded below $50 a barrel for the first time since 2009. Even when oil traded at over $100 a barrel in recent years, major oil companies consistently needed to borrow to cover their outlays. A Citi Research analysis of 12 of the world's biggest nonstate-owned oil companies says their cumulative spending on dividends and capital investment -- excluding certain acquisitions -- was 24% higher than their cash flow in 2013, and has similar estimates for 2014. Shell had $40 billion in net cash flow in 2013. But, Citi says, Shell's capital spending and dividend payments outstripped cash flow by 36%. Exxon's cash flow exceeded its dividend and capital spending each year from 2008 to 2013, Citi says, with the exception of 2009. But Citi estimates its shareholder payouts and investment will exceed cash flow by 22% in 2015. Exxon said it will lay out its capital spending plans for 2015 in March. Shell Chief Executive Ben van Beurden has said in recent months that last year's capital spending would be lower than 2013's. A spokesman said the company has enough borrowing capacity to maintain dividend and capital spending levels "for a reasonable period of time." Shell's gearing -- or debt as a percentage of the company's capital -- was 13% last year, Citi says. The company has said it can afford to bring that number up to 30%. BG Group PLC's dividend and capital spending exceeded cash flow by 47% in 2013, Citi says, and estimates that number rose to 58% last year. A BG spokesman said the company has finished large projects responsible for "the biggest investment period in the company's history." Eni SpA's capital and dividend spending exceeded cash flow by 59% in 2013, Citi says, though it estimates that fell to 18% last year. An Eni spokeswoman said the company has had a cost-cutting plan in place since summer. BP's dividend plus capital investment last year was 2% higher than its cash flow, according to Citi estimates. The bank expects that number to rise to 24% this year. BP's chief financial officer last year said the company's "first priority within the financial framework will always be to the dividend." Using debt to cover dividend and capital investments isn't necessarily a problem, especially given the current low interest rates globally. That is the gamble that many companies took in recent years, as they poured money into giant development projects. And even now, the gearing for the world's four biggest nonstate-controlled oil companies is below 20%, which analysts say is a healthy level. But while the need to borrow in past years came from a decision to invest heavily in growth, borrowing in the near future will be to make up for lost revenue from the oil price drop. Richard Champion, the chief investment officer at Sanlam Private Investments, which was heavily invested in Shell and held shares in BP as of October, expects that if oil prices don't rebound in the next two years, big oil companies will have to either cut their dividends or invest less in new projects, imperiling their output. "These guys are in a really hard spot," he said. Credit: By Justin Scheck
Subject: Capital costs; Capital expenditures; Petroleum industry
Location: United States--US
Classification: 9190: United States; 8510: Petroleum industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 8, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643076240
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eurozone Retail Sales Rise as Fall in Oil Prices Spurs Consumer Spending; Falling Oil Prices Boost Purchases of Other Goods
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract:
Retail sales in the eurozone rose for the second straight month in November, an indication that falling oil prices are boosting purchases of other goods and helping to support economic growth.
Full text: Retail sales in the eurozone rose for the second straight month in November, an indication that falling oil prices are boosting consumer spending and helping to support economic growth. Still, any rapid turnaround in the eurozone's economic fortunes seems unlikely in early 2015. A separate survey also released Thursday found that manufacturers became less optimistic about their prospects as 2014 drew to a close, as the flow of new orders weakened and inventories began to build up. The European Union's statistics agency, Eurostat, said retail sales rose by 0.6% for the second straight month, bringing the rise from November 2013 to 1.5%. That suggests the fall in oil prices has left households with more money to spend on other goods and services. The pickup was driven by a 1.4% rise in sales of goods other than food and gasoline. The strong rise in sales over October and November may ease fears that the eurozone is at risk of a , a self-perpetuating spiral in which consumers postpone purchases because they expect prices to drop, leading to a fall in output and further declines in prices. Figures released Wednesday showed consumer prices were lower in December than a year earlier, the first such decline since 2009. The recent drop in oil prices is "good news for the European economy," European Central Bank executive board member Benoît Coeuré said Thursday, because it boosts the purchasing power of households and businesses and may lift spending. The flip side, he said, is that it puts the ECB further away from achieving its inflation target of just below 2%. "The eurozone isn't in deflation," Mr. Coeure said in a television interview with France 24. Consumer spending was the main support to otherwise very weak growth in the eurozone during 2014, rising 0.5% in the third quarter after increases of 0.3% in the second and 0.2% in the first. Surveys of purchasing managers released Tuesday suggested the in the final three months of the year, having barely grown in the first three quarters of 2014. While consumer confidence rose in December as oil prices fell, the European Commission's monthly sentiment survey revealed a surprise drop in manufacturing confidence. Though sentiment improved in the services, retail and construction sectors, the decline in manufacturing kept the Economic Sentiment Indicator--a measure of consumer and business confidence--unchanged at 100.7 in December. Economists had expected a rise to 101.3. In contrast to consumer spending, business investment fell in the second and third quarters. The decline in manufacturing confidence suggests a significant pickup is unlikely soon. While businesses may be encouraged by lower energy costs, they also face pressure to cut their own prices as demand remains weak. Eurostat said on Thursday that prices of goods leaving the eurozone's factory gates fell by 0.3% in November after a similar decline in October. Compared with November 2013, prices were down 1.6%. Brian Blackstone contributed to this article. Write to Paul Hannon at Corrections & Amplifications November's rise brings the increase since November 2013 to 1.5%. A previous version of this article misstated the year as 2014. (Jan. 8, 2015) Write to Paul Hannon at Credit: By Paul Hannon
Subject: Manufacturing; Eurozone; Statistical data
Company / organization: Name: European Commission; NAICS: 928120; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643108491
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Inflation Rates Fall as Oil Prices Drop; Slowdown Reflects Weakening Global Economy, Says OECD
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract:
According to the OECD, consumer prices were lower than a year earlier in 10 of its members, all but one of which was in Europe: Belgium, Estonia, Greece, Hungary, Israel, Poland, Slovenia, Spain, Sweden and Switzerland In November, inflation rates slowed in every major OECD member except Italy, while prices also rose more slowly in a number of large developing economies, including China, India, and South Africa.
Full text: Inflation rates across the world's largest economies eased for the sixth straight month in November as , a decline that is likely to continue over coming months. The Organization for Economic Cooperation and Development Thursday said the annual rate of inflation in its 34 members was 1.5% in November, down from 1.7% in Oct. Among the Group of 20 leading developed and developing economies, it fell to 2.3% from 2.5%, continuing a decline that began in June. The G-20 accounts for 90% of global economic activity. reflect the disappointingly weak performance of the global economy in 2014 and falling energy prices. Across the OECD's membership, energy prices were down 2.1% in the 12 months to November, having fallen by just 0.3% in the 12 months to October. Oil prices have fallen even more sharply in December and the early weeks of January, an indication that inflation rates are also likely to continue their long decline. Minutes of the Federal Reserve's December meeting released Wednesday showed officials are increasingly concerned that could hurt some major U.S. trading partners, potentially weighing on U.S. growth. Fed officials said the oil-price decline--more than 50% in the past year--could exacerbate deflationary pressures overseas. According to the OECD, consumer prices were lower than a year earlier in 10 of its members, all but one of which was in Europe: Belgium, Estonia, Greece, Hungary, Israel, Poland, Slovenia, Spain, Sweden and Switzerland In November, inflation rates slowed in every major OECD member except Italy, while prices also rose more slowly in a number of large developing economies, including China, India, and South Africa. Russia was one of the main exceptions to the overall trend, its inflation rate surging as the ruble suffered a sharp depreciation. The Fed's concerns became public on the same day that the European Union's statistics agency said consumer prices were lower in December than a year earlier, the first such drop since 2009. When inflation is low, companies, households and even governments have a harder time cutting their debt loads, a particular problem for a number of highly-indebted nations in the eurozone. And while very low inflation or falling prices can help boost real incomes, it can also make households and businesses postpone spending and investment. Some economists say it is the biggest problem facing the global economy as it enters 2015, and will likely lead to further stimulus efforts by a number of central banks, while others will wait longer to raise their benchmark interest rates from unusually low levels. Write to Paul Hannon at Credit: By Paul Hannon
Subject: Inflation; Economic development; Consumer Price Index
Location: United States--US
Company / organization: Name: Organization for Economic Cooperation & Development; NAICS: 928120; Name: Group of Twenty; NAICS: 926110; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643108495
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643108495?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Bank of England Leaves Rates Unchanged; Weakening Oil Prices Push Inflation Below Target
Author: Douglas, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract: None available.
Full text: LONDON--The Bank of England left its main interest rate unchanged Thursday as threaten to push annual inflation in the U.K. further below the central bank's target. The BOE said in a statement its rate-setting Monetary Policy Committee opted to leave the central bank's benchmark interest rate at 0.5% at its January meeting. The nine-member panel also chose to keep the size of the BOE's bond portfolio at £375 billion ($567 billion). Sterling and U.K. government bonds were broadly unmoved following the decision, which was expected. Mark Carney, governor of the BOE said in November he expects annual inflation in the U.K. will soon dip below 1%, a decline that would oblige him to write an open letter to Treasury chief George Osborne explaining why yearly price growth had moved more than a percentage point away from the BOE's 2% target. Annual inflation in the U.K. was last. Analysts at Goldman Sachs said in a recent research note they expect December's inflation reading, due Jan. 13, to be "the first of many below 1%," citing tumbling fuel prices. BOE forecasts show it could take until late 2017 to bring inflation back to target, despite predictions of healthy growth and a further decline in unemployment. Other central banks are also battling feeble price growth. The European Central Bank is later this month aimed at stoking inflation and lifting growth in the struggling 19-nation currency area. Consumer prices in the eurozone declined on the year in December for the first time in five years, according to official statistics. Investors expect the BOE to keep its main interest rate on hold until early 2016, according to overnight lending rates that track the BOE's benchmark. The Federal Reserve is in the US in the middle of the year. Write to Jason Douglas at Credit: By Jason Douglas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643120112
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643120112?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mexico's Pemex Files Request to Import Light U.S. Crude; Oil Giant Looking to Improve Output at Its Mexican Refineries
Author: Guthrie, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract:
MEXICO CITY--Mexican state-run oil giant Petroleos Mexicanos said Thursday it has requested permission from the U.S. Commerce Department to import light crude to Mexico from the U.S., with the aim of improving output at its Mexican refineries.
Full text: MEXICO CITY--Mexican state-run oil giant Petroleos Mexicanos said Thursday it has requested permission from the U.S. Commerce Department to import light crude to Mexico from the U.S., with the aim of improving output at its Mexican refineries. The significant increase of light crude production in the U.S. presents an opportunity to mix that oil with Mexican heavy crude, and thus boost refining efficiency in Mexico, the company known as Pemex said. Pemex anticipates that it could import up to 100,000 barrels a day of light crude and condensates under the proposal, which it calls a "swap." America has a long-standing ban on exporting crude-oil pumped in the U.S., but the Commerce Department recently issued new rules clarifying that some ultralight oil can freely flow out of the country to foreign buyers. Dubbed condensate by the energy industry, this light oil no longer needs to be fully processed at a refinery before it is shipped out. Energy experts estimate that up to one million barrels of light oil pumped primarily in Texas is now eligible for export. The Mexican company exported, on average, 803,000 barrels a day of heavy crude to the U.S. last year to be processed at refineries there that are equipped to handle heavy crude. Pemex said the proposal doesn't imply a commitment to export additional crude to the U.S. Pemex's proposal would reduce transportation costs and improve refining margins, the company said, while maximizing the refining potential of facilities in both countries. The proposal was presented to U.S. authorities in 2014 and discussions are ongoing, the company added. After reaching record levels of crude exports in 2004 of around 1.8 million b/d, Pemex's exports last year were just over 1.1 million b/d. Write to Amy Guthrie at Credit: By Amy Guthrie
Subject: Petroleum industry; Petroleum refineries; Oil wells; Light
Location: United States--US
Company / organization: Name: Petroleos Mexicanos; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643218426
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643218426?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Ontario, Quebec Raise $2.54 Billion in Bond Sales; Canada's Provinces Take Advantage of Investor Appetite for Safety Amid Declining Oil Prices
Author: Dummett, Ben; Curren, Don
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract:
Canada's flagship stock market, the Toronto Stock Exchange, is up on Thursday but down 1.2% so far in 2015, as falling oil prices fan fears of slowing domestic economic growth.
Full text: TORONTO--Canada's two most populous provinces have raised 3 billion Canadian dollars ($2.54 billion) this week from the issue of new 10-year bonds, taking advantage of investor appetite for safety amid the market volatility driven by sliding crude prices. Thursday, Ontario raised C$1 billion from the reopening of its 10-year bond maturing in June 2025, according to a person familiar with the offering. The province, Canada's biggest, has sold a total of C$2 billion of the debt since it launched the bond on Tuesday. Its largely French-speaking neighbor, Quebec, launched a new 10-year bond on Wednesday, raising C$500 million, and doubled the proceeds when it reopened the bond on Thursday, according to a person familiar with a matter. In both cases, the provincial governments achieved slightly better pricing in the second issue. Canada's flagship stock market, the Toronto Stock Exchange, is up on Thursday but down 1.2% so far in 2015, as falling oil prices fan fears of slowing domestic economic growth. The Toronto exchange is heavily weighted in energy stocks. Global crude prices are down about 50% since last summer and continue to weaken as global supplies outstrip demand for the commodity. The uncertain environment spurs many investors to flock to the bond market for the steady income that debt securities generate. Bond markets are also benefiting from expectations that lower oil prices will result in lower overall inflation, which is a positive development for fixed-income assets. If you're a province, those are great levels to be issuing at," said Andrew Kelvin, senior fixed income strategist at TD Securities in Toronto. Canada is a major exporter of crude oil, but the industry is concentrated in the country's western provinces and on its east coast. Doubts about the negative impact of low oil prices on Canada's economy likely won't have much impact on investors' appetites for bonds from Ontario and Quebec, Mr. Kelvin said. The economics of those two provinces are heavily reliant on the manufacturing and service sectors. "If you look at the provinces that are doing the bulk of the issuing, they're the provinces that should benefit from lower oil prices," Mr. Kelvin said. Although substantially lower in midday trading Thursday, the Canadian bond market rallied sharply early in the week as both oil prices and stock markets declined. The yield for Canada's benchmark 10-year bond dropped to 1.62% on Tuesday, close to the record low of 1.58% registered in the summer of 2012. It has since risen to 1.714%, according to electronic bond trading platform CanDeal. When bond prices rise, yields fall. The current environment enables Canada's provinces, whose bonds typically trade at yields relatively close to the Canadian federal government, to issue longer-term debt at very low interest rates. Institutional investors are attracted to provincial bonds despite historically low yields as they are highly rated by bond rating firms, and viewed as being at very low risk of default. Write to Ben Dummett at and Don Curren at Credit: By Ben Dummett And Don Curren
Subject: Bond markets; Stock exchanges; Bond issues; Petroleum industry; Bond ratings; Institutional investments; Provinces
Location: Canada Quebec Canada
Company / organization: Name: Toronto Stock Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/ a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643218429
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643218429?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Price Drop Takes Shine Off Steel Town; Ohio Workers Who Benefited From Energy Boom Now Face Layoffs
Author: Miller, John W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Jan 2015: n/a.
Abstract: None available.
Full text: LORAIN, Ohio--The collapse of oil prices in the past six months is threatening to end a recent industrial revival in manufacturing centers like this town of 64,000 people on the banks of Lake Erie. The U.S. shale-drilling boom lifted Midwest manufacturing economies, enriched property owners with mineral rights and even brought back the fat blue-collar paychecks that once were harder to find. But as drilling and exploration for new oil and gas slow with the drop in energy prices, cutbacks at heavy-industry companies are cropping up. The U.S. Steel Corp. plant here, which depends heavily on oil and gas companies to buy its steel pipe and tubes, warned on Monday it might have to idle the plant in March and lay off 614 of the plant's 700 workers. The company also said it could temporarily end work at a plant in Houston, affecting 142 workers. The Pittsburgh-based steelmaker, the second-biggest employer in Lorain after Mercy Regional Medical Center, had recently invested $95 million in a plant upgrade. When energy prices were high and orders robust, workers received generous overtime, sometimes pushing annual salaries into six figures. "We thought this time the going was going to be good for a while," said Chase Ritenauer, the town's 30-year-old mayor. "But now Lorain is going to feel the impact of the global economy." U.S. Steel bet heavily on the energy industry. The company invested $215 million in capital expenditure in its so-called tubular division over the past three years, compared with $113 million in the five years before that. U.S. Steel is trying to get back in the black after five straight unprofitable years, including a $1.7 billion loss last year. A U.S. Steel spokesman declined further comment. At a tense meeting on Wednesday at the redbrick union hall on Broadway--a residential strip punctuated by bars and auto dealerships--union officials insisted that the Lorain plant could still stay open. Workers demanded more information, and many said they were nervous. "Yeah, I'm worried. You'd have to drive 50 miles to find another job like this one," said Dana Smith, a 43-year-old father of four and technician at the U.S. Steel plant. "I'll survive. I always do, but this will be hard." Mr. Smith, who said he makes $20 an hour, joined the mill 18 months ago, which could make him "probably be one of the first ones to go." U.S. Steel's pain will be shared. The plant gets its raw steel from another plant in Lorain, once owned by U.S. Steel and now controlled by Canton-based Republic Steel. If U.S. Steel shuts down here, business at Republic will dry up, too. Other suppliers and contractors who work with the plant also will suffer. Republic was unavailable for immediate comment. In addition, a half-dozen new plants providing steel for the oil and gas industry have been built in the past five years from Ohio to Texas. Boosted by the energy industry, Ohio's unemployment rate has fallen to 5%, the lowest in 13 years. In nearby Youngstown, Ohio, Vallourec SA of France recently opened a $650 million plant able to produce 500,000 tons of steel a year. "We are looking at oil price trends very cautiously and closely monitoring our customer's activity," said Héloïse Rothenbühler, a spokeswoman for Vallourec. "The oil and gas sector is, by nature, cyclical, and we've adapted to similar cycles in the past," she said. In addition to new capacity, imports to the U.S. have surged, fueling a steel glut. Prices in the U.S. for benchmark hot-rolled coil have dropped 10% in the past four months, to $600 a ton. "It's two steps forward, one step back," said Lisa Goldenberg, president of Delaware Steel Co., a steel trading company. "Right now, it's one step back." Don Tettaton, a 48-year-old crane operator at Republic Steel whose brother works for U.S. Steel, said he counsels younger workers to get ready for some pain. "I tell them not to go out and get a new house, a Harley and a $600 car payment," he said. "There has never been a steel industry without boom and bust." And times have been very good. "With overtime, guys have been making over a hundred thousand [dollars a year]," he said. The impact of the energy industry here is so widespread that for some workers in Lorain, oil prices affect almost every facet of their lives, from home values to roads to jobs. Last summer, a drilling company offered Rick Lucente, a 63-year-old steelworker at Republic Steel and a city councilman, $180,000 for the mineral rights to his property in Harrison County, Ohio. He said no. In December, with oil prices going South, he agreed to sell for $132,000. There is one small piece of good news: The almost-monthly gas bill for his Chevy pickup truck has dropped to about $300 from $400. "That's not going to replace a paycheck," he said. "And I don't know why this is happening, something to do with Russia." Mr. Lucente found out from workers on Saturday night that U.S. Steel would issue its layoff warning. On Sunday night, he called Mr. Ritenauer, the mayor. The two men discussed how a U.S. Steel shutdown would hurt city finances. The company paid $1.8 million in taxes last year out of a total city budget of $30 million. A shutdown for even a quarter could cost the city $400,000, Mr. Ritenauer said. "That might not sound like a lot, but our city budgets are usually pretty tight." The lower oil prices will offer some modest savings. Lorain has around 100 police officers. "And it's snowplowing season," said Mr. Ritenauer. But the fuel bill for its snowplows is in the mere tens of thousands of dollars. Savings might be 30%. "We'd rather the plant stay open," he said. Write to John W. Miller at john.miller@wsj.com Credit: By John W. Miller
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 8, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643236189
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643236189?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Tumbles to Seventh Straight Weekly Loss; Bearish Fundamentals Continue to Weigh on Market
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Jan 2015: n/a.
Abstract:
Hedge funds, pension funds and other investors added nearly the same number of bullish and bearish bets on Nymex oil prices in the week, according to the U.S. Commodity Futures Trading Commission.
Full text: Oil prices tumbled to their seventh consecutive weekly loss on Friday as concerns about a crude glut intensified. Crude-oil futures have plunged more than 50% since June amid rising world output coupled with lackluster demand growth, and the latest losing streak is the biggest since the 2008 financial crisis. Brent crude, the global benchmark, fell 1.7% to a new more-than five-year low of $50.11 a barrel on Friday. Prices fell 11% in the week, the biggest weekly drop since late November, when the Organization of the Petroleum Exporting Countries opted to maintain its production quotas. Brent fell below $50 a barrel during intraday trading on Friday. Traders and investors said there wasn't a specific driver behind Friday's selloff. Market experts say oil output needs to be sharply curtailed for prices to stabilize. "We still have plenty of oil around the world," said Carl Larry, director of oil and natural gas at consulting firm Frost & Sullivan. Stored supplies of crude oil and petroleum products in the U.S. hit the highest level on record last week, according to data released Wednesday by the Energy Information Administration. U.S. oil for February delivery slid 43 cents, or 0.9%, to settle at $48.36 a barrel on the New York Mercantile Exchange. Prices fell 8.2% for the week. In the past seven weeks, Nymex crude has declined by 37%. The last time oil prices fell this much over a comparable time period was in late 2008. But prices pared losses later in the trading session after rig data from oil-service company Baker Hughes Inc. showed that the number of oil rigs operating in the U.S. fell by 61 in the week, the largest weekly drop since 1991. The oil-rig count has fallen for five straight weeks, an indication that U.S. producers may be pulling back on new production in response to low prices. However, the total number of oil rigs is still higher than a year ago. Drilling rigs are often used to find new oil deposits. It could take many months for a decline in drilling activity to lead to a decline in production, analysts say. U.S. production has surged in recent years as companies turned to hydraulic-fracturing and horizontal-drilling techniques to access supplies trapped in shale-oil fields. "You're seeing rigs getting shut down...but production's going to take some time to come off," said Tariq Zahir, managing member of Tyche Capital Advisors. Money managers were split in their views on oil prices in the week ended Tuesday. Hedge funds, pension funds and other investors added nearly the same number of bullish and bearish bets on Nymex oil prices in the week, according to the U.S. Commodity Futures Trading Commission. Their aggregate bet on rising prices rose very slightly in the week. Now that Brent has fallen below $50 a barrel intraday, "the big numbers people are probably watching are the 2009 lows," said Gene McGillian, senior analyst at brokerage Tradition Energy. In 2009, in the throes of a global recession, the U.S. contract fell below $34 a barrel, while Brent settled below $40 a barrel. The steep slide in oil prices that kicked off 2015 has prompted some banks to cut their price forecasts again, following a string of downward revisions last year. BNP Paribas SA slashed its oil price forecasts on Thursday. The bank expects Brent to average $60 a barrel this year, down from its November assumption of $77 a barrel. BNP also cut its projection for the U.S. benchmark by $15 a barrel to $55 a barrel. Commerzbank lowered its first-quarter Brent forecast Friday to $45 a barrel from $65 a barrel and cut its year-end Brent price to $75 from $80 a barrel. "While there has been some stabilization in recent days, it would take a very brave man to pick a bottom right now," said Tamas Varga, oil analyst at brokerage PVM. Gasoline futures for February delivery settled down 1.77 cents, or 1.3%, at $1.3232 a gallon, the lowest close since March 2009. Prices lost 7.7% this week. Diesel futures fell 0.8 cent, or 0.5%, to $1.7030 a gallon, posting a 5.2% weekly loss. Georgi Kantchev contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum industry; Price increases; Supply & demand
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Frost & Sullivan; NAICS: 541910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643289663
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643289663?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Steel Town Threatened As U.S. Oil Prices Fall
Author: Miller, John W
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Jan 2015: B.1.
Abstract:
The U.S. Steel Corp. plant here, which depends heavily on oil and gas companies to buy its steel pipe and tubes, warned on Monday it might have to idle the plant in March and lay off 614 of the plant's 700 workers. Last summer, a drilling company offered Rick Lucente, a 63-year-old steelworker at Republic Steel and a city councilman, $180,000 for the mineral rights to his property in Harrison County, Ohio.
Full text: LORAIN, Ohio -- The collapse of oil prices in the past six months is threatening to end a recent industrial revival in manufacturing centers like this town of 64,000 people on the banks of Lake Erie. The U.S. shale-drilling boom lifted Midwest manufacturing economies, enriched property owners with mineral rights and even brought back the fat blue-collar paychecks that once were harder to find. But as drilling and exploration for new oil and gas slow with the drop in energy prices, cutbacks at heavy-industry companies are cropping up. The U.S. Steel Corp. plant here, which depends heavily on oil and gas companies to buy its steel pipe and tubes, warned on Monday it might have to idle the plant in March and lay off 614 of the plant's 700 workers. The company also said it could temporarily end work at a plant in Houston, affecting 142 workers. The Pittsburgh-based steelmaker, the second-biggest employer in Lorain after Mercy Regional Medical Center, had recently invested $95 million in a plant upgrade. When energy prices were high and orders robust, workers received generous overtime, sometimes pushing annual salaries into six figures. "We thought this time the going was going to be good for a while," said Chase Ritenauer, the town's 30-year-old mayor. "But now Lorain is going to feel the impact of the global economy." U.S. Steel bet heavily on the energy industry. The company invested $215 million in capital expenditure in its so-called tubular division over the past three years, compared with $113 million in the five years before that. U.S. Steel is trying to get back in the black after five straight unprofitable years, including a $1.7 billion loss last year. A U.S. Steel spokesman declined further comment. At a tense meeting on Wednesday at the redbrick union hall on Broadway -- a residential strip punctuated by bars and auto dealerships -- union officials insisted that the Lorain plant could still stay open. Workers demanded more information, and many said they were nervous. "Yeah, I'm worried. You'd have to drive 50 miles to find another job like this one," said Dana Smith, a 43-year-old father of four and technician at the U.S. Steel plant. "I'll survive. I always do, but this will be hard." Mr. Smith, who said he makes $20 an hour, joined the mill 18 months ago, which could make him "probably be one of the first ones to go." U.S. Steel's pain will be shared. The plant gets its raw steel from another plant in Lorain, once owned by U.S. Steel and now controlled by Canton-based Republic Steel. If U.S. Steel shuts down here, business at Republic will dry up, too. Other suppliers and contractors who work with the plant also will suffer. Republic was unavailable for immediate comment. In addition, a half-dozen new plants providing steel for the oil and gas industry have been built in the past five years. Boosted by the energy industry, Ohio's unemployment rate has fallen to 5%, the lowest in 13 years. In nearby Youngstown, Ohio, Vallourec SA of France recently opened a $650 million plant able to produce 500,000 tons of steel a year. "We are looking at oil price trends very cautiously and closely monitoring our customer's activity," said Heloise Rothenbuhler, a spokeswoman for Vallourec. "The oil and gas sector is, by nature, cyclical, and we've adapted to similar cycles in the past," she said. In addition to new capacity, imports to the U.S. have surged, fueling a steel glut. Prices in the U.S. for benchmark hot-rolled coil have dropped 10% in the past four months, to $600 a ton. "It's two steps forward, one step back," said Lisa Goldenberg, president of Delaware Steel Co., a steel trading company. "Right now, it's one step back." Don Tettaton, a 48-year-old crane operator at Republic Steel whose brother works for U.S. Steel, said he counsels younger workers to get ready for some pain. "I tell them not to go out and get a new house, a Harley and a $600 car payment," he said. "There has never been a steel industry without boom and bust." And times have been very good. "With overtime, guys have been making over a hundred thousand [dollars a year]," he said. The impact of the energy industry here is so widespread that for some workers in Lorain, oil prices affect almost every facet of their lives, from home values to roads to jobs. Last summer, a drilling company offered Rick Lucente, a 63-year-old steelworker at Republic Steel and a city councilman, $180,000 for the mineral rights to his property in Harrison County, Ohio. He said no. In December, with oil prices going South, he agreed to sell for $132,000. There is one small piece of good news: The almost-monthly gas bill for his Chevy pickup truck has dropped to about $300 from $400. "That's not going to replace a paycheck," he said. "And I don't know why this is happening, something to do with Russia." Mr. Lucente found out from workers on Saturday night that U.S. Steel would issue its layoff warning. On Sunday night, he called Mr. Ritenauer, the mayor. The two men discussed how a U.S. Steel shutdown would hurt city finances. The company paid $1.8 million in taxes last year out of a total city budget of $30 million. A shutdown for even a quarter could cost the city $400,000, Mr. Ritenauer said. "That might not sound like a lot, but our city budgets are usually pretty tight." The lower oil prices will offer some modest savings. Lorain has around 100 police officers. "And it's snowplowing season," said Mr. Ritenauer. But the fuel bill for its snowplows is in the mere tens of thousands of dollars. Savings might be 30%. "We'd rather the plant stay open," he said. Credit: By John W. Miller
Subject: Steel industry; Petroleum industry; Natural gas utilities; Steel production; Towns; Crude oil prices; Steel pipes; Economic impact
Location: Lorain Ohio United States--US
Company / organization: Name: Republic Steel; NAICS: 327999; Name: US Steel Corp; NAICS: 331110
Classification: 9190: United States; 1110: Economic conditions & forecasts; 3400: Investment analysis & personal finance; 8660: Metalworking industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 9, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643323067
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643323067?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Shares Weighed Down by Banking Stocks; Markets Also Affected by Disappointing U.S. Wage Growth, Oil Price Fall
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Jan 2015: n/a.
Abstract:
On Thursday, stocks around the world had surged as investors bet that the European Central Bank will continue to flood financial markets with cheap money and that it would announce a program of sovereign bond purchases at a meeting later in January.
Full text: European shares fell on Friday, particularly weighed down by declines in financial stocks but also by disappointing U.S. wage growth data and a fresh tumble in the price of oil. The Stoxx Europe 600 subindex of banks ended the session more than 3.2% lower, pressured by a more than 14% decline in shares of Spanish lender Banco Santander after it launched a [euro]7.5 billion ($8.88 billion) capital hike . That also hurt the broader Madrid stock market which ended the session 3.9% lower, making it one of the region's worst performing indexes. Analysts at Berenberg said while they welcome Santander's "attempt to make a clean break with the past" by raising cash, it does undermine the credibility of the European Central Bank's health check, which Santander comfortably passed two months ago. "We see increased pressure on other banks to raise capital," Berenberg analyst Nick Anderson wrote in a note. Beyond financial stocks, European equities generally followed indexes on Wall Street lower Friday. The latest U.S. Jobs report came in stronger than expected, but many traders focused on an unexpectedly weak reading on wage growth. Steve Englander, a strategist at Citigroup also noted that while the unemployment figure might look good on the surface, "most of the unemployment rate drop was because of labor force leavers." On Thursday, stocks around the world had surged as investors bet that the European Central Bank will continue to flood financial markets with cheap money and that it would announce a program of sovereign bond purchases at a meeting later in January. But even that optimism was somewhat damped on Friday on information that ECB staff economists this week presented the bank's governing council with the implications of a potential [euro]500 billion government bond purchase program on inflation. "The market is likely expecting a larger program," said currency strategists at Scotiabank. Germany's DAX ended the day 1.9% lower, in line with France's CAC-40, having Thursday recorded its largest single-day point gain since October 2011. London's FTSE 100, after Thursday enjoying its largest single-day point gain since July 2013, ended 1.1% lower. The proportion of oil and gas related stocks in the FTSE meant that a late fall in the price of oil also hurt the index. Brent crude late afternoon slipped to $48.90 a barrel--yet another 5.5-year low--taking its decline so far in 2015 to almost 14%. It has now dropped more than 54% over the last six months. In currency markets Friday, the euro hit a fresh nine-year low against the dollar at $1.1763, still spurred by the prospect of further diverging monetary policy around the world. Goldman Sachs on Friday revised its forecasts for the euro to parity with the dollar at the end of 2016, and $0.9 at the end of 2017. Gold was 0.6% higher at $1,215.60. Brian Blackstone contributed to this article. Write to Tommy Stubbington at tommy.stubbington@wsj.com and Josie Cox at josie.cox@wsj.com Credit: By Tommy Stubbington and Josie Cox
Subject: Central banks; Euro; Stock exchanges; Banking; Unemployment
Location: United States--US
Company / organization: Name: Scotiabank; NAICS: 522110; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest documentID: 1643368202
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643368202?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Saudi Arabia's Cure for Shale Could Entail Shock Therapy; Oil Futures May Continue to Slump in Price War
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Jan 2015: n/a.
Abstract:
Crashing the oil price would both decimate the cash flows needed to fund existing debt and reduce the value of reserves that exploration and production companies often use as collateral for new loans.
Full text: In a price war, what counts is your ability to dish out pain and withstand it. Unfortunately for those counting on a rapid rebound in oil prices, Saudi Arabia's capacity looks ample on both fronts. Leaving aside geopolitical considerations, Saudi Arabia's apparent unwillingness to cut production to shore up oil prices reflects rational market strategy. With triple-digit oil having unleashed the genies of shale and demand conservation, artificially supporting prices would simply curb demand and shrink Saudi Arabia's market share further. Letting the price fall, while painful, at least plays to its key strength: low per-barrel production costs. For many oil-exporting countries, though, the more important price is the one it takes to cover swollen public budgets. In the wake of the Arab Spring, this isn't just an economic consideration. So while in strictly operational terms it might cost less than $20 a barrel to extract oil in Saudi Arabia, the "fiscal break-even" price is estimated to be around $90 to $100. But that is only half the equation. The other half is volume: If you are getting less money per barrel, one way of trying to cover your costs is to produce more barrels, if you can. There is a trade-off because the more barrels on the market, the lower oil prices go--at least until some producers needing even higher prices are forced out. The International Energy Agency pegs Saudi Arabia's spare capacity at about 2.8 million barrels a day. Bank of America Merrill Lynch estimates that if the country produced 12.5 million barrels a day, rather than its current 9.7 million, its fiscal break-even price would drop to $77. Such output, however, would imply selling oil to refiners at huge discounts and much of it would end up in storage tanks, crushing prices. So Saudi Arabia would still face big funding deficits. However, if the alternative is a drawn-out contest with rival producers, Riyadh might conclude it is better to rip off the Band-Aid. After all, Wood Mackenzie released on Friday its conclusions from a survey of 2,222 oil fields world-wide. Its analysis found that at $50 a barrel--around where Brent crude trades now--only 0.2% of oil supply faces negative cash flow. At $40, that rises--but only to 1.6%. At those price levels, investment in a lot of new fields would grind to a halt. But Saudi Arabia needs to see other producers cut existing production. Wood Mackenzie's numbers suggest shock therapy is needed. In addition, with foreign-exchange reserves roughly equivalent to annual gross domestic product, the country has some protection from the collateral damage. The U.S. shale boom's potential Achilles' heel is its reliance on easy credit to fund drilling. Crashing the oil price would both decimate the cash flows needed to fund existing debt and reduce the value of reserves that exploration and production companies often use as collateral for new loans. A rapid drop in price would also complicate the E&P industry's ability to adapt, either via orderly redeployment of resources to more productive fields or selling assets to better-capitalized major oil companies. Saudi Arabia appears to have gone for the nuclear option in maintaining output. But maybe you ain't seen nothing yet. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Prices; Energy economics
Location: Saudi Arabia
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643445816
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643445816?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fitch Cuts Ratings on Russia to Brink of Junk; Credit Rater Points to Sharp Declines in Oil Prices, Ruble
Author: Albanese, Chiara; Pollock, Lauren
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Jan 2015: n/a.
Abstract: None available.
Full text: Fitch Ratings cut its credit ratings on Russia to the brink of junk territory, saying the country's economic outlook has deteriorated significantly in the past six months amid sharp declines in oil prices and the ruble. The downgrade brings Fitch's ratings on Russia in line with those from Standard & Poor's Ratings Services. Fitch, which lowered its ratings by one notch to triple-B-minus, also said the Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks' access to external capital markets. The ratings outlook is negative as the ratings firm said it expects the Russian economy to contract by 4% this year, compared with its previous forecast of minus 1.5%, based on the slight growth seen in 2014. Fitch said continued exchange-rate volatility, sustained low oil prices and a faster-than-expected depletion of international reserves, among other things, could lead to further ratings cuts. The ratings assume oil prices will average $70 a barrel for 2015, well below the $100 a barrel assumed in July. Crude oil prices have dropped by about 50% from their summer highs and have flirted with $50 a barrel in recent sessions. The ruble, meanwhile, has declined sharply, in conjunction with oil prices. Analysts and investors said the downgrade was mostly priced in the market and it is unlikely to stem a significant selloff in Russian assets, which remain classified as investment grade. But a similar downgrade by another agency, which would lead to the reclassification of Russia as junk, would have a far bolder impact, analysts said. This could be not far off. Late last month, S&P said it was reviewing Russia's credit rating, with at least a 50% chance that it would lower the rating within the next 90 days. Moody's Investors Service downgraded Russia's debt to Baa 2--two notches above junk--in October, placing it under "negative outlook" status. "The country was put under negative watch [by S&P] two weeks ago, hinting a likely downgrade in the next few weeks. A downgrade from Moody's may come pretty much at the same time: statistically, nearly 60% of the rating actions are taken within the three to nine months after being placed under negative outlook status," said Régis Chatellier, a credit analyst at Société Générale. The bank is advising clients to remain underweight Russia. A rush of cuts below investment grade would see Russia taken out of most investment grade indexes, leading to a significant portfolio rebalancing. "Although there are significant cushions that underpin Russia's credit metrics, recent events have increased the risks of their accelerated erosion. If Russia lost its investment grade status, which would require two credit-rating firms moving the country to speculative grade, it would be excluded from global investment grade benchmark indices," Barclays said in a note Thursday. Russian assets, which sold off sharply in December as the country faced its worst financial crisis since 1998, had already partly priced the risk of a downgrade by the agency, according to market analysts. The ruble was trading around 61.64 against the dollar earlier Friday, far from the record lows hit in mid-December amid plunging oil prices and Western sanctions over Russia's intervention in Ukraine. The cost of insuring Russia's debt against a default of the country rose sharply in the first week of the year as oil prices continued to fall, with the cost of ensuring 10 million of Russian debt for 5 years rising to more than 600,000. The pressure has partly eased in the first days of January, with the cost at around 566,000 a year Friday. In separate moves Friday, Fitch affirmed its ratings on the Netherlands, Serbia, San Marino and Cote d'Ivoire. Its ratings on the Netherlands are at triple-A, while San Marino has investment-grade-ratings and Serbia and Cote d'Ivoire are in junk territory. Write to Chiara Albanese at chiara.albanese@wsj.com and Lauren Pollock at lauren.pollock@wsj.com Credit: By Chiara Albanese and Lauren Pollock
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643601230
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1643601230?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Keystone XL Pipeline Still Makes Economic Sense, Oil Industry Says; Canadian Producers and U.S. Refiners Would Benefit, but Project Appears Less Needed
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2015: n/a.
Abstract:
[...]hundreds of thousands more barrels of Canadian oil are starting to flow south daily to U.S. refineries, even without the Keystone project, making the need for the pipeline less urgent, said John Auers, executive vice president of Turner, Mason & Co., a consulting firm to refiners.
Full text: Despite the steep drop in oil prices, the proposed Keystone XL Pipeline from Canada to the Gulf Coast still makes economic sense for Canadian producers looking for new markets and for U.S. refiners looking for cheap oil, experts say. However, hundreds of thousands more barrels of Canadian oil are starting to flow south daily to U.S. refineries, even without the Keystone project, making the need for the pipeline less urgent, said John Auers, executive vice president of Turner, Mason & Co., a consulting firm to refiners. "The appetite for Canadian heavy crude on the Gulf Coast is still going to be there," he said. "At some point, XL will still be needed. It's just going to be less necessary." Companies that operate fuel-making plants in Texas and Louisiana still hope to see the pipeline constructed. "The Keystone XL pipeline is necessary infrastructure, and will be good for our economy," said Jamal Kheiry, a spokesman for Marathon Petroleum Corp. The biggest U.S. refiner, Valero Energy Corp., "has supported the pipeline when oil prices were low, high, low again, and everything in between," said spokesman Bill Day. "That ample supply of inexpensive crude oil would offset declining supplies from fields in Mexico and South America. That's the case no matter what the benchmark price of crude is today." TransCanada Corp., the Canadian company that wants to build the line, said it has long-term binding contracts in place with customers. "When we announced Keystone XL back in 2008, the price of oil was between $30 and $40 a barrel. No one was suggesting the project was not economic then," spokesman Shawn Howard said in a written statement. Still, companies that pump oil in Canada are hurting now. While the U.S. oil price has plunged by 55% since June to $48.36 a barrel on Friday, much of Canada's crude oil only fetches a little more than $30 a barrel. One reason is that there aren't enough routes to market, leaving Canadian oil bottlenecked inside the country. If built, the Keystone XL pipeline could move up to 830,000 barrels a day of oil roughly 2,000 miles from Edmonton, Alberta, to Nederland, Texas. The southern leg of the originally proposed Keystone XL project has already been built. That pipeline started transporting oil from Oklahoma to Texas a year ago. Other pipelines are proceeding, said John Stoody, a spokesman for the Association of Oil Pipe Lines. Enbridge Inc.'s Alberta Clipper that goes to Wisconsin is set to expand, and still more crude travels from Canada into the U.S. on oil trains. That could mean despite Keystone's six-year delay, the energy industry can afford to be patient and fight on. "In the time that the White House has been considering Keystone XL, we've actually added eight Keystone pipelines across America just in terms of mileage," Mr. Stoody said of all the new pipelines being put into the ground. New and expanded pipelines now allow the U.S. to import more than 3 million barrels of oil from Canada every day, according to the latest data from the federal government. Write to Alison Sider at Credit: By Alison Sider
Subject: Pipelines; Crude oil; Petroleum industry; Crude oil prices
Location: United States--US Canada Texas
Company / organization: Name: TransCanada Corp; NAICS: 486210; Name: Marathon Petroleum Corp; NAICS: 324110; Name: Enbridge Inc; NAICS: 486110; Name: Valero Energy Corp; NAICS: 486210, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 10, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643646061
Document URL: https://login.ezproxy.uta.edu/login? url=https://search-proquest-com.ezproxy.uta.edu/docview/1643646061?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shell's Canadian Oil-Sands Operations to Cut Jobs Amid Crude Oil Price Swoon; Company to Trim About 5% to 10% of Its 3,000 Workers
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Jan 2015: n/a.
Abstract:
CALGARY, Alberta--Royal Dutch Shell PLC said Friday it plans to cut jobs at its Canadian oil-sands operations, becoming the first major energy company to shed workers in Canada's oil patch amid.
Full text: CALGARY, Alberta--Royal Dutch Shell PLC said Friday it plans to cut jobs at its Canadian oil-sands operations, becoming the first major energy company to shed workers in Canada's oil patch amid. Shell, which produces 250,000 barrels of oil a day from its oil-sands mines, will trim about 5% to 10% of its 3,000 workers, some of whom will be reassigned to other jobs, said company spokesman Cameron Yost. "We're continuing to review our business to make sure that we remain competitive," Mr. Yost said. "When prices are low the importance of that is underlined," he said. The president of Shell Canada, Lorraine Mitchelmore, said in August that when Brent crude trades above $70 per barrel. Prices for Brent, the global oil benchmark, have spiraled lower in recent weeks, falling below $50 a barrel this week. Shell owns a 60% stake in its core oil sands operations with Chevron Corp., and Marathon Oil Corp. splitting the remainder. These consist of two surface mines, known as Jackpine and Muskeg River, in Alberta. Last February, Shell pushed back the development timeline for an oil-sands mine at a site called Pierre River, but has been pursuing other projects such as an expansion of its Jackpine mine and horizontally drilled wells elsewhere in northern Alberta at Carmon Creek and Peace River. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Oil sands; Petroleum industry; Mines; Energy economics
Location: Canada
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1643670029
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Fitch Cuts Russia Rating As Oil Price, Ruble Fall
Author: Albanese, Chiara; Pollock, Lauren
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Jan 2015: A.10.
Abstract:
Fitch, which lowered its ratings by one notch to triple-B-minus, also said the Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks' access to external capital markets.
Full text: Fitch Ratings cut its credit ratings on Russia to the brink of junk territory, saying the country's economic outlook has deteriorated significantly over the past six months amid sharp declines in oil prices and the ruble. The downgrade brings Fitch's ratings on Russia in line with those from Standard & Poor's Ratings Services. Fitch, which lowered its ratings by one notch to triple-B-minus, also said the Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks' access to external capital markets. The ratings outlook is negative as the ratings firm said it expects the Russian economy to contract by 4% this year, compared with its previous forecast of minus 1.5%, based on the slight growth seen in 2014. Fitch said continued exchange-rate volatility, sustained low oil prices and a faster-than-expected depletion of international reserves, among other things, could lead to further ratings cuts. The ratings assume oil prices will average $70 a barrel for 2015, well below the $100 a barrel assumed in July. Crude-oil prices have dropped by about 50% from their summer highs and has been trading about $50 a barrel in recent sessions. The ruble has declined sharply, in conjunction with oil prices. Analysts and investors said the downgrade was mostly priced in the market and is unlikely to stem a significant selloff in Russian assets, which remain classified as investment grade. But a similar downgrade by another agency, which would lead to the reclassification of Russia as junk, would have a far bolder impact, analysts said. This could be not far off. Late last month, S&P said it was reviewing Russia's credit rating, with at least a 50% chance that it would lower the rating within the next 90 days. Moody's Investors Service downgraded Russia's debt to Baa-2 -- two notches above junk -- in October, placing it under "negative outlook" status. "The country was put under negative watch [by S&P] two weeks ago, hinting a likely downgrade in the next few weeks. A downgrade from Moody's may come pretty much at the same time: statistically, nearly 60% of the rating actions are taken within the three to nine months after being placed under negative outlook status," said Regis Chatellier, a credit analyst at Societe Generale. The bank is advising clients to remain underweight Russia. A rush of cuts below investment grade would see Russia taken out of most investment-grade indexes, leading to a significant portfolio rebalancing. In separate moves Friday, Fitch affirmed its ratings on the Netherlands, Serbia, San Marino and Ivory Coast. Its ratings on the Netherlands are at triple-A, while San Marino has investment-grade-ratings and Serbia and Ivory Coast are in junk territory. Credit: By Chiara Albanese and Lauren Pollock
Subject: Bond ratings; Credit ratings; Economic forecasts
Location: Russia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Standard & Poors Corp; NAICS: 511120, 523999, 541519, 561450; Name: Fitch Investors Service Inc; NAICS: 523110
Classification: 9176: Eastern Europe; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2015
Publication date: Jan 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644002787
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Slide 7th Week in Row
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Jan 2015: B.5.
Abstract:
Hedge funds, pension funds and other investors added nearly the same number of bullish and bearish bets on Nymex oil prices in the week, according to the U.S. Commodity Futures Trading Commission.
Full text: Oil prices tumbled to their seventh consecutive weekly loss on Friday as concerns about a crude glut intensified. Crude-oil futures have plunged more than 50% since June amid rising world output coupled with lackluster demand growth, and the latest losing streak is the biggest since the 2008 financial crisis. Brent crude, the global benchmark, fell 1.7% to a new more-than five-year low of $50.11 a barrel on Friday. Prices fell 11% in the week, the biggest weekly drop since late November, when the Organization of the Petroleum Exporting Countries opted to maintain its production quotas. Brent fell below $50 a barrel during intraday trading on Friday. Traders and investors said there wasn't a specific driver behind Friday's selloff. Market experts say oil output needs to be sharply curtailed for prices to stabilize. "We still have plenty of oil around the world," said Carl Larry, director of oil and natural gas at consulting firm Frost & Sullivan. Stored supplies of crude oil and petroleum products in the U.S. hit the highest level on record last week, according to data released Wednesday by the Energy Information Administration. U.S. oil for February delivery slid 43 cents, or 0.9%, to settle at $48.36 a barrel on the New York Mercantile Exchange. Prices fell 8.2% for the week. In the past seven weeks, Nymex crude has declined by 37%. The last time oil prices fell this much over a comparable time period was in late 2008. But prices pared losses later in the trading session after rig data from oil-service company Baker Hughes Inc. showed that the number of oil rigs operating in the U.S. fell by 61 in the week, the largest weekly drop since 1991. The oil-rig count has fallen for five straight weeks, an indication that U.S. producers may be pulling back on new production in response to low prices. However, the total number of oil rigs is still higher than a year ago. Drilling rigs are often used to find new oil deposits. It could take many months for a decline in drilling activity to lead to a decline in production, analysts say. U.S. production has surged in recent years as companies turned to hydraulic-fracturing and horizontal-drilling techniques to access supplies trapped in shale-oil fields. "You're seeing rigs getting shut down . . . but production's going to take some time to come off," said Tariq Zahir, managing member of Tyche Capital Advisors. Money managers were split in their views on oil prices in the week ended Tuesday. Hedge funds, pension funds and other investors added nearly the same number of bullish and bearish bets on Nymex oil prices in the week, according to the U.S. Commodity Futures Trading Commission. Their aggregate bet on rising prices rose very slightly in the week. Now that Brent has fallen below $50 a barrel intraday, "the big numbers people are probably watching are the 2009 lows," said Gene McGillian, senior analyst at brokerage Tradition Energy. In 2009, in the throes of a global recession, the U.S. contract fell below $34 a barrel, while Brent settled below $40 a barrel. The steep slide in oil prices that kicked off 2015 has prompted some banks to cut their price forecasts again, following a string of downward revisions last year. BNP Paribas SA slashed its oil price forecasts on Thursday. The bank expects Brent to average $60 a barrel this year, down from its November assumption of $77 a barrel. BNP also cut its projection for the U.S. benchmark by $15 a barrel to $55 a barrel. Commerzbank lowered its first-quarter Brent forecast Friday to $45 a barrel from $65 a barrel and cut its year-end Brent price to $75 from $80 a barrel. "While there has been some stabilization in recent days, it would take a very brave man to pick a bottom right now," said Tamas Varga, oil analyst at brokerage PVM. --- Georgi Kantchev contributed to this article. Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 10, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644004560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644004560?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Oil Industry Says Project Still Makes Economic Sense
Author: Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Jan 2015: A.4.
Abstract:
[...]hundreds of thousands more barrels of Canadian oil are starting to flow south daily to U.S. refineries, even without the Keystone project, making the need for the pipeline less urgent, said John Auers, executive vice president of Turner, Mason & Co., a consulting firm to refiners.
Full text: Despite the steep drop in oil prices, the proposed Keystone XL Pipeline from Canada to the Gulf Coast still makes economic sense for Canadian producers looking for new markets and for U.S. refiners looking for cheap oil, experts say. However, hundreds of thousands more barrels of Canadian oil are starting to flow south daily to U.S. refineries, even without the Keystone project, making the need for the pipeline less urgent, said John Auers, executive vice president of Turner, Mason & Co., a consulting firm to refiners. "The appetite for Canadian heavy crude on the Gulf Coast is still going to be there," he said. "At some point, XL will still be needed. It's just going to be less necessary." Companies that operate fuel-making plants in Texas and Louisiana still hope to see the pipeline constructed. "The Keystone XL pipeline is necessary infrastructure, and will be good for our economy," said Jamal Kheiry, a spokesman for Marathon Petroleum Corp. The biggest U.S. refiner, Valero Energy Corp., "has supported the pipeline when oil prices were low, high, low again, and everything in between," said spokesman Bill Day. "That ample supply of inexpensive crude oil would offset declining supplies from fields in Mexico and South America. That's the case no matter what the benchmark price of crude is today." TransCanada Corp., the Canadian company that wants to build the line, said it has long-term binding contracts in place with customers. "When we announced Keystone XL back in 2008, the price of oil was between $30 and $40 a barrel. No one was suggesting the project was not economic then," spokesman Shawn Howard said. Still, companies that pump oil in Canada are hurting now. While the U.S. oil price has plunged by 55% since June to $48.36 a barrel on Friday, much of Canada's crude oil only fetches a little more than $30 a barrel. One reason is that there aren't enough routes to market, leaving Canadian oil bottlenecked inside the country. If built, the Keystone XL pipeline could move up to 830,000 barrels a day of oil roughly 2,000 miles from Edmonton, Alberta, to Nederland, Texas. Other pipelines are proceeding, said John Stoody, a spokesman for the Association of Oil Pipe Lines. That could mean despite Keystone's six-year delay, the energy industry can afford to be patient and fight on. New and expanded pipelines now allow the U.S. to import more than 3 million barrels of oil from Canada every day, according to the latest data from the federal government. (See related article: "Obama Faces New Heat on Keystone --- Nebraska Court Tosses Pipeline Challenge and House Backs It 266-153, but Plan Remains Under Review" -- WSJ Jan. 10, 2015) Credit: By Alison Sider
Subject: Crude oil; Petroleum industry; Crude oil prices; Pipelines; Petroleum production
Location: United States--US Canada
Company / organization: Name: Marathon Petroleum Corp; NAICS: 324110; Name: Valero Energy Corp; NAICS: 486210, 324110, 21 1111; Name: TransCanada Keystone Pipeline GP Ltd; NAICS: 486110
Classification: 9180: International; 1520: Energy policy; 3100: Capital & debt management; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.4
Publication year: 2015
Publication date: Jan 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644004636
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644004636?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Bus, Oil Truck Crash in Southern Pakistan, Killing 62
Author: Syed Shoaib Hasan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Jan 2015: n/a.
Abstract:
KARACHI, Pakistan--A bus collided with a tanker truck carrying oil on a road in southern Pakistan early Sunday, starting a fire that claimed the lives at least 62 passengers, police and hospital officials said.
Full text: KARACHI, Pakistan--A bus collided with a tanker truck carrying oil on a road in southern Pakistan early Sunday, starting a fire that claimed the lives at least 62 passengers, police and hospital officials said. Police officials said the bus driver and a conductor escaped after jumping out of the vehicle as it was about to crash. The bus driver then fled the scene, said police, who are trying to locate him. The accident took place just outside Karachi, the country's financial capital and largest city, in Sindh province. Officials said the bus was traveling to Shikarpur, a district in Sindh province about 300 miles north of Karachi. "The accident took place on a single-track road connecting to the main highway," said Rao Anwar, a senior police official. "It appears to have happened due to a combination of rash driving and poor road conditions." Mr. Anwar said the fire was set off by a gas cylinder in the bus, not by fuel from the truck. Rescue workers at the scene said the intense heat melted some of the metal frame of the bus. They were forced to cut the vehicle open to retrieve some of the bodies. Officials at Karachi's Jinnah Postgraduate Medical Center earlier said they had received the bodies of 59 people, including eight women and two children. The victims suffered severe burns, they said. Police said eight passengers escaped unharmed, while three were slightly injured. The crash was the second such major accident in Sindh in recent months. In November, 56 people were killed in a similar collision. Officials say poor infrastructure and the illicit distribution of licenses to unqualified drivers are the main contributors to Pakistan's traffic fatality rate. Over the past decade, an average of 5,000 Pakistanis have been killed in road accidents every year, according to the Pakistan Bureau of Statistics. Credit: By Syed Shoaib Hasan
Subject: Traffic accidents & safety; Fatalities; Bus drivers
Location: Pakistan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 11, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644343030
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644343030?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil to Put Chill on U.S. Earnings Season
Author: Strumpf, Dan; Vaishampayan, Saumya; Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Jan 2015: n/a.
Abstract:
Some prominent hedge funds are cutting back their exposure to stocks and reducing their use of borrowed money to amplify their bets, according to fund managers and a confidential memo Morgan Stanley sent to clients last week that was viewed by The Wall Street Journal.
Full text: As fourth-quarter earnings season gets under way, investors are bracing for the softest U.S. profit growth in years, pinched by collapsing oil prices and a strong dollar. That double whammy, coupled with the highest valuations for stocks since the financial crisis, will test the market's ability to prolong its extended bull run and will likely make for continued bumpy trading in the weeks ahead. Over the past few months, the Dow Jones Industrial Average and S&P 500 have carved out new record highs, while suffering frequent setbacks. Both indexes hit fresh peaks in the final sessions of last year but have since experienced two straight weeks of declines. Some prominent hedge funds are cutting back their exposure to stocks and reducing their use of borrowed money to amplify their bets, according to fund managers and a confidential memo Morgan Stanley sent to clients last week that was viewed by The Wall Street Journal. The highly-paid traders who were surprised by a stock market rally in 2014 are betting that 2015 will bring the tumult they expected last year. Still, many investors and stock-market strategists say an improving U.S. economy, as evidenced by , coupled with continued low interest rates means there will be enough momentum to keep the six-year-old bull market running. That optimism will be put to the test by the earnings season that kicks off Monday when Alcoa Inc. reports results after the close of stock trading. Overall, companies in the S&P 500 are expected by Wall Street analysts to report that profits rose 1.1% from a year earlier in the fourth quarter, according to FactSet. That would mark the slowest pace of growth since the third quarter of 2012, when earnings declined 1%. Revenue at S&P 500 companies is forecast by analysts to rise 1.1% from a year earlier in the fourth quarter, its slowest growth in a year. Excluding the energy sector, which has been hit by , earnings at companies in the S&P 500 are projected to rise 3.6%, below the 5.2% average growth rate for earnings of all S&P 500 companies over the past eight quarters, according to FactSet. To a large degree, the weakness in fourth-quarter earnings is well-anticipated. That is because much of the blame goes to energy companies, whose profits are expected to fall 19.1% for the quarter thanks to the plunge in oil prices. At the same time, a sharp rise in the value of the dollar is expected to reduce the value of revenue earned abroad by several percentage points, as well as cut into the businesses of U.S. exporters whose products have become less competitively priced. Slowing economic growth overseas is also pressuring profits for U.S. multinationals. "There are a fair amount of headwinds that are beginning to really start to blow hard in the face of corporate America," said Burt White, chief investment officer for broker-dealer LPL Financial. But Mr. White added that the expected earnings gains are "pretty good given the situation." Mr. White is looking for good news from transportation stocks thanks to falling fuel costs. He is recommending the $2.2 billion iShares Transportation Average exchange-traded fund. With profit growth slowing and stocks near record highs, share prices have been getting more expensive relative to earnings. Stocks in the S&P 500 are trading at 16 times the coming 12 months' forecast earnings, according to FactSet. That is the highest since June 2007 and well north of the 10-year average of 14.1. "Valuations are high," said Jim Paulsen, chief investment strategist at Wells Capital Management, which oversees $345 billion. "The market's in a more vulnerable state than it's been at any point in this recovery." Still, Mr. Paulsen said the bull market that started in 2009 "will likely last several more years and probably rise considerably more before it ultimately peaks." As is generally the case, stock analysts have slashed profit forecasts in the weeks leading to earnings season. At the start of the fourth quarter, analysts had been expecting an overall profit growth rate of 8.4%. That lowers the bar on profits, traders and investors said, making it easier for companies to beat forecasts and give their stocks a boost. While the energy sector is seen as a drag on fourth-quarter profits, many investors say lower oil prices are a positive for the future. In the longer term, investors say, costs should come down for energy-consuming companies ranging from manufacturers to transportation companies to chemical makers. And in the short term, lower prices at the gas pump are expected to boost earnings among retailers and other companies whose sales get a lift when consumers have more money to spend. "What you're going to see is good holiday sales data from the retailers, and with gas prices [falling] even further since then, that benefit is likely to carry into" 2015, said Michael Scanlon, senior investment analyst at John Hancock Asset Management. Mr. Scanlon said one fund he helps advise, the $1.4 billion John Hancock Balanced fund, has in recent months been reducing holdings of energy stocks and buying consumer discretionary shares. Sam Peters, who manages the $2.8 billion ClearBridge Value Trust, thinks that a bad quarter for energy stocks could provide buying opportunities. "They're going to have an awful earnings season, but the carnage in the stocks is enough that, in certain cases, there's definitely long-term value," said Mr. Peters. Mr. Peters owns shares of integrated oil giant Chevron Corp. and exploration and production firm Apache Corp. The stronger dollar is likely to hurt profits of multinational companies. Thanks to big gains in the dollar against the yen and the euro, the Wall Street Journal Dollar Index--which tracks the U.S. currency's performance against 16 other currencies--was on average 9.4% higher in the fourth quarter of 2014 than in 2013. As a result of that currency move, a reduction in revenues for multinationals by "4% to 5% wouldn't be out of line," said Tom West, head of equity research at Columbia Management, which has $357 billion under management. One question mark will be financial companies, which are expected to a show a 1.7% decrease in earnings and have blindsided investors with massive legal charges. "The thought was that they would be done with the write-downs and all of that by now, but it's been a slow process working out," said Curtis Holden, senior investment officer at Tanglewood Wealth Management, which manages $850 million out of Houston. "That's been a big drag on the earnings." Wells Fargo & Co. and J.P. Morgan Chase & Co. are set to kick off U.S. bank earnings season Wednesday. Rob Copeland contributed to this article. Write to Dan Strumpf at , Saumya Vaishampayan at and Alexandra Scaggs at Credit: By Dan Strumpf, Saumya Vaishampayan and Alexandra Scaggs
Subject: Earnings; Stock exchanges; American dollar; Profits; Growth rate
Location: United States--US
Company / organization: Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: Alcoa Inc; NAICS: 212299, 331313
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644388192
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644388192?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Floods Buoy the Price of Palm Oil, Rubber
Author: Tan, Huileng
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Jan 2015: n/a.
Abstract: None available.
Full text: Floods across large swaths of Southeast Asia are threatening the world's supply of palm oil and rubber and sending prices surging. With many major plantations under water and feared damaged, the expected shortfall in palm oil has sent prices rallying 10% in the past three weeks to hit a six-month high. Natural-rubber prices are up as much as 5.7% in the same period. The floods are most pronounced in Malaysia, where they have killed more than a dozen people and displaced more than 200,000 others. Parts of Indonesia have been hit, too, because of a severe monsoon this year. The two countries are the world's top producers of palm oil, used in wide array of products including lipsticks and biscuits. And while the damage is causing devastation for many farmers, sustained price gains could help some because the crop is a key source of income. Brokers say investors are adding to bets that prices will rise further ahead of the Lunar New Year festivities next month, when demand for palm oil picks up for use as cooking oil in China, the world's second largest buyer after India. The global palm oil market is valued at about US$50 billion "Flood damage to palm-oil supplies in the current quarter is projected to be bad," said Chandran Sinnasamy, who heads the trading desk at LT International Futures in Kuala Lumpur. He expects prices to retreat when floodwaters recede in the next few weeks. Malaysian officials say output may have dropped 20% in December from a month earlier to 1.4 million tons, and forecast 20 millions tons of production for all of this year. That is lower than 21.25 million tons estimated by the U.S. Department of Agriculture in early December. Malaysia's weather authorities are forecasting persistent thunderstorms and rain through Tuesday. Prices of rubber are also jumping because of heavy rains and floods in the south of Thailand, the largest producer and exporter of the agricultural commodity, used primarily in tire manufacturing. More than two-thirds of the world's supply comes from Thailand, Indonesia and Malaysia and the entire market is valued around $25 billion a year. "Both commodities are in their low production season and now that there are floods, there are concerns about supply constraints," said Singapore-based Rabobank analyst Pawan Kumar. Luckchai Kittipol, chief executive of Thai Hua Rubber Public Co., a major Thai exporter of natural rubber with eight factories in the south of Thailand, said flooding has cut his supply from the region by half. The crunch may worsen amid already low stocks as many farmers have abandoned their trees after last year's price crash. Rubber prices fell 30% in 2014 because of a supply surplus, while the price of palm oil sank more than 20%. On Friday, benchmark crude palm-oil futures on the Bursa Malaysia Derivatives closed at 2,348 ringgit ($660) a metric ton, 2.8% higher than a week earlier and up 3.6% in the year to date. Benchmark natural rubber futures on the Tokyo Commodity Exchange settled at ¥206.5 ($1.74) a kilogram, 3.2% lower year-to-date after hitting a six-month high on Tuesday. In Thailand, where rubber is a politically charged commodity because of farmers' reliance on the crop, the government has in recent years tried to bolster prices through various measures such as subsidies and buying the commodity at above market rates, to no avail. Despite the recent increase, farmers in Thailand remain unhappy because prices are still down 60% from a record high in 2011, and they are threatening to demonstrate unless the government intervenes in the market. Some investors, on the other hand, say prices may have risen too far. Singapore-based Michael Coleman, who co-manages the Merchant Commodity Fund, said the current optimism is hype. While there will be a short-term supply disruption, the rains will help both palm and rubber yields later this year, he said. The US$260 million fund trades both palm oil and rubber but has no positions in either commodity at the moment. Analysts are wary of making bold calls. CIMB Research's analyst Ivy Ng said in a note that the expected drop in palm-oil supply is likely to lift prices higher in the near-term, although worries about slower global growth and abundant supply of substitute products such as soybean oil could slow gains. Rabobank's Mr. Kumar said that palm fruits are still available, although harvesting and transport has been impeded by the flooding, so the real damage can only be assessed after the waters recede. Palm oil's performance is also helped by the weak Malaysian ringgit, which will be integral to the performance of the oil this year, he said. Jason Ng contributed to this article. Credit: By Huileng Tan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644388217
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644388217?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
The Myth of the Carbon Investment 'Bubble'; Bad news for alarmists: Global integrated oil and gas companies since 2008 have traded at a 30% discount.
Author: Meyer, Nancy; Brinker, Lysle
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Jan 2015: n/a.
Abstract:
[...]since 2008 global integrated oil and gas companies (IOCs) have traded at an average 30% discount to their intrinsic value, based on well-accepted financial analysis using cash flows and asset sales.
Full text: Is there a new economic bubble--a "carbon bubble"--forming around oil, natural gas and coal investments? Proponents of the theory assert that the prices of fossil-fuel company stocks are substantially overvalued because their inventory of fossil-fuel resources cannot be brought to the surface and consumed if the world is to keep global emissions below certain carbon-dioxide thresholds. The argument, advanced by such groups as 350.org, Carbon Tracker Initiative and Go Fossil Free, assumes that more-stringent climate policies will render many fossil-fuel reserves "unburnable." In coming decades these reserves are at risk of being "stranded," leaving shareholders empty-handed. Buzzwords about "stranded" and unburnable assets are making some investors anxious. The carbon-bubble movement is also putting pressure on endowments, foundations and pension funds to divest fossil-fuel equity holdings. Yet is the carbon-based investment risk real or is it part of a cry for action on climate change? Look closely and financial-market realities deflate the carbon-bubble theory. For a bubble to exist, companies would need to be overvalued in the market. In fact, since 2008 global integrated oil and gas companies (IOCs) have traded at an average 30% discount to their intrinsic value, based on well-accepted financial analysis using cash flows and asset sales. Even following the recent sharp fall in oil prices, IOC companies continue to trade at a discount. This is not evidence of overconfidence or the "irrational exuberance" associated with well-known stock market, tech and real-estate bubbles. The carbon-bubble theory also misstates how fossil-fuel reserves are valued and how they contribute to the market capitalization of a company. The intrinsic value of an oil and gas company is based primarily on its proven reserves--those reserves currently producing plus those with a high probability of being developed in the near-to-medium term. The value of fossil-fuel reserves is based on the strict definition promulgated by the U.S. Securities and Exchange Commission. Our recent "Deflating the 'Carbon Bubble' " finds that these proven reserves on average account for only 24% of the resource base by volume, but account for 81% of the resource base value that drives a company's total valuation. Investors pay attention to and put their money on those proven reserves. Carbon-bubble theorists use a much broader and hazier definition of reserves. They also include "probable" and "possible" resources with uncertain potential for development and commercialization much further into the future. By using this broad and chronologically vague definition, they sound an alarm around a "carbon risk" associated with not-well-defined resources that are not near term and that barely play a role in hydrocarbon-company valuations. Carbon-bubble analysis also leaves out the timing of returns. Returns from investments in proven reserves are gained and delivered to shareholders within 10-15 years for most IOCs. Demand for oil and gas is unlikely to plummet in such a short time. Demand is expected to rise, driven by the growing energy needs of emerging-market countries. Even under the International Energy Agency's scenario aimed at reducing carbon emissions, energy demand is expected to grow by 12% over the next 15 years, with fossil fuels meeting more than two thirds of demand in 2030. What the value of reserves not yet developed or even discovered will be in 2050 is highly uncertain--but so is the worth that today's high-value tech stock shares will have in 2050. The current period of low prices is due to the rapid buildup of supply and a slowing world economy--not to carbon-related demand destruction stimulated by stringent caps on CO2 emissions or a rapid penetration of clean energy technologies. So a scenario that envisions a swift decarbonization of the economy that leaves most commercial hydrocarbon assets "stranded" seems highly unrealistic. A transition to a lower carbon economy will require increased investment in renewable energy and energy efficiency over a long period. The International Energy Agency forecasts that of the nearly $40 trillion in energy investments needed to supply the world to 2035, more than 50% will be needed for fossil-fuel investments. Divestment also runs counter to the Obama administration's climate-change policy, which aims to promote more natural gas in electricity generation. Shaping future energy and environmental policies and the energy system for decades ahead requires informed, fact-based discussion. That is also a requirement for responsible investing by endowments, pension funds and other long-term investors. Anticipating bubbles has become an important concern, but it is just as important not to base decisions on bubbles that don't exist. Ms. Meyer is associate director of the energy climate strategy dialogue, and Mr. Brinker is director of oil company equity research at IHS, a research and consulting firm. Credit: By Nancy Meyer And Lysle Brinker
Subject: Oil reserves; Emissions; Carbon; Investments; Environmental policy; Natural gas utilities
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 11, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644389659
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644389659?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Fall to Fresh Lows; Global Benchmark Brent Is 17% Lower for the Year
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract: None available.
Full text: The global oil benchmark settled below $50 a barrel for the first time in nearly six years Monday after Goldman Sachs Group Inc. slashed its forecasts, saying lower prices are needed to reduce global supplies. The price rout weighed on other markets. Energy stocks fell, and copper slid to a five-year low. After dropping in half in 2014, Brent oil prices are already down 17% for the year, as robust global supply growth continues to outpace demand. The Organization of the Petroleum Exporting Countries chose not to lower its production quota in November, putting more pressure on non-OPEC producers such as the U.S. and Canada to cut back on output. Goldman Sachs and Société Générale sharply lowered their oil-price forecasts in reports released Sunday and Friday, respectively. Goldman called for the U.S. oil benchmark to average $40.50 a barrel and Brent to average $42 a barrel in the second quarter. "Forty dollars was an outlier number just a couple months ago," said John Kilduff, founding partner at Again Capital. Goldman's "call for $40 oil could engender a lot of folks to throw in the towel." The revisions came on the heels of last week's lower forecasts from Citigroup Inc., BNP Paribas SA and Commerzbank AG. Traders said several U.S. refinery outages also pressured prices Monday on expectations that demand for crude oil could temporarily drop. Brent dropped $2.68, or 5.3%, to $47.43 a barrel on ICE Futures Europe, the lowest settlement since March 2009. U.S. oil for February delivery settled down $2.29, or 4.7%, at $46.07 a barrel on the New York Mercantile Exchange, the lowest level since April 2009. The U.S. benchmark has fallen 14% so far this year. Whereas many analysts said last autumn that U.S. shale-oil producers wouldn't be able to produce profitably if prices fell below $80 a barrel, market watchers now say much lower prices are needed to reduce U.S. supply growth. Goldman sees Brent prices averaging $50.40 a barrel this year, down from its previous call of $83.75 a barrel. For the U.S. benchmark, Goldman expects prices to average $47.15 a barrel in 2015, down from $73.75 in its last forecast. Goldman is considered a commodities-focused investment bank, and its forecasts are closely watched. Société Générale lowered its 2015 Brent price forecast to $55 a barrel, from $70 a barrel, and its U.S. forecast to $51 a barrel, from $65 a barrel. "Markets are still pricing in a very ugly first half of this year," Michael Wittner, Société Générale's head of oil research, told The Wall Street Journal. He said he expects global oil storage to build by 1.6 million barrels a day in the first quarter and 1.7 million barrels a day in the second quarter. Drivers are enjoying the benefit of lower oil prices, with U.S. gas prices averaging $2.13 a gallon Monday, down $1.18 a gallon from a year before, according to AAA. Later this week, oil markets will be focused on monthly reports from the U.S. Energy Information Administration, OPEC and the International Energy Agency. Any cuts to global oil demand forecasts for this year could push oil prices down further. Traders are also watching China's oil import data, which is expected Tuesday, and the expiration of the February Nymex crude-oil options contract on Wednesday, said Bill Baruch, senior market strategist at brokerage iiTrader in Chicago. Gasoline futures for February delivery fell 4.87 cents, or 3.7%, to $1.2745 a gallon, the lowest settlement since March 2009. Diesel futures fell 4.89 cents, or 2.9%, to $1.6541 a gallon, the lowest since July 2009. Write to Nicole Friedman at Corrections & Amplifications An earlier version of this article contained a graphic that had incorrect data about Deutsche Bank's oil-price forecast. Credit: By Nicole Friedman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644404174
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644404174?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil, Rising Dollar Put Investors on Alert
Author: Strumpf, Dan; Vaishampayan, Saumya; Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Jan 2015: A.1.
Abstract:
[...]many investors and stock-market strategists say an improving U.S. economy, as evidenced by Friday's stronger-than-expected jobs report for December, coupled with continued low interest rates means there will be enough momentum to keep the six-year-old bull market running.
Full text: As fourth-quarter earnings season gets under way, investors are bracing for the softest U.S. profit growth in years, pinched by collapsing oil prices and a strong dollar. That double whammy, coupled with the highest valuations for stocks since the financial crisis, will test the market's ability to prolong its extended bull run and will likely make for continued bumpy trading in the weeks ahead. Over the past few months, the Dow Jones Industrial Average and S&P 500 have carved out new record highs, while suffering frequent setbacks. Both indexes hit fresh peaks in the final sessions of last year but have since experienced two straight weeks of declines. Some prominent hedge funds are cutting back their exposure to stocks and reducing their use of borrowed money to amplify their bets, according to fund managers and a confidential memo Morgan Stanley sent to clients last week that was viewed by The Wall Street Journal. The highly-paid traders who were surprised by a stock market rally in 2014 are betting that 2015 will bring the tumult they expected last year. Still, many investors and stock-market strategists say an improving U.S. economy, as evidenced by Friday's stronger-than-expected jobs report for December, coupled with continued low interest rates means there will be enough momentum to keep the six-year-old bull market running. That optimism will be put to the test by the earnings season that kicks off Monday when Alcoa Inc. reports results after the close of stock trading. Overall, companies in the S&P 500 are expected by Wall Street analysts to report that profits rose 1.1% from a year earlier in the fourth quarter, according to FactSet. That would mark the slowest pace of growth since the third quarter of 2012, when earnings declined 1%. Revenue at S&P 500 companies is forecast by analysts to rise 1.1% from a year earlier in the fourth quarter, its slowest growth in a year. Excluding the energy sector, which has been hit by the tumble in the price of oil, earnings at companies in the S&P 500 are projected to rise 3.6%, below the 5.2% average growth rate for earnings of all S&P 500 companies over the past eight quarters, according to FactSet. To a large degree, the weakness in fourth-quarter earnings is well-anticipated. That is because much of the blame goes to energy companies, whose profits are expected to fall 19.1% for the quarter thanks to the plunge in oil prices. At the same time, a sharp rise in the value of the dollar is expected to reduce the value of revenue earned abroad by several percentage points, as well as cut into the businesses of U.S. exporters whose products have become less competitively priced. Slowing economic growth overseas is also pressuring profits for U.S. multinationals. "There are a fair amount of headwinds that are beginning to really start to blow hard in the face of corporate America," said Burt White, chief investment officer for broker-dealer LPL Financial. But Mr. White added that the expected earnings gains are "pretty good given the situation." Mr. White is looking for good news from transportation stocks thanks to falling fuel costs. He is recommending the $2.2 billion iShares Transportation Average exchange-traded fund. With profit growth slowing and stocks near record highs, share prices have been getting more expensive relative to earnings. Stocks in the S&P 500 are trading at 16 times the coming 12 months' forecast earnings, according to FactSet. That is the highest since June 2007 and well north of the 10-year average of 14.1. "Valuations are high," said Jim Paulsen, chief investment strategist at Wells Capital Management, which oversees $345 billion. "The market's in a more vulnerable state than it's been at any point in this recovery." Still, Mr. Paulsen said the bull market that started in 2009 "will likely last several more years and probably rise considerably more before it ultimately peaks." As is generally the case, stock analysts have slashed profit forecasts in the weeks leading to earnings season. At the start of the fourth quarter, analysts had been expecting an overall profit growth rate of 8.4%. That lowers the bar on profits, traders and investors said, making it easier for companies to beat forecasts and give their stocks a boost. While the energy sector is seen as a drag on fourth-quarter profits, many investors say lower oil prices are a positive for the future. In the longer term, investors say, costs should come down for energy-consuming companies ranging from manufacturers to transportation companies to chemical makers. And in the short term, lower prices at the gas pump are expected to boost earnings among retailers and other companies whose sales get a lift when consumers have more money to spend. "What you're going to see is good holiday sales data from the retailers, and with gas prices [falling] even further since then, that benefit is likely to carry into" 2015, said Michael Scanlon, senior investment analyst at John Hancock Asset Management. Mr. Scanlon said one fund he helps advise, the $1.4 billion John Hancock Balanced fund, has in recent months been reducing holdings of energy stocks and buying consumer discretionary shares. Sam Peters, who manages the $2.8 billion ClearBridge Value Trust, thinks that a bad quarter for energy stocks could provide buying opportunities. "They're going to have an awful earnings season, but the carnage in the stocks is enough that, in certain cases, there's definitely long-term value," said Mr. Peters. Mr. Peters owns shares of integrated oil giant Chevron Corp. and exploration and production firm Apache Corp. The stronger dollar is likely to hurt profits of multinational companies. Thanks to big gains in the dollar against the yen and the euro, the Wall Street Journal Dollar Index -- which tracks the U.S. currency's performance against 16 other currencies -- was on average 9.4% higher in the fourth quarter of 2014 than in 2013. --- Rob Copeland contributed to this article. Credit: By Dan Strumpf, Saumya Vaishampayan and Alexandra Scaggs
Subject: Earnings; Profits; Stock exchanges; Prices; American dollar; Growth rate; Financial performance; Dow Jones averages; Economic conditions -- United States--US
Location: United States--US
Classification: 9190: United States; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 12, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics --Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644408757
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644408757?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Natural Slashes Spending, Production Targets; Oil and Gas Producer Cites Rapidly Falling Crude Oil Prices
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
[...]it now estimates production this year will be no more than 592,000 barrels a day of oil and natural gas liquids, down from an earlier forecast of up to 611,000 barrels a day.
Full text: CALGARY--Canadian Natural Resources Ltd., one of Canada's largest oil and gas producers, cut its full-year capital spending plans and production forecast on Monday, citing the rapid drop in crude oil prices since setting its initial 2015 budget in early November. The Calgary-based company said it would spend 6.2 billion Canadian dollars ($5.25 billion) on growth projects, down from an earlier target of C$8.6 billion, and increase production of crude oil and natural gas liquids about 7% over 2014 levels, down from an earlier projection of around 11% growth. The moves come after the Canadian unit of Royal Dutch Shell PLC on Friday of its oil sands mining workforce due to lower crude prices. The slump in global oil prices is expected to trim profit and slow growth at many energy producers, especially those with higher cost operations. Canadian Natural said the slimmer budget will impact its drilling activity in North America and overseas, as well as a defer about C$470 million that had been earmarked for a new oil sands project "until such time as commodity prices stabilize at levels that justify such capital expenditures." The company also left the door open for more spending cuts as the year progresses, saying that it would "further curtail capital spending if required." The size of the reduction is larger than the C$2 billion Canadian Natural had said it would consider trimming when it on Nov. 6. Oil prices have continued to fall since then, with global benchmark Brent crude hitting $50.11 a barrel on Friday for the first time in more than five years. As a result, it now estimates production this year will be no more than 592,000 barrels a day of oil and natural gas liquids, down from an earlier forecast of up to 611,000 barrels a day. But the revised target would still be higher than its latest 2014 forecast for output of between 531,000 and 557,000 barrels a day. The reduced budget will delay construction of an oil sands project in the Western Canadian province of Alberta using horizontally drilled wells to extract heavy oil known as Kirby North Phase 1 that had been expected to start up as soon as 2016. But Canadian Natural said its plans to expand production at its core Horizon oil sands mine in Alberta by 125,000 barrels a day over the next two years "remain on track." Once complete, mine operating costs will be between C$25 to C$27 a barrel, it said, which is below current spot market prices for Canadian crude. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Budgets; Crude oil prices; Crude oil; Petroleum industry
Location: Canada
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644413500
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644413500?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Stocks Rise Despite Renewed Slump in Oil Price; Lower Oil Price May Support Share Markets in the Longer Term
Author: Stubbington, Tommy; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract: None available.
Full text: European stocks rose in a volatile session Monday, as investors weighed the implications of a renewed slump in oil prices. The Stoxx Europe 600 closed 0.6% higher, helped by gains in health-care stocks amid a flurry of deals in the sector as Shire and Roche both announced acquisitions. Early in the session the benchmark had risen as much as 1%, but gave up all its gains as U.S. markets opened, with traders focusing on the latest signs that huge energy price declines in recent months have further to run. The S&P 500 was 0.6% lower as European markets closed. In Europe, oil and gas firms on the Stoxx 600 finished 1.3% down, as oil prices dived more than 5%. But elsewhere, most European sectors remained higher, and broader indexes bounced back. While the sharp fall in oil prices has hurt markets in the short term, many investors see it as a longer-term positive for stocks. "We see lower oil prices supporting our view that the global economy will continue its gradual improvement over the course of the coming year," said Alan Higgins, U.K. chief investment officer at private bank Coutts. Germany's DAX and France's CAC 40 both climbed more than 1%, but the U.K.'s oil and commodity-heavy FTSE 100 ended flat. In Greece, stocks rebounded sharply from their recent slump with Athens' main index rising 3.8%. Greek government bonds, which have also been under pressure ahead of Greece's election later this month , likewise notched up hefty gains. It was a similarly choppy session in currency markets, with the U.S. dollar initially resuming its recent rally against a number of currencies, before giving up much of its gains. The dollar added 0.2% against the British pound as the latter continued to be pressured by weak economic data , that some say may jeopardize the timing of a rise in interest rates in the U.K. "Nobody has got a good word to say about [sterling]," said Société Générale global macro strategist Kit Juckes. "And suddenly the conversation is all leaning toward rates not rising this year after all." U.K annual inflation data for December, scheduled for release Tuesday, are expected to show a rate of 0.6%, which would represent the first time since June 2002 that price growth has slipped more than a percentage point below the Bank of England's 2% target. Last week, a survey showed that business activity in the U.K.'s dominant services sector sputtered in December, adding to signs the economy slowed at the end of 2014. Write to Tommy Stubbington at tommy.stubbington@wsj.com and Josie Cox at josie.cox@wsj.com Credit: By Tommy Stubbington and Josie Cox
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644432595
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644432595?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Drop Along With Oil Prices; Major Banks Due to Report Earnings This Week
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
The latest decline was fueled by a report from Goldman Sachs Group Inc., in which analysts cut their oil-price forecast to $40.50 a barrel for the second quarter, saying prices need to stay lower for longer to bring down supply and balance the market.
Full text: U.S. stocks retreated for a second straight session, dragged lower by a renewed drop in oil prices, as investors turned to the coming fourth-quarter earnings season. The Dow Jones Industrial Average declined 96.53 points, or 0.5%, to 17640.84, while the S&P 500 index lost 16.55 points, or 0.8%, to 2028.26. The Nasdaq Composite Index shed 39.36 points, or 0.8%, to 4664.71. Stocks kicked off the session with a modest gain, but reversed course as oil prices plumbed fresh lows. Energy stocks led the charge lower, with shares of S&P 500 energy companies posting the sharpest decline among major indexes with a loss of 2.8%. The retreat marked the latest selloff for oil and gas companies, which have been hard-hit amid a monthslong selloff in oil prices. Among Dow components, Chevron Corp. posted the biggest loss, down 2.2%. Exxon Mobil Corp. fell 1.9%. "Everyone is trying to come to grips with the lower oil prices," said Rick Fier, director of execution services at Conifer Securities. "It's not so much that crude is down that's scary--it's the amount it goes down. If it could stabilize for a while, it would be a relief." U.S. oil futures tumbled 4.7% to $46.07 a barrel, their lowest finish since April 2009 . The latest decline was fueled by a report from Goldman Sachs Group Inc., in which analysts cut their oil-price forecast to $40.50 a barrel for the second quarter, saying prices need to stay lower for longer to bring down supply and balance the market. Also trading lower Monday were information-technology shares, down 1.3%. Telecommunications shares, typically seen as havens during times of broader market flux, posted gains. Declines in stocks over the last two weeks have sent the S&P 500 falling 1.5% so far in 2015. Investors widely expect a rockier period for markets in the year ahead on the heels of last year's 11% rally for the broad-market index. Though they have been cheered by the steady growth in the U.S. economy, uncertainty over the Federal Reserve's timeline for raising interest rates and weak growth elsewhere in the developed world has market watchers bracing for wider swings in stocks. Still, the S&P 500 remains just 3% below its most recent all-time high of 2090.57 reached on Dec. 29. Investors will get further clues on how the drop in oil prices is impacting corporate America with the start of the fourth-quarter earnings season. It unofficially began after the close Monday with an update from Alcoa Inc. Shares of the company rose 1.6% in after-hours trading after posting earnings and revenues ahead of Wall Street expectations. Overall, investors are girding for lackluster profit reports. Earnings for companies in the S&P 500are expected to rise 1.1% in the quarter, the weakest quarter for profit growth since the third quarter of 2012, according to FactSet. The sharp decline in oil prices has curbed profits in the once-burgeoning energy sector, while the strong dollar is crimping business for exporters and companies with large overseas operations. "We had some real dollar strength the second half of last year and it's not going to be a short-lived phenomenon," said Mike O'Rourke, chief market strategist at Jones Trading. "I think companies are going to be more realistic about the currency and the headwinds it's going to create, and I think that should create some doubt among investors' minds. But we're still a stone's throw away from all-time highs." One company to express concerns about the stronger dollar Monday was jeweler Tiffany Co., which cut its 2014 earnings guidance citing the firm dollar and a disappointing holiday sales season. Shares tumbled 14%. Retailers are due to report December sales on Wednesday. European stocks closed higher, with the Stoxx Europe 600 index gaining 0.6%. The euro reversed an early gain against the dollar, falling 0.2%. Next week investors will be closely watching a meeting of the European Central Bank amid expectations of further easing measures. The yield on the 10-year Treasury note sank to 1.909% from 1.975% on Friday. Yields fall as prices rise. Gold futures added 1.4% to $1232.70 an ounce. Elsewhere in the market, Roche Holding AG agreed to pay $1.03 billion for a stake of up to 56.3% in Foundation Medicine Inc. Shares of Foundation Medicine rose 95%. Shire PLC is buying NPS Pharmaceuticals Inc. for $5.2 billion. NPS Pharmaceuticalsmakes treatments for rare diseases . U.S.-listed shares of Shire fell 3.1%, while shares of NPS jumped 8.2%. Bristol-Myers Squibb Co. shares rose 3.1% after the company said a late-stage study of its skin-cancer drug Opdivo met its primary endpoint. Bristol-Myers Squibb said it would end the trial early. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Profits; Financial performance; Stock exchanges; Prices; American dollar; Natural gas utilities
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Conifer Securities; NAICS: 541211; Name: Alcoa Inc; NAICS: 212299, 331313; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Yo rk, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644476173
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644476173?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Government Bonds Strengthen on Worries Over Oil Slump; Demand Strong for $24 Billion Sale of Three-Year Notes
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract: None available.
Full text: The yield on the benchmark 10-year Treasury note fell to the lowest level in more than a year on Monday as investors piled into haven bonds due to falling oil prices and a strong $24 billion sale of three-year U.S. government notes. The U.S. government bond market extended a rally last week that was the biggest on a weekly basis in a month. Strong demand for haven bonds underscores investors' concerns over the uncertain global economic outlook and deflation scare. "There is a fear that the oil selloff is a sign of much weaker global economic growth," said Anthony Cronin, a Treasury bond trader at Société Générale SA. In late-afternoon trading, the yield on the benchmark 10-year Treasury note fell to 1.909%, compared with 1.975% on Friday. It marks the yield's lowest closing level since May 2013. The yield on the 30-year Treasury bond fell to 2.490%, close to the record closing low of 2.466% set on July 24, 2012. Bond prices rise as their yields fall. The 10-year yield last week fell below 2% for the first time since October. The yield has fallen from 2.173% at the end of 2014 and 3.03% at the end of 2013. The new three-year notes were sold at a yield of 0.926%, the lowest auctioned yield since August 2014. Indirect bidding, a proxy gauge of demand from foreign investors, soared to 45.8%, the highest level since August 2011. A $21 billion sale of 10-year notes is due Tuesday, followed by a $13 billion sale in 30-year bonds on Wednesday. Crude oil continued its monthlong selloff. The U.S. benchmark settled on Monday at $46.07 a barrel, the lowest level since April 2009. Oil prices are down more than 50% since June due to strong supply and faltering demand driven by slowing growth in China and the eurozone. Lower oil prices have hurt the prospects for economic growth in energy-exporting countries as indicated by the currency crisis in Russia last month. Investors are concerned that a prolonged decline in oil prices will spread economic woes and cause more market turmoil, which will make ultrasafe U.S. government bonds more attractive to buy. also have fanned worries over the risk of deflation--the persistent decline in prices of goods and services in a country. While deflation will inflate the value of bonds, a boon for bond investors, it will discourage consumer and business spending, a damaging cycle for economic growth. While few expect the U.S. to get hit by deflation, some market-based gauges of long-term inflation expectations fell earlier this month to the lowest since 2000. Wage inflation, meanwhile, has been anemic even as jobs growth in the U.S. has been running at a robust pace. Friday, bond prices rallied after the that average hourly earnings fell 0.2% in December, compared with a 0.2% gain forecast by economists. Earnings rose by 1.7% over the 12 months ended in December, the least since 2012. Investors and analysts say tame inflation bolsters the prospect of the Fed maintaining interest rates near zero for longer, encouraging investors to buy bonds. Many investors don't expect the Fed to start raising rates until the second half of 2015, and some caution that the Fed may hold off a rate increase until early 2016 if the global growth outlook worsens. "I think the Fed wants to err on the side of caution," said Chris Bury, head of U.S. rates trading in New York at Jefferies LLC. Even as the U.S. central bank prepares to raise interest rates this year, the European Central Bank is expected to add more monetary stimulus, probably via purchases of eurozone government bonds, in coming months. Investors say the prospect of more money-pumping from the ECB will send bond yields in the eurozone lower, and higher-yielding U.S. bonds remain an attractive bargain, offering a boost to Treasury bond prices. A rallying U.S. dollar, driven by the prospect of higher interest rates from the Fed, has enabled foreign investors to pick up extra returns over the past year for their investments in both U.S. stocks and bonds. Write to Min Zeng at Credit: By Min Zeng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644482319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644482319?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gold Hits 2½-Month High as Investors Seek Safety; Concerns Of Whether The Sharp Drop In Oil Prices Will Harm The Global Economy
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
Gold prices rose to their highest level in a month Monday, as investors sought shelter amid concerns of whether the sharp drop in oil prices would harm the global economy.
Full text: Gold prices rose to their highest level in more than two months on Monday, as investors sought shelter amid concerns of falling oil prices and political uncertainty in Europe. Gold for February delivery, the most actively traded contract, closed up $16.70, or 1.4%, at $1,232.80 a troy ounce, the highest since Oct. 22 on the Comex division of the New York Mercantile Exchange. Some investors are concerned the recent tumble in oil prices will hurt energy-exporting countries and damage the health of the global economy. were down 4.7% in late trade Monday at $46.07 a barrel, a 5½-year low. Data from the U.S. released Friday showed hourly wages declined last month and more Americans dropped out of the labor force, even though overall jobs increased at a brisk pace, adding to investor worries. The tepid wage growth may weigh on consumer prices and delay an expected rate increase by the Federal Reserve. Continued low rates would be a boon to gold, which struggles to compete with yield-bearing investments in times of tightening monetary policy. "Funds are taking a look at their asset allocation and realizing they are woefully underinvested in gold," said George Gero, a senior vice president at RBC Capital Markets Global Futures. Investors are also watching the political situation in Greece, where an antiausterity opposition party continues to hold a narrow lead in the polls two weeks ahead of national elections. There has been speculation that the country would exit the eurozone if the opposition party wins, although the leader of the party said Sunday that it would keep Greece in the currency union. Some investors buy gold in turbulent times, believing it will hold its value better than other assets. "The global markets are closely intertwined, and investors in the European theater are aggressively reallocating capital, with flows finding their way into U.S. fixed income and gold," said Peter Hug, director of trading at Kitco Metals, in a note to clients. "Unless the equity market in the U.S. moves higher, and the energy sector stabilizes, (precious) metals continue to show promise." Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Subject: Gold markets; Investments
Location: United States--US Greece
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644491042
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journa l
Bank of Canada: Lower Oil Prices Have Hurt Energy Firms' Outlook; Sliding Prices Have 'Significantly Dampened' Firms' Sales Outlook and Weigh on Investment Plans
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
Canadian firms exporting to the U.S. see benefits from improving U.S. demand, and some expect the weakening Canadian dollar to help them regain lost market share and boost competitiveness, the central bank said.
Full text: OTTAWA--Sliding oil prices have "significantly dampened" the sales outlook for Canadian energy firms and are weighing on their investment plans, the Bank of Canada said Monday. Overall inflation expectations among Canadian businesses have also declined, with most companies anticipating inflation in the 1%-to-2% range, the bottom half of the Bank of Canada's inflation-target range. The findings were from the central bank's latest quarterly survey of about 100 firms, conducted between Nov. 17 and Dec. 11 and released Monday. They bolster expectations that the Bank of Canada will delay raising interest rates and suggest it may cut its economic-growth forecasts. Global oil prices have fallen even further since the survey was carried out, and are currently at six-year lows as robust supply growth outpaces demand. The Bank of Canada said some 43% of companies surveyed expect sales to improve modestly over the next 12 months, compared with 35% who anticipated a slowing. The eight-percentage point difference between the two views was the lowest since the third quarter of 2012. "Business sentiment remains positive, but falling prices have significantly dampened the outlook for firms tied to the energy sector," the central bank said. Canadian firms exporting to the U.S. see benefits from improving U.S. demand, and some expect the weakening Canadian dollar to help them regain lost market share and boost competitiveness, the central bank said. The U.S. absorbs some 75% of Canadian exports, and a weaker currency makes Canadian goods cheaper in global markets. Overall, some 37% of firms expect to boost spending on machinery and equipment, while 29% anticipate lower investments, with the balance of opinion standing at 8%, the central bank said. The oil-and-gas sector accounts for about one-third of all private nonresidential capital spending in Canada, according to economists at Royal Bank of Canada. Some 68% of firms predict inflation will be in the 1%-to-2% range, the biggest share of firms holding such a view in a year. Only 24% of firms see inflation in the 2%-to-3% range, the central bank said. The Bank of Canada sets interest rates to achieve an inflation rate of around 2%. The central bank will update its quarterly economic projections in its next monetary policy report on Jan. 21, which will be released along with its first interest-rate decision of 2015. Write to Nirmala Menon at Credit: By Nirmala Menon
Subject: Central banks; Monetary policy; Interest rates; Capital expenditures
Location: United States--US
Company / organization: Name: Royal Bank of Canada; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644502979
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644502979?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Afren Shares Drop After Slashing Estimates for Iraqi Oil Field; Change in Estimates for Barda Rash Means the Oil Field Essentially a Bust for the Company
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
Afren said Monday it was downgrading the Kurdistan resources following reprocessing of seismic data and after its drilling campaign found more water in the wells than expected and a high level of associated hydrogen sulfide gas, which would require "significant capital" to develop.
Full text: LONDON--Afren PLC's share price plunged nearly a third on Monday after the company slashed the estimates for its oil field in Iraqi Kurdistan, in the latest blow to investors in the troubled company. Afren, a U.K.-listed company, said Monday an annual review of its reserves was expected to show a meaningful reduction to its previous estimates of the Barda Rash field in Kurdistan. The change eliminates 190 million barrels of proven and probable reserves, meaning that, for now, the oil field is essentially a bust for Afren, which has a 60% stake in the project. The lowered estimates come after Afren's board in October. The firings were the result of a scandal involving allegations the Afren executives accepted unauthorized payments connected to some of the company's Nigerian assets, the company said. Former CEO Osman Shahenshah and former COO Shahid Ullah haven't responded to attempts for comment. Afren hasn't commented on the matter since October. Westhouse Securities analyst Jamal Orazbayeva said Afren's disclosure about the Barda Rash oil field "casts a shadow over the company's previous disclosures relating not only to these assets but their assets in general." "The downgrade is very material," Ms. Orazbayeva said. The downgrade adds ratings-firm pressure on the company. Fitch Ratings said Monday there would be no immediate impact, but that could change in the next one to six months because of a possible takeover or lower oil prices. Brent crude prices were trading below $50 a barrel on Monday, at six-year lows. Ms. Orazbayeva said the downgrade could simplify the picture for Nigerian peer Seplat Petroleum Development Co. PLC, which last month for Afren. Afren has exploration licenses elsewhere in Africa, including in Ghana, Kenya and Tanzania. Afren has said it was expecting to produce 32,000 to 36,000 barrels a day last year from Nigerian offshore fields such as the Ebok, Okoro and Setu, as well as the Ogini and Isoko fields onshore. Seplat, which raised $500 million in an initial public offering in London and Lagos last year, was mainly interested in Afren's Nigerian business. Under U.K. takeover rules, Seplat has a Jan. 19 deadline to make a firm takeover offer for Afren or withdraw. Afren originally had high hopes for Kurdistan, saying in 2011 that it expected to be producing 125,000 barrels a day by 2017 from Barda Rash. At the time, the company said the Kurdistan assets, which also include a 20% stake in the neighboring Ain Sifni license, offered near-term development upside and substantial low-risk exploration potential. Afren said Monday it was downgrading the Kurdistan resources following reprocessing of seismic data and after its drilling campaign found more water in the wells than expected and a high level of associated hydrogen sulfide gas, which would require "significant capital" to develop. "We are naturally disappointed and will now consider our strategic options for Barda Rash," said Toby Hayward, Afren's interim chief executive. Alex MacDonald contributed to this article. Write to Selina Williams at Credit: By Selina Williams
Subject: Oil fields; Petroleum industry; Oil reserves
Location: United Kingdom--UK
Company / organization: Name: Afren PLC; NAICS: 324110, 211111; Name: Seplat Petroleum Development Co LLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644515556
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644515556?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Yen Strengthens as Oil Drives Global Inflation Worries; Investors Concerned About Already Low Consumer Prices in Many of World's Largest Economies
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract: None available.
Full text: The Japanese yen strengthened against the dollar and the euro on Monday as falling oil prices fanned fears in financial markets about economic growth and inflation across the globe, pushing investors into assets they perceived as safe. The dollar slipped 0.2% to ¥118.30, down for the second straight session and 1.1% so far this year. The euro lost 0.2% to ¥140.04, falling 3.4% in 2015; the single currency slipped below ¥140 intraday for the first time since Oct. 31 before recovering. Crude-oil prices slid to almost six-year lows on Monday, marking a fall of more than 50% from their June peak. U.S. oil for February delivery fell 4.7% Monday to $46.07 a barrel on the New York Mercantile Exchange, while Brent, the global benchmark, dropped 5.4% to $47.43 a barrel on ICE Futures Europe. The precipitous price plunge, while benefiting oil importers, has raised concerns of aggravating already low consumer prices in many of the world's largest economies. In response, investors have trickled into haven assets, such as U.S. Treasurys, gold and the yen, which saw price gains. "The fall has been so violent and so unrelenting," said Camilla Sutton, chief currency strategist at Scotiabank. "It has that free fall feeling to it which leaves analysts guessing at price bottoms, which in turn is full of uncertainty. That's creating lots of concern in the markets." The currencies of oil-exporting nations have fallen on the day, including the Norwegian krone and the Canadian dollar. In other trade, the euro held steady against the U.S. dollar at $1.1837, hovering above more than nine-year lows. The market next turns its attention to U.S. retail sales numbers due Wednesday. Economists predict retail sales fell 0.2% in December. Write to James Ramage at Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644515558
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644515558?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil States' Budgets Face Crude Awakening; Alaska, Texas and Others Face Plummeting Extraction-Tax Revenue if Low Prices Persist
Author: Campoy, Ana; Peters, Mark; Phillips, Erica E
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Jan 2015: n/a.
Abstract:
From Texas to North Dakota, states that benefited from a surge in domestic oil production in recent years are now bracing for reduced collections of extraction levies known as severance taxes and royalties as prices fall and companies cut back on drilling.
Full text: Energy-producing U.S. states are paring budget forecasts and planning spending cuts amid a plunge in prices that is testing their reliance on revenue from the oil patch. From Texas to North Dakota, states that benefited from a surge in domestic oil production in recent years are now bracing for reduced collections of extraction levies known as severance taxes and royalties as prices fall and companies cut back on drilling. In turn, income- and sales-tax growth could slow as producers cut jobs. While most energy-rich states have amassed ample rainy-day funds in anticipation of the oil industry's historic booms and busts, the falling prices have budget writers scrambling to adjust earlier fiscal projections that had assumed much higher crude-oil prices. In Texas, the country's top oil producer, officials on Monday said the windfall from the recent oil-shale boom will carry over to the budget for the next two fiscal years. But they are expecting the gush of cash from oil production to slow down considerably, projecting a 14% drop in oil-related taxes to $5.7 billion in fiscal 2016 and 2017. "The state economy will continue to expand, though at a much slower pace than we've seen in recent years," said Texas Comptroller Glenn Hegar, a Republican. Still, some Texas politicians who made promises to increase spending on roads and cut taxes remain committed to them. "You want to make sure that your taxation policy promotes growth and doesn't put adverse pressure on home owners," said Republican Paul Bettencourt, an incoming state senator. The consequences are more severe in Alaska, where oil-industry taxes account for 89% of the state's operating revenue, and budget problems loomed even before oil prices dropped. Alaska now has a $3.5 billion hole in its $6.1 billion budget, and Gov. Bill Walker has called on state agencies to reduce budgets by 5% to 8% for the coming fiscal year. The state expects to dip heavily into its $14 billion in reserves to bridge the gap, but officials acknowledge that is not a sustainable solution. "Even though we have the money to cover it, we're still going to make some significant changes on the spending side," said Mr. Walker, an independent. Other states are predicting less pronounced impacts, including North Dakota. The state is diverting only $300 million of the $6.76 billion in oil-tax revenues it plans to collect in the two-year period ending June 30 toward operating costs, with the rest going to trust funds, capital projects and local governments. Still, Gov. Jack Dalrymple said that some water projects could be imperiled if oil prices remained below $55 a barrel for five months, which would trigger a state rule that reduces a key oil-severance tax to zero for most production. "You see people walking around the Capitol looking at their smart phones every couple of hours just keeping track of WTI," said Mr. Dalrymple, a Republican, referring to West Texas Intermediate, the U.S. benchmark price for oil. U.S. oil fell $2.29, or 4.7%, to settle at $46.07 a barrel on the New York Mercantile Exchangeon Monday, the lowest level since April 2009. The U.S. benchmark has fallen 14% so far this year. To be sure, the oil-price drop has a largely positive impact for the U.S. economy, as businesses and consumers across the country enjoy the lowest gasoline prices in five years. Moody's Analytics is estimating a roughly 5% growth in state tax-revenue collections for the fiscal year ending June 30, thanks in part to lower gas prices spurring increased consumer spending. But analysts agree that the economies of oil states, which have largely grown at a faster rate than other states since the recession, would suffer if oil prices stay at current levels for a prolonged period of time. On Monday, Moody's Analytics forecast that if oil remained below $60 a barrel for three years, considered by the firm an unlikely scenario, North Dakota, Alaska and parts of Texas would likely fall into recession. In Louisiana, where severance taxes accounted for 9% of total tax collections in recent years, officials have eliminated 162 vacant positions. State officials said there could be more cuts in coming months, since their revenue forecast is based on an estimate of $81.33 a barrel for oil. In Wyoming, state economists predict the $3.5 billion in general-fund revenue budgeted for the current two-year fiscal period will fall $4.4 million short as energy-production taxes shrink, an amount easily covered by the state's $2 billion rainy-day fund. Gov. Matt Mead said Wyoming has amassed enough reserves to afford increased spending despite lower oil prices. "We can do a lot with the money that we have," said Mr. Mead, a Republican. In New Mexico, which has recovered from the recession more slowly than neighboring states, the price drop is putting state lawmakers in the uncomfortable position of not knowing when they can firmly forecast revenue. State economists in December cut their forecast for oil prices in fiscal 2016 to $66 a barrel from the $88 a barrel they calculated in August. On Friday, lawmakers submitted a $6.29 billion budget proposal based on that new estimate, but state Sen. John Arthur Smith said it might have to be revised down again when the legislative session resumes later this month. "If I had my druthers, we wouldn't be having our session until March or April rather than January," said Mr. Smith, a Democrat. Write to Ana Campoy at , Mark Peters at and Erica E. Phillips at Credit: By Ana Campoy,Mark Peters and Erica E. Phillips
Subject: Budgets; Recessions; Petroleum industry; Severance taxes
Location: United States--US Texas Alaska North Dakota
People: Dalrymple, Jack Hegar, Glenn
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 12, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644542120
Document URL: https: //login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644542120?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Qatar Helps Venezuela Weather Oil Crisis; Venezuela Will Receive 'Several Billion Dollars' in Financing From Qatari banks, President Nicolás Maduro said, as Opposition Members Criticized the Leader's Economic Stewardship.
Author: Vyas, Kejal
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: CARACAS--Venezuela will receive "several billion dollars" in financing from Qatari banks to help the beleaguered South American oil-exporter withstand the fall in crude prices, said President Nicolás Maduro from Doha on Monday. "They're giving us enough oxygen to cover the fall in crude prices," he said in remarks carried on Venezuelan state television. Mr. Maduro, who has visited Russia, China, Iran and Saudi Arabia to seek aid in recent days and traveled to Algeria late Monday, said the preliminary deal with Qatar would help Caracas meet its investment and import needs for this year and next. He didn't name the banks nor offer more details. Qatar didn't comment. The president's effort comes as the global oil benchmark settled below $50 a barrel for the first time in nearly six years on Monday and foreign currency shortages in Venezuela have sparked concerns the country could default on its debt. The Qatar deal follows other announcements of accords that Mr. Maduro made in recent days, including $20 billion in investments from China and deals with Iran to build thousands of housing units for Venezuela's poor. Plans for the presidential tour began in November after Venezuela tried and failed to convince fellow members of the Organization of the Petroleum Exporting Countries to reduce output and stem the slide in prices, Mr. Maduro said on Monday. "We have very positive results from this tour," the president said. "The good news will keep coming." But details are scarce on the accords and opposition members said Mr. Maduro failed to secure loans that would give Caracas immediate relief. These people also say the government is using the drop in commodity prices as an excuse for the recession, which had begun long before oil's slump. "Don't come around here saying that the crisis is due to the drop in oil prices," opposition leader Henrique Capriles said Monday in a statement. "Last year we said that if the [economic] model didn't change, we would enter a much more serious crisis in 2015 and in the streets you can tell that we were right." Mr. Capriles, who lost to Mr. Maduro by a slim margin in April 2013 presidential elections, referred to chronic shortages of food like milk and basic goods like soap that Venezuelans are suffering owing to collapsing domestic production, reduced imports and surging inflation. Mr. Maduro's popularity recently hit a low of 22%, according to Caracas polling company Datanalisis. Chaotic long lines at supermarkets around Venezuela has once again sparked fears of social unrest. Last year, more than 40 people were killed during a wave of antigovernment street demonstrations. "Nicolas and his group is going around touring," Mr. Capriles said. "They went looking for money in China and didn't get it. Now they're going around OPEC countries where they're being told that the oil bonanza will not be back." In recent months, Venezuela's government has repeatedly voiced concerns over the rise in hydraulic fracturing, or fracking, which has caused a boom in shale oil production in the U.S. Mr. Maduro calls fracking a public-health hazard and says that it is part of a U.S. campaign to destabilize oil-dependent foes like Venezuela, Iran and Russia. But Mr. Maduro assured that fracking's days were numbered. "The reserves of fracking are short term. It's estimated that in two years, they should run out." Credit: By Kejal Vyas
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644546686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644546686?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Oil Slips Below $50, Canada Digs In for Long Haul; Oil-Sands Operators, Seeing Long-Term Value, Aren't Likely to Shut Off the Tap Any Time Soon
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Canadian crude exports to the U.S. exceeded 3 million barrels a day in 2014, according to the U.S. Energy Information Administration, a record volume that helped displace other imports, and producers here are looking to tap European and Asian markets.
Full text: CALGARY--In the escalating war of attrition among top oil-producing nations, Canada's biggest oil-sands mines have a message for the market: Don't look to us to cut production. Long the unloved stepchild of so-called unconventional crude production, the oil sands have lured some of the world's top energy producers to a remote corner of Northern Alberta where the heavy oil deposits are richest. There, they have plowed billions of dollars into building up a sprawling industrial complex amid the surrounding forests. And even as oil prices settled below $50 a barrel Monday for the first time in nearly six years, those companies are unlikely to shut off the tap anytime soon thanks to those huge upfront costs, combined with long-term break-even points and lengthy production lives. Unlike shale oil, which requires constant drilling of new wells to maintain output levels, once an oil-sands site is developed it will produce tens or hundreds of thousands of barrels a day, steadily, for up to three decades. On Monday, major producer Canadian Natural Resources Ltd. became the latest to underscore the resilience of oil-sands growth. The company said lower oil prices will force it to trim investment on new projects and curtail its growth forecast--but it still expects overall output to grow about 7% over 2014 levels, and it vowed to keep spending on expanding output at its biggest oil-sands mine over the next two years. Oil prices tumbled to fresh lows Monday as two major banks slashed their price forecasts for crude amid a global supply glut. U.S. oil for February delivery fell 4.7% to $46.07 a barrel. Brent, the global benchmark, dropped 5.3% to $47.43 a barrel on ICE Futures Europe. Both are at their lowest point in almost six years. Canadian Natural will continue expanding production because it expects higher volume will cut operating expenses at its mainstay Horizon mine, currently at 37.13 Canadian dollars a barrel, by at least another 10 Canadian dollars a barrel. "A lot of the costs are fixed in nature," Chief Financial Officer Corey Bieber said in an interview Monday. "You don't necessarily increase your workforce in a corresponding ratio [with production]. If you can increase your denominator and manage your numerator effectively, you wind up with a lower cost per barrel." Canadian crude exports to the U.S. exceeded 3 million barrels a day in 2014, according to the U.S. Energy Information Administration, a record volume that helped displace other imports, and producers here are looking to tap European and Asian markets. Moves such as those by Canadian Natural ensure the oil sands will continue adding to the global oil glut for a long time to come, regardless of the price of crude. That has implications for spot prices, other major oil producers around the world and the future of key infrastructure plays like the Keystone XL pipeline. Existing oil sands surface mines can make money at about $30 a barrel, and the most efficient underground oil sands projects run by Cenovus Energy Inc., a big Canadian operator, can stay in the black at $35 a barrel. That is still above the break-even levels of many traditional oil wells, but below those of other unconventional sources of crude, including most production from the Bakken Shale formation in North Dakota. "It's not well understood just how robust the oil sands are. If you stopped expansion of the oil sands tomorrow, you would have no decline in the production base for decades," Cenovus Chief Executive Brian Ferguson said. "What we do is design for 30-year flat production lives" at oil-sands fields, he said. The long-term nature of the oil sands doesn't come without risk. A prolonged price slump could erode cash flow and crimp companies' ability to service debt. Lower crude prices will tighten profit margins and push producers to defer investment on new projects, which are among the costliest to develop in the industry alongside drilling for oil at deep-water offshore sites and in the Arctic. In northern Alberta, hockey-puck-hard oil embedded in subterranean sand deposits is mined or extracted from wells and rendered into a liquid form for transport to refineries. Royal Dutch Shell PLC's Canadian unit said Friday that it would cut up to 10% of its oil sands mine workforce to offset the drop in crude oil prices. Some smaller Calgary-based oil-sands producers have slashed budgets and production forecasts. And even before the recent price plunge, Statoil ASA of Norway in September and France's Total SA in May announced plans to postpone development of new oil-sands projects, citing cost issues. But few of the largest producers in Canada envision scaling back production at their oil-sands operations. That strategy puts Canada on a collision course with Saudi Arabia and other low-cost producers seeking to shore up market share and force marginal producers to the sidelines. On the day in late November that OPEC failed to reach a consensus on production cuts, setting off a plunge in crude prices and sending shockwaves through the global energy industry, the chief executive of the largest oil-sands producer made an unusual move: He doubled down on his plans to boost production in northern Alberta by tens of thousands of barrels and to spend billions of dollars on expansion in the year ahead. Steve Williams, CEO of Canadian oil-sands giant Suncor Energy Inc., said on Nov. 27 that his company's strong balance sheet would allow it to ride out the turbulence and stick with a bullish growth strategy. "Price volatility is a fact of life in our industry," Mr. Williams said. "In evaluating any investment, Suncor takes a much longer-term view than days or months. We are able to take the perspective of pricing in decades." Suncor, the single largest oil-sands producer, is boosting capital spending next year to at least C$7.2 billion and will lift output by as much as 11%. Canadian Natural plans to increase production of oil and natural-gas liquids 7% in 2015 and spend $C6.2 billion. Syncrude Canada Ltd., a consortium whose oil sands strip mines are operated by Exxon Mobil Corp., projects a 6% gain in production next year to 103 million barrels of oil, or about 275,000 barrels a day. The price of entry to this elite club is steep--tens of billions of dollars--so the number of players is limited to the biggest multinationals such as Exxon Mobil Corp. and Shell, state-owned enterprises such as China National Offshore Oil Corp. and a handful of Calgary-based independents. Debt-serving obligations already have dinged Canadian Oil Sands Ltd., the largest owner of the Syncrude consortium, which cut its dividend 43% in December to stay below a $2 billion self-imposed net-debt cap. But once the vertigo-inducing upfront investments are made, oil sands sites produce for decades and volumes rarely dip, even if profit margins are negligible, as companies await the next cyclical turn in prices. Even with crude prices down by half since July, Cnooc's Canadian subsidiary started up production in early December of a new 20,000-barrel-a-day oil-sands field known as Kinosis. Oil-sands operators in Canada say they are confident demand for heavy oil-sands crude will continue to rise, especially from their best customer--the U.S., which is still the world's largest consumer of oil. North America is awash in light crude oil fracked from shale formations, but U.S. refineries still need heavy crude. Much of that now comes from Canada's oil sands, which increasingly are displacing shipments of heavy oil from Mexico and Venezuela. That is why the industry wants the Keystone XL pipeline to ship crude from the oil sands of northern Alberta directly to refineries on the U.S. Gulf Coast. With or without Keystone XL, if production continues to grow, Canada's oil-sands producers will likely face capacity constraints on existing pipelines and high costs for shipping their crude by rail. Nicole Friedman contributed to this article. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Oil sands; Petroleum industry; Mines; Energy economics; Crude oil prices
Location: Canada United States--US
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644551032
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644551032?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Extends Selloff As OPEC Seen Standing Firm on Output; U.S. Forecasts Global Oil Market Will Remain Oversupplied
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed that crude stocks rose by 3.9 million barrels, while gasoline inventories climbed by 1.6 million barrels and distillate supplies rose by 400,000 barrels, according to industry sources.
Full text: Global oil prices fell further Tuesday, bringing their year-to-date decline to 19%, on signs the market's oversupply would be long-lasting. Market participants estimate that crude supply is overshooting demand by as much as 2 million barrels a day. That mismatch has driven prices off a cliff since last summer. Brent, the global benchmark, has fallen to its lowest level since March 2009. The United Arab Emirates' oil minister said Tuesday that the Organization of the Petroleum Exporting Countries would stand firm on its decision to keep output unchanged. The U.S. government also released forecasts showing that it expects the global oil market to remain oversupplied this year and next. Brent crude for February delivery fell 84 cents, or 1.8%, to $46.59 a barrel on ICE Futures Europe, the lowest settlement since March 2009. On the New York Mercantile Exchange, oil futures fell 18 cents, or 0.4%, to $45.89 a barrel, the lowest since April 2009. U.S. prices fell below $45 a barrel earlier in the session. The U.S. contract briefly traded above the Brent contract for the first time since 2012. OPEC opted at its November meeting to maintain its production quota of 30 million barrels a day, even though that level exceeds the group's estimated demand for its oil. "[OPEC] cannot continue protecting a certain price. That is not the only aim of OPEC," said Suhail Mohamed Faraj al-Mazrouei, the U.A.E. oil minister, at an energy event in Abu Dhabi on Tuesday. He said it would take time for oil prices to stabilize, but whether that timeline is going to be two or three years depends on how rational oil producers are. He said U.S. shale-oil producers will set the "floor" for tumbling crude prices. "Anytime we get one of those OPEC officials reiterating their unwillingness to cut output, the market resumes its attempt to rebalance" at a lower price, said Gene McGillian, senior analyst at Tradition Energy. "We continue to grind lower." The U.S. Energy Information Administration, in a forecast released Tuesday, called for global oil supplies to exceed demand in 2015 and 2016. The agency expects Nymex prices to average $54.58 a barrel this year before rebounding to $71 a barrel in 2016. Traders are waiting for weekly EIA inventory data to be released on Wednesday. The figures are expected to show that oil supplies rose by 500,000 barrels in the week ended Jan. 9, according to a survey of analysts conducted by The Wall Street Journal. Analysts also expect the survey to show that inventories of gasoline rose by 2.6 million barrels, while stocks of distillates, including diesel and heating oil, rose by 1 million barrels. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed that crude stocks rose by 3.9 million barrels, while gasoline inventories climbed by 1.6 million barrels and distillate supplies rose by 400,000 barrels, according to industry sources. Gasoline futures for February delivery fell 0.6 cent, or 0.5%, to $1.2685 a gallon, the lowest settlement since March 2009. Diesel futures fell 2.11 cents, or 1.3%, to $1.6330 a gallon, the lowest since July 2009. Summer Said and Georgi Kantchev contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Crude oil prices; Petroleum industry; Supply & demand; Inventory
Location: United States--US United Arab Emirates
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644565279
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644565279?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
UAE Minister Says OPEC Won't Change Output Decision; Oil Minister Says Producers Outside OPEC Need to Be Rational
Author: Said, Summer; Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
The U.A.E. is one of the 10 largest oil and natural gas producers in the world, according to the U.S. Energy Information Administration.
Full text: The Organization of the Petroleum Exporting Countries will stick to its decision to keep oil output unchanged regardless of , the United Arab Emirates' oil minister said Tuesday. Instead, oil producers outside OPEC need to be rational and adjust their output according to the growth rate of oil supply in the market, Suhail Mohamed Faraj al-Mazrouei told an energy event in Abu Dhabi organized by Gulf Intelligence. Oil prices plunged following the minister's comments, pushing the U.S. oil benchmark below the $45 a barrel mark, as concerns about an oversupply in global oil markets were reinforced. Mr. al-Mazrouei's comments come in the wake of a continuing glut in oil markets which has OPEC members facing off with the American shale boom that has significantly boosted U.S. oil production. OPEC controls more than one-third of global oil production. "[OPEC] cannot continue protecting a certain price. That is not the only aim of OPEC," Mr. al-Mazrouei said. "We are concerned about the balance of the market but we cannot be the only party that is responsible to balance the market," he said. OPEC, , has typically attempted to adjust its oil production levels when oil prices rise or fall too sharply. But at its November 2014 meeting in Vienna OPEC decided to , accelerating the selloff in oil markets to its lowest levels since 2009. "We are passing through very interesting times...it is unlikely that we will see a sudden rise [in oil prices]," Mr. al-Mazrouei said. He said it would take time for oil prices to stabilize, but whether that timeline is going to be two or three years depends on how rational oil producers are. He said current oil prices aren't sustainable for OPEC or for other producers like shale producers, but the U.A.E. will continue to build its total production capacity regardless of oil prices because most of the capacity expansion projects have been already commissioned. "We aren't going to act irrationally because of the drop in the oil prices," he said. The U.A.E. is one of the 10 largest oil and natural gas producers in the world, according to the U.S. Energy Information Administration. But like its fellow OPEC members the Middle Eastern oil producer needs high oil prices to sustain government budgets and keep revenue flowing. However, Ali Al-Yabhouni, the U.A.E.'s OPEC governor, said although oil producers from the Gulf region aren't happy about current oil prices, they have high enough financial reserves to weather them. Gulf producers like high oil prices, "but are we worried about the current prices? No," he said. Analysts estimate that oil prices need to be at roughly $100 a barrel for government budgets in countries like Russia, Venezuela and Nigeria to . But Goldman Sachs has estimated that U.S. shale production can be choked off only when oil stays below $40 a barrel for a sustained period. Whatever price can keep shale oil flowing is going to be the fair price for conventional producers to produce, and whether it is $60, $70 or $80, that figure is where the market will stabilize, Mr. al-Mazrouei said. Write to Summer Said at and Eric Yep at Credit: By Summer Said And Eric Yep
Subject: Petroleum industry; Crude oil prices; Petroleum production
Location: United States--US Abu Dhabi United Arab Emirates United Arab Emirates
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644568911
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644568911?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Qatar Helps Venezuela Weather Oil Crisis
Author: Vyas, Kejal
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Jan 2015: A.14.
Abstract:
Plans for the presidential tour began in November after Caracas tried and failed to convince fellow members of the Organization of the Petroleum Exporting Countries to reduce output and stem the slide in prices, Mr. Maduro said on Monday.
Full text: CARACAS -- Venezuela will receive "several billion dollars" in financing from Qatari banks to help the beleaguered South American oil-exporter withstand the fall in crude prices, said President Nicolas Maduro from Doha on Monday. "They're giving us enough oxygen to cover the fall in crude prices," he said in remarks carried on Venezuelan state TV. Mr. Maduro, who has visited Russia, China, Iran and Saudi Arabia to seek aid in recent days and traveled to Algeria late Monday, said the preliminary deal with Qatar would help Caracas meet its investment and import goals for this year and next. He didn't name the banks nor offer more details. Qatar didn't comment. The president's effort comes as the global oil benchmark settled below $50 a barrel for the first time in nearly six years on Monday and foreign-currency shortages in Venezuela have sparked concerns the country could default on its debt. Mr. Maduro trumpeted other deals in recent days, including $20 billion in investments from China and an accord with Iran to build thousands of housing units for Venezuela's poor. Plans for the presidential tour began in November after Caracas tried and failed to convince fellow members of the Organization of the Petroleum Exporting Countries to reduce output and stem the slide in prices, Mr. Maduro said on Monday. "We have very positive results from this tour," the president said. "The good news will keep coming." Details are scarce on the accords, and opposition members said Mr. Maduro failed to secure loans that would give Caracas immediate relief. These people said that the Venezuelan leader was blaming the recession on oil's decline, but that the economic slump began long before. "Don't come around here saying that the crisis is due to the drop in oil prices," opposition leader Henrique Capriles said in a statement. "Last year we said that if the model didn't change, we would enter a much more serious crisis in 2015 and in the streets you can tell that we were right." Credit: By Kejal Vyas
Subject: Recessions; Petroleum industry
Location: Iran China Algeria Russia Saudi Arabia Qatar Venezuela
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2015
Publication date: Jan 13, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics --Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644573013
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644573013?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Energy-Heavy States Get a Crude Awakening --- Alaska, Texas and Others Face Budget Hits if Low Oil Prices Persist; Rainy-Day Funds to Offset Plummeting Tax Revenue
Author: Campoy, Ana; Peters, Mark; Phillips, Erica E
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Jan 2015: A.3.
Abstract:
From Texas to North Dakota, states that benefited from a surge in domestic oil production in recent years are now bracing for reduced collections of extraction levies known as severance taxes and royalties as prices fall and companies cut back on drilling.
Full text: Energy-producing U.S. states are paring budget forecasts and planning spending cuts amid a plunge in prices that is testing their reliance on revenue from the oil patch. From Texas to North Dakota, states that benefited from a surge in domestic oil production in recent years are now bracing for reduced collections of extraction levies known as severance taxes and royalties as prices fall and companies cut back on drilling. In turn, income- and sales-tax growth could slow as producers cut jobs. While most energy-rich states have amassed ample rainy-day funds in anticipation of the oil industry's historic booms and busts, the falling prices have budget writers scrambling to adjust earlier fiscal projections that had assumed much higher crude-oil prices. In Texas, the country's top oil producer, officials on Monday said the windfall from the recent oil-shale boom will carry over to the budget for the next two fiscal years. But they are expecting the gush of cash from oil production to slow down considerably, projecting a 14% drop in oil-related taxes to $5.7 billion in fiscal 2016 and 2017. "The state economy will continue to expand, though at a much slower pace than we've seen in recent years," said Texas Comptroller Glenn Hegar, a Republican. Still, some Texas politicians who made promises to increase spending on roads and cut taxes remain committed to them. "You want to make sure that your taxation policy promotes growth and doesn't put adverse pressure on home owners," said Republican Paul Bettencourt, an incoming state senator. The consequences are more severe in Alaska, where oil-industry taxes account for 89% of the state's operating revenue, and budget problems loomed even before oil prices dropped. Alaska now has a $3.5 billion hole in its $6.1 billion budget, and Gov. Bill Walker has called on state agencies to reduce budgets by 5% to 8% for the coming fiscal year. The state expects to dip heavily into its $14 billion in reserves to bridge the gap, but officials acknowledge that is not a sustainable solution. "Even though we have the money to cover it, we're still going to make some significant changes on the spending side," said Mr. Walker, an independent. Other states are predicting less pronounced impacts, including North Dakota. The state is diverting only $300 million of the $6.76 billion in oil-tax revenues it plans to collect in the two-year period ending June 30 toward operating costs, with the rest going to trust funds, capital projects and local governments. Still, Gov. Jack Dalrymple said that some water projects could be imperiled if oil prices remained below $55 a barrel for five months, which would trigger a state rule that reduces a key oil-severance tax to zero for most production. "You see people walking around the Capitol looking at their smart phones every couple of hours just keeping track of WTI," said Mr. Dalrymple, a Republican, referring to West Texas Intermediate, the U.S. benchmark price for oil. U.S. oil fell $2.29, or 4.7%, to settle at $46.07 a barrel on Monday, the lowest since April 2009. To be sure, the oil-price drop has a largely positive impact for the U.S. economy, as businesses and consumers across the country enjoy the lowest gasoline prices in five years. Moody's Analytics is estimating a roughly 5% growth in state tax-revenue collections for the fiscal year ending June 30, thanks in part to lower gas prices spurring increased consumer spending. But analysts agree that the economies of oil states, which have largely grown at a faster rate than other states since the recession, would suffer if oil prices stay at current levels for a prolonged period of time. On Monday, Moody's Analytics forecast that if oil remained below $60 a barrel for three years, considered by the firm an unlikely scenario, North Dakota, Alaska and parts of Texas would likely fall into recession. In Louisiana, where severance taxes accounted for around 9% of total tax collections in recent years, officials have eliminated 162 vacant positions. State officials said there could be more cuts in coming months, since their revenue forecast is based on an estimate of $81.33 a barrel for oil. In Wyoming, state economists predict the $3.5 billion in general-fund revenue budgeted for the current two-year fiscal period will fall $4.4 million short as energy-production taxes shrink, an amount easily covered by the state's $2 billion rainy-day fund. Gov. Matt Mead said Wyoming has amassed enough reserves to afford increased spending despite lower oil prices. "We can do a lot with the money that we have," said Mr. Mead, a Republican. In New Mexico, which has recovered from the recession more slowly than neighboring states, the price drop is putting state lawmakers in the uncomfortable position of not knowing when they can firmly forecast revenue. State economists in December cut their forecast for oil prices in fiscal 2016 to $66 a barrel from the $88 a barrel they calculated in August. On Friday, lawmakers submitted a $6.29 billion budget proposal based on that new estimate, but state Sen. John Arthur Smith said it might have to be revised down again when the legislative session resumes later this month. "If I had my druthers, we wouldn't be having our session until March or April rather than January," said Mr. Smith, a Democrat. Credit: By Ana Campoy, Mark Peters and Erica E. Phillips
Subject: Budgets; Recessions; Petroleum industry; Severance taxes; Crude oil prices; State budgets
Location: United States--US Texas Alaska North Dakota
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.3
Publication year: 2015
Publication date: Jan 13, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644573071
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644573071?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Forecasters Lower Oil-Price Calls --- Global Benchmark Ends Under $50 a Barrel; Goldman Predicts an Average $42 for Second Quarter
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Jan 2015: C.4.
Abstract:
The revisions came on the heels of reduced forecasts released last week by Citigroup Inc., BNP Paribas SA and Commerzbank AG. Traders said temporary shutdowns at several U.S. oil refineries raised expectations that less oil will be processed, cutting into demand.
Full text: Corrections & Amplifications Deutsche Bank AG's most recent forecast is that Nymex oil prices will average $55.40 a barrel in 2015. A graphic with an In the Markets article Tuesday about oil-price forecasts incorrectly said Deutsche Bank expects average prices of $67.50 a barrel. (WSJ January 14, 2015) The global oil-price benchmark settled below $50 a barrel for the first time in nearly six years after Goldman Sachs Group Inc. reduced its forecasts, saying lower prices are needed to trim supplies. The price rout weighed on other markets: Energy stocks fell, and copper slid to a five-year low. After dropping by half in 2014, Brent oil prices already are down 17% for the year, as robust growth in global supplies continues to outpace demand. The Organization of the Petroleum Exporting Countries chose not to lower its production quota in November, putting more pressure on non-OPEC producers such as the U.S. and Canada to cut back on output. Goldman Sachs and Societe Generale SA sharply lowered their oil-price forecasts in reports released Sunday and Friday, respectively. Goldman called for the U.S. oil benchmark to average $40.50 a barrel and Brent to average $42 a barrel in the second quarter. "Forty dollars was an outlier number just a couple months ago," said John Kilduff, founding partner at Again Capital. Goldman's "call for $40 oil could engender a lot of folks to throw in the towel." The revisions came on the heels of reduced forecasts released last week by Citigroup Inc., BNP Paribas SA and Commerzbank AG. Traders said temporary shutdowns at several U.S. oil refineries raised expectations that less oil will be processed, cutting into demand. Brent for February delivery dropped $2.68, or 5.3%, to $47.43 a barrel on ICE Futures Europe, for the lowest settlement since March 2009. U.S. oil for February delivery settled down $2.29, or 4.7%, at $46.07 a barrel on the New York Mercantile Exchange, the lowest since April 2009. The U.S. benchmark is off 14% so far this year. Whereas many analysts said last autumn that U.S. shale-oil producers wouldn't be able to produce profitably if prices fell below $80 a barrel, market watchers now say much lower prices are needed to reduce U.S. supply growth. Goldman expects Brent prices will average $50.40 a barrel this year, down from a late October forecast of $83.75 a barrel. For the U.S. benchmark, Goldman expects prices to average $47.15 a barrel in 2015, down from $73.75. Goldman is considered a commodities-focused investment bank, and its forecasts are closely watched. Societe Generale lowered its 2015 Brent price forecast to $55 a barrel, from $70 in late November, and its U.S. crude-oil forecast to $51 a barrel, from $65. "Markets are still pricing in a very ugly first half of this year," Michael Wittner, Societe Generale's head of oil research, told The Wall Street Journal. He said he expects global oil storage to build by 1.6 million barrels a day in the first quarter and 1.7 million barrels a day in the second quarter. Drivers are enjoying the benefit of lower oil prices. U.S. gasoline prices averaged $2.13 a gallon Monday. That is down $1.18 a gallon from a year earlier, according to AAA.
Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 13, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644573132
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644573132?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Oil Slips Below $50, Canada Digs In For Long Haul
Author: Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Jan 2015: A.1.
Abstract:
Canadian crude exports to the U.S. exceeded 3 million barrels a day in 2014, according to the U.S. Energy Information Administration, a record volume that helped displace other imports, and producers here are looking to tap European and Asian markets.
Full text: CALGARY -- In the escalating war of attrition among top oil-producing nations, Canada's biggest oil-sands mines have a message for the market: Don't look to us to cut production. Long the unloved stepchild of so-called unconventional crude production, the oil sands have lured some of the world's top energy producers to a remote corner of Northern Alberta where the heavy oil deposits are richest. There, they have plowed billions of dollars into building up a sprawling industrial complex amid the surrounding forests. And even as oil prices settled below $50 a barrel Monday for the first time in nearly six years, those companies are unlikely to shut off the tap anytime soon thanks to those huge upfront costs, combined with long-term break-even points and lengthy production lives. Unlike shale oil, which requires constant drilling of new wells to maintain output levels, once an oil-sands site is developed it will produce tens or hundreds of thousands of barrels a day, steadily, for up to three decades. On Monday, major producer Canadian Natural Resources Ltd. became the latest to underscore the resilience of oil-sands growth. The company said lower oil prices will force it to trim investment on new projects and curtail its growth forecast -- but it still expects overall output to grow about 7% over 2014 levels, and it vowed to keep spending on expanding output at its biggest oil-sands mine over the next two years. Oil prices tumbled to fresh lows Monday as two major banks slashed their price forecasts for crude amid a global supply glut. U.S. oil for February delivery fell 4.7% to $46.07 a barrel. Brent, the global benchmark, dropped 5.3% to $47.43 a barrel on ICE Futures Europe. Both are at their lowest point in almost six years. Canadian Natural will continue expanding production because it expects higher volume will cut operating expenses at its mainstay Horizon mine, currently at 37.13 Canadian dollars a barrel, by at least another 10 Canadian dollars a barrel. "A lot of the costs are fixed in nature," Chief Financial Officer Corey Bieber said in an interview Monday. "You don't necessarily increase your workforce in a corresponding ratio [with production]. If you can increase your denominator and manage your numerator effectively, you wind up with a lower cost per barrel." Canadian crude exports to the U.S. exceeded 3 million barrels a day in 2014, according to the U.S. Energy Information Administration, a record volume that helped displace other imports, and producers here are looking to tap European and Asian markets. Moves such as those by Canadian Natural ensure the oil sands will continue adding to the global oil glut for a long time to come, regardless of the price of crude. That has implications for spot prices, other major oil producers around the world and the future of key infrastructure plays like the Keystone XL pipeline. Existing oil sands surface mines can make money at about $30 a barrel, and the most efficient underground oil sands projects run by Cenovus Energy Inc., a big Canadian operator, can stay in the black at $35 a barrel. That is still above the break-even levels of many traditional oil wells, but below those of other unconventional sources of crude, including most production from the Bakken Shale formation in North Dakota. "It's not well understood just how robust the oil sands are. If you stopped expansion of the oil sands tomorrow, you would have no decline in the production base for decades," Cenovus Chief Executive Brian Ferguson said. "What we do is design for 30-year flat production lives" at oil-sands fields, he said. The long-term nature of the oil sands doesn't come without risk. A prolonged price slump could erode cash flow and crimp companies' ability to service debt. Lower crude prices will tighten profit margins and push producers to defer investment on new projects, which are among the costliest to develop in the industry alongside drilling for oil at deep-water offshore sites and in the Arctic. In northern Alberta, hockey-puck-hard oil embedded in subterranean sand deposits is mined or extracted from wells and rendered into a liquid form for transport to refineries. Royal Dutch Shell PLC's Canadian unit said Friday that it would cut up to 10% of its oil sands mine workforce to offset the drop in crude oil prices. Some smaller Calgary-based oil-sands producers have slashed budgets and production forecasts. And even before the recent price plunge, Statoil ASA of Norway in September and France's Total SA in May announced plans to postpone development of new oil-sands projects, citing cost issues. But few of the largest producers in Canada envision scaling back production at their oil-sands operations. That strategy puts Canada on a collision course with Saudi Arabia and other low-cost producers seeking to shore up market share and force marginal producers to the sidelines. The price of entry to this elite club is steep -- tens of billions of dollars -- so the number of players is limited to the biggest multinationals such as Exxon Mobil Corp. and Shell, state-owned enterprises such as China National Offshore Oil Corp. and a handful of Calgary-based independents. Debt-serving obligations already have dinged Canadian Oil Sands Ltd., which cut its dividend 43% in December to stay below a $2 billion self-imposed net-debt cap. Oil-sands operators in Canada say they are confident demand for heavy oil-sands crude will continue to rise, especially from their best customer -- the U.S., which is still the world's largest consumer of oil. North America is awash in light crude oil fracked from shale formations, but U.S. refineries still need heavy crude. Much of that now comes from Canada's oil sands, which increasingly are displacing shipments of heavy oil from Mexico and Venezuela. That is why the industry wants the Keystone XL pipeline to ship crude from the oil sands of northern Alberta directly to refineries on the U.S. Gulf Coast. With or without Keystone XL, if production continues to grow, Canada's oil-sands producers will likely face capacity constraints on existing pipelines and high costs for shipping their crude by rail. --- Nicole Friedman contributed to this article. Credit: By Chester Dawson
Subject: Oil sands; Mines; Energy economics; Petroleum industry; Crude oil prices
Location: United States--US Canada
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112
Classification: 9172: Canada; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 13, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644573169
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644573169?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owne r. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Stocks Pinched by Oil; Dow Loses 97
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Jan 2015: C.4.
Abstract:
Though they have been cheered by the steady growth in the U.S. economy, market watchers are bracing for wider swings in stocks, citing uncertainty over the Federal Reserve's timeline for raising interest rates and weak growth elsewhere in the developed world.
Full text: U.S. stocks retreated for their second session in a row, dragged lower by a renewed drop in oil prices, as investors focused on coming earnings reports. The Dow Jones Industrial Average declined 96.53 points, or 0.5%, to 17640.84, while the S&P 500 index lost 16.55 points, or 0.8%, to 2028.26. The Nasdaq Composite Index shed 39.36 points, or 0.8%, to 4664.71. Stocks in Japan fell early Tuesday, after the government slashed its growth outlook for 2014. The Nikkei Stock Average was down 2%, as investors reacted to the government's move Monday to raise Japan's growth forecast for the next fiscal year but cut the outlook for this year. Tokyo was closed for a holiday Monday, so Tuesday was the first time investors had a chance to react to the new forecasts. In the U.S. Monday, stocks kicked off the session with a modest gain, but reversed course as oil prices plumbed fresh lows. Energy stocks led the charge lower, with shares of S&P 500 energy companies posting the sharpest decline among major indexes with a loss of 2.8%. The retreat marked the latest selloff for oil-and-gas companies, which have been hit hard amid a monthslong swoon in oil prices. Among Dow components, Chevron posted the biggest loss on Monday, down $2.33, or 2.2%, to $105.88. Exxon Mobil fell 1.77, or 1.9%, to 90.33. "Everyone is trying to come to grips with the lower oil prices," said Rick Fier, director of execution services at Conifer Securities. "It's not so much that crude is down that's scary -- it's the amount it goes down. If it could stabilize for a while it would be a relief." U.S. oil-futures prices tumbled 4.7% to $46.07 a barrel, their lowest finish since April 2009. The latest decline was fueled by a report from Goldman Sachs Group analysts, who cut their oil-price forecast to $40.50 a barrel for the second quarter, saying prices need to stay lower for longer to bring down supply and balance the market. Also trading lower Monday were information-technology shares, down 1.3%. Telecommunications shares, however, posted gains. The S&P 500 is down 1.5% so far in 2015 after rising 11% last year. Investors widely expect a rockier period for markets in the year ahead. Though they have been cheered by the steady growth in the U.S. economy, market watchers are bracing for wider swings in stocks, citing uncertainty over the Federal Reserve's timeline for raising interest rates and weak growth elsewhere in the developed world. Still, the S&P 500 remains just 3% below its most recent all-time high of 2090.57 reached on Dec. 29. Investors are set to get further clues on how the drop in oil prices is affecting corporate America with the start of the fourth-quarter earnings season, which unofficially began after the close Monday with an update from Alcoa. Shares of the aluminum maker rose 1.6% in after-hours trading after the company's earnings and revenues beat Wall Street expectations. Elsewhere, investors are girding for lackluster profit reports. Earnings for companies in the S&P 500 are expected to rise 1.1% in the quarter, the weakest quarter for profit growth since the third quarter of 2012, according to FactSet. The sharp decline in oil prices has curbed profits in the once-burgeoning energy sector, while the stronger dollar is crimping business for exporters and companies with large overseas operations. The WSJ Dollar index has now risen in six of the past seven trading sessions and is up 13.9% from a year earlier. On Monday, the index rose 0.16% to 83.89. "We had some real dollar strength the second half of last year and it's not going to be a short-lived phenomenon," said Mike O'Rourke, chief market strategist at Jones Trading. "I think companies are going to be more realistic about the currency and the headwinds it's going to create, and I think that should create some doubt among investors' minds." Credit: By Dan Strumpf
Subject: Stock prices; Dow Jones averages; Daily markets (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 13, 2015
column: Monday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644573197
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644573197?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
European Markets Close Higher; Rebound Follows Early Jitters Over Falling Oil Prices
Author: Stubbington, Tommy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
In Europe, hopes that the European Central Bank will soon deliver a program of large-scale asset purchases have helped limit declines in equity markets, while many investors see cheaper oil as a longer-term positive for stocks in the region, which is a large net oil importer.
Full text: European markets closed higher Tuesday, rebounding after an early wobble sparked by a fresh plunge in the price of oil. The Stoxx Europe 600 erased opening losses to end 1.4% higher. Travel stocks on the index led the way, climbing 1.9%, as investors looked to companies that will benefit from cheaper oil. International Consolidated Airlines Group and Deutsche Lufthansa were among the top risers. U.S. stock markets also pushed higher, with the S&P 500 cash index posting a gain of over 1% and the DJIA 1.2% by the European close. Oil continued its downward march , with Brent crude falling more than 3%. "The collapsing oil price remains comfortably the biggest story in global asset markets [and] there is still no sign of a support level emerging," said Ian Williams, economist and strategist at brokerage Peel Hunt. In Europe, hopes that the European Central Bank will soon deliver a program of large-scale asset purchases have helped limit declines in equity markets, while many investors see cheaper oil as a longer-term positive for stocks in the region, which is a large net oil importer. The fallout continued to shake up bond and currency markets. The Russian ruble , which is highly sensitive to oil prices, fell 4% to almost 66 to the U.S. dollar. The British pound recovered from a brief dive after U.K. consumer price inflation fell to an annual rate of 0.5%, its slowest pace in more than a decade , partly due to lower the lower cost of energy. Sterling was steady against the dollar at $1.5179 having fallen close to a six-month-low as investors further pushed back their expectations for the first interest rate increase from the Bank of England. Derivatives linked to future interest rates aren't fully pricing in a BOE interest rate rise until July 2016, compared with May earlier this week, according to Joakim Tiberg, a fixed income strategist at UBS. "It comes down to whether the BOE will see through any short-term drop in inflation caused by falling commodity prices. But certainly the headline number points toward a shrinking chance of a rate hike this year," Mr. Tiberg said. More broadly, oil's decline has also dragged down inflation expectations across the globe, boosting government bonds. U.K. 10-year government bond yields fell to a more than two-year low of 1.51% before recovering to 1.59%. Yields fall as prices rise. The 10-year U.S. Treasury yield briefly fell to 1.87%, its lowest in nearly two years. Write to Tommy Stubbington at tommy.stubbington@wsj.com Credit: By Tommy Stubbington
Subject: Interest rates; Stock exchanges; Prices; Investments; American dollar
Location: United States--US
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644607877
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644607877?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Swift Energy Cuts Capital Budget on Lower Oil Prices; Oil-and-Gas Producer Targets 2015 Spending Down 70% to 75% From Last Year
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
A flood of crude from U.S. shale has disrupted the global oil market, driving prices off a cliff since last summer.
Full text: Swift Energy Co. slashed its capital budget for the year on Tuesday, citing continued declines in energy prices. The oil-and-gas producer will now spend between $100 million to $125 million this year, down about 70% to 75% from last year. A flood of crude from U.S. shale has disrupted the global oil market, driving prices off a cliff since last summer. Oil prices lost about 5% on Monday alone. Energy companies including Chevron Corp. and ConocoPhillips have responded by slashing budgets, laying off workers and halting drilling plans. Houston-based Swift now expects to produce between 11.2 million and 11.4 million barrels of oil equivalent this year, down from the 12.2 million to 12.3 million barrels of oil equivalent Swift had been targeting for 2014. Swift also said it is working to reduce its service costs and corporate expenses. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Petroleum industry; Oil reserves
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644677078
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644677078?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Japan Expects Higher Tax Revenue; Abe Budget Plan Counts on Corporate Profits Continuing to Grow on Cheap Oil, Weak Yen
Author: Obe, Mitsuru
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: TOKYO--Japan expects tax revenue to reach its highest level in 24 years in the year starting April 2015, allowing Prime Minister Shinzo Abe to slash deficits and potentially put the highly indebted nation on a more sustainable path. Officials this week released the outline of next fiscal year's budget ahead of formal approval set for Wednesday by Mr. Abe's cabinet. Parliament, which is controlled by his ruling coalition, is expected to approve the budget in the spring. The budget plan counts on Japanese corporate profits continuing to grow in the coming year, backed by a weak yen and cheap oil. Higher profits should allow firms to pay higher bonuses and salaries, stimulating private consumption, government officials said. For the moment, the projection looks achievable. It assumes crude-oil prices will average $69 per barrel, whereas the global benchmark, Brent crude, was trading at around $46 per barrel Tuesday. Since Japan imports almost all its oil, the cheap prices save corporations money and, other things equal, raise profits. However, further turmoil in Europe, a slowdown in China or weaker-than-expected consumption at home could hit Japan's economy in 2015 and cause tax revenue to fall short of projections. "Tax revenue has increased strongly in the current fiscal year, and it is hoped that it will grow again in the next fiscal year," said Finance Minister Taro Aso on Friday. But he added that "there's nothing certain about the economy." The government budget estimates tax revenue for fiscal 2015 will total ¥54.5 trillion ($460 billion), a 5.4% increase over the estimate for the current year, which was recently revised upward. More than half of the increase is due to a sales-tax increase that took effect last year, while the remainder hinges on a rebound in economic growth after a recession in 2014, officials said. If the projection comes to pass, that means a 24% jump in tax revenue in three years under the leadership of Mr. Abe, who took office in December 2012, serving as a vindication of his policy of resolving the nation's economic malaise by stamping out deflation and reviving economic growth. The prime minister postponed a second tax increase that had been set to take effect October 2015, saying growth was more important than trying to fix Japan's finances right away. Japan is the world's most indebted major economy, with total government debt more than twice its gross domestic product. So far, markets have taken the situation in stride, and for 10 years at interest of less than 0.3%. The budget projection presumes global economic growth of 3.6%, with exports rising 5.2% in real terms. Imports are expected to grow at a more modest 3.9%. Another reason for Japan's falling deficit is a relatively restrained spending plan after earlier efforts by Mr. Abe to stimulate growth through government projects. Mr. Abe will keep annual spending at ¥96.3 trillion, an increase of 0.5% from the current fiscal year's initial budget, while borrowing will be reduced by 11% to ¥36.9 trillion, the smallest in seven years, according to the budget plan. Cheap oil prices are likely to increase national income by 1% to 2%, said Shuji Tonouchi, an economist with Mitsubishi UFJ Morgan Stanley Securities. However, economists say it isn't clear yet whether corporations and consumers will spend the extra money and spur more sustained growth. Japan's fiscal consolidation plan calls on the government by fiscal 2015 to reduce by half deficits in the primary budget--which measures spending and revenue excluding new government bond issuance and interest payments. The primary budget is supposed to turn to surplus by 2020. Mr. Abe's policies have helped raise employment and wages have gone slightly up, resulting in higher income-tax revenue. But many of the new jobs are part-time, and many Japanese, especially outside of Tokyo, say they don't feel the benefits of Abenomics. Write to Mitsuru Obe at Credit: By Mitsuru Obe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644677174
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644677174?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia's Ruble Sinks to Lowest Level Since December Currency Run; Concerns Over Falling Oil Prices and Insufficient Central Bank Intervention
Author: Ostroukh, Andrey; Albanese, Chiara
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: Russia's ruble Tuesday sank to its lowest levels since a run on the currency mid-December, wounded by a fresh and rising fears that the central bank's emergency measures to rescue the currency last month aren't enough to staunch the crisis. New selling pressure is possible before the end of the week, traders say, when Russian government officials are expecting rating firm Standard & Poor's to downgrade Russia's status to junk. Having intervened repeatedly and raised the key interest rate to an already punishingly high 17 percent, analysts say the Russian government has few market mechanisms left to buttress the currency. Last month, the government issued an informal mandate to exporters to buy rubles with their cash proceeds to . Now analysts say such purchases could be made a requirement. More draconian measures are being discussed. With oil expected to fall further, "it's imperative for the central bank to maintain confidence in the ruble among households," said Per Hammarlund at SEB in London. Officials are already divided over whether to , Russia's former finance minister, Alexei Kudrin, told a Russian newspaper earlier this week. Since the ruble began sliding this fall, the government has repeatedly denied that it plans such measures. Both the Russian government and analysts say the ruble's fall is unavoidable, because it is largely tracking the downward trajectory in oil, Russia's main export, which was down 4% Tuesday, with international oil benchmark Brent trading at a nearly six-year low of $45.50 per barrel. The ruble has fallen nearly 15% since the beginning of the year and hovered Tuesday at 65.6 against the dollar and at 77.2 against the euro near the end of trading in Moscow. "The ruble is catching up now with the oil prices which went substantially lower during Russia's long holidays," said Denis Korshilov, head of fixed income, currencies and commodities at Citi in Moscow. "There is no reason for the Bank of Russia to play against the oil trend at the moment." With the fall in oil and economic sanctions, Russia's central bank is predicting an economic contraction of up to 5% this year. But analysts are more pessimistic, in December Moody's rating agency predicted shrinkage of 5.5%. Oil's fall has steepened lately--it is down 20% since the beginning of the year--and that fall will drag Russia "even deeper into recession," said Bernd Berg, emerging-market strategist with Société Générale. Piotr Matys, rates strategist at Rabobank, said that with inflation accelerating in the coming months, the central bank will be unable to lower interest rates to stimulate economic growth. A wave of bankruptcies seems inevitable in the coming months, which will put pressure on Russian banks, he said. A looming problem for the Russian central bank is controlling the fall so that ordinary Russians don't lose confidence in the currency. So far, there was no jump in demand for foreign cash akin to last month as those who wanted to buy into dollars or euros have already done it before, said Pavel Stukanov, deputy head of the exchange department at midsize Moscow-based Lanta Bank. In March, when Moscow annexed Ukraine's regions of Crimea and the first round of sanctions followed, households were one of the key drivers behind the ruble's weakness. The Central Bank of Russia spent nearly $80 billion defending the ruble last year, so its reserves fell below $400 billion for the first time since 2009. Russia's finance ministry spent another $1.3 billion over Russia's 11-day New Year holidays, the central bank data showed Tuesday. But with analysts predicting a further drop in Brent crude prices to $40 per barrel, the ruble could weaken to around 70-75 against the dollar, said SEB's Mr. Hammarlund. He expects the central bank to impose formal requirements on exporters to repatriate dollar earning and broader steps affecting the Russian populace could follow. "A likely second step will be to limit the amount that households can exchange," he said. "A third step will be to increase the reserve requirements on banks' open FX positions." Concerns about sovereign rating downgrade also weigh on the Russian market. A cut to Russia's rating below investment grade is set to spark another selloff in the ruble, traders said. Paul Rawkins, head of the emerging Europe sovereign ratings group at Fitch Ratings, said Tuesday that another spike in the ruble volatility, sustained low oil prices, faster depletion of the Russia's reserves and new sanctions are all factors that suggest a downgrade. Fitch cut its credit ratings on Russia to the brink of junk late last week, saying the country's economic outlook has deteriorated significantly in the past six months amid sharp declines in oil prices and the ruble. Write to Andrey Ostroukh at and Chiara Albanese at Credit: Andrey Ostroukh, Chiara Albanese
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644693798
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644693798?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Copper Prices Lowest Since August 2009; Plunge in Oil Prices, Soaring Dollar Send Investors Fleeing From Commodities
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: Copper prices fell to a fresh five-year low on Tuesday, as investors fled from commodities in the wake of a continued drop in oil prices and a soaring dollar. Copper for March delivery, the most actively traded contract, was recently down 2.9% at $2.6475 a pound on the Comex division of the New York Mercantile Exchange. It was the steepest drop for copper since Nov. 28 and the lowest price since August 2009. , bringing their year-to-date decline to 20% after the United Arab Emirates' oil minister said the Organization of the Petroleum Exporting Countries would stand firm on its decision to keep output unchanged. "Because of the drop in oil, there is just a general avoidance of raw materials on the part of investors," said Bart Melek, head of commodities at TD Securities. "This is probably an overreaction. It's too early to say the world is falling apart." Falling oil prices also reduce mining companies' energy costs, giving the producers an incentive to continue mining the metal, even as demand drops, analysts said. The oil market's influence on copper overwhelmed. The data showed imports from the world's biggest copper consumer hit an all-time high last year. "The data was pretty good, but that's not what investors are focusing on right now," Mr. Melek said. A stronger dollar also hurt copper, which is priced in the U.S. currency and becomes more expensive to foreign buyers when the buck rises. The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was recently up 0.3% at 84.17, near the highest level in more than 11½ years. Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644732089
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644732089?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Markets Report: Oil Dips Below $45/Barrel
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: The slide in oil prices continued, with crude futures falling 3.2% to $44.49 a barrel. WSJ's Dan Strumpf reports on the News Hub with Simon Constable.
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Mobile
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644732154
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644732154?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Moody's Cuts Ratings on Venezuela Deeper Into Junk; Credit Rater Points to Increased Risk of Default Amid Lower Oil Prices
Author: Calia, Michael
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
[...]the firm said it could see positive action if the prospects improve for the country's balance of payments in light of a strong oil recovery, or if a big increase in financing ensures that external accounts will be stabilized.
Full text: Moody's Investors Service lowered its ratings on Venezuela deeper into junk territory, saying the risk of default has increased substantially thanks to the sharp decline in oil prices. The firm lowered the country's ratings two notches to Caa-3 from Caa-1. Moody's said its stable outlook on the rating is based on the view that expected losses for Venezuela's bond holders aren't likely to fall to levels usually related to lower ratings even if oil prices suffer further declines. The firm said the recent rapid fall in oil prices has led to a "marked increase" in Venezuela's risk of default. The slide is pressuring the country's balance of payments and its foreign reserves, which Moody's described as "dwindling." Oil prices have fallen more than 50% from the summer. Moody's said bond holders' losses are likely to exceed 50% if Venezuela goes into default. The firm said it believes that the country's balance of payments outflows will likely surpass inflows by a "significant margin through at least 2016." This would lead to a large external funding gap, suggesting that a material cut in debt would be necessary to make sure the payments balance is sustainable. The rating could face more pressure if Venezuela's external finances get weaker in the absence of an oil-price recovery, Moody's said. Likewise, the firm said it could see positive action if the prospects improve for the country's balance of payments in light of a strong oil recovery, or if a big increase in financing ensures that external accounts will be stabilized. Write to Michael Calia at Credit: By Michael Calia
Subject: Balance of payments; Petroleum industry; Prices; Oil recovery
Location: Venezuela
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644747321
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644747321?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheap Oil Could Mean Shrinking Profits for BASF; Oil-And-Gas Unit Wintershall's Earnings Getting Squeezed by Dropping Oil Prices
Author: Alessi, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
[...]of continued obstacles in Europe, including high energy costs in Germany due to the country's shift to renewables, and increasingly strict European energy efficiency standards, the company has been looking to expand its presence in the U.S. BASF is planning to jointly build with Norwegian chemical company Yara International ASA an ammonia plant at an existing site in Freeport, Texas.\n
Full text: FRANKFURT--Plunging oil prices are a boon for many chemical companies because their basic ingredient and main fuel come from petroleum. But for Germany's BASF SE, the world's largest chemical company, cheap oil could mean shrinking profits. That's because BASF owns an oil-and-gas unit, Wintershall AG, which generates roughly 30% of the group's cash flow. The division offers BASF a strategic hedge when oil prices are high. Sales of Wintershall's oil and gas roughly equal its parent company's need for energy and raw material, according to calculations by Peter Spengler, an analyst at DZ Bank. But with Brent by half in 2014 and already down 17% this year, Wintershall's earnings are getting squeezed. That, in turn, hurts the whole company. "The oil price is a short term negative for BASF because they lose margin in the oil and gas business," said Mr. Spengler. He added that a lower oil price could indicate a drop in global economic activity, which "would affect [BASF's] core chemicals business." Every 10% fall in the oil price reduces BASF group earnings by 2% to 3%, according to an estimate by analysts at Credit Suisse. A shift up or down in the annual price of Brent crude by $1 per barrel impacts earnings before interest and taxes in BASF's oil and gas division by 15 million euros, said BASF spokeswoman Jennifer Moore-Braun. Even BASF's core chemicals business can be temporarily hurt by low oil prices, if there is volatility in the market, Ms. Moore-Braun added. That's because customers tend not to order chemicals in large amounts during times of uncertainty. The declining oil price has also hurt BASF's stock price, which has fallen by as much as 12% from [euro]75.21 in late November just before the Organization of the Petroleum Exporting Countries decided . Brent, a global oil benchmark, dropped on Monday to below $50 per barrel for the first time in nearly six years and continued downward on Tuesday. BASF's oil-and-gas division also took a hit late last year when it called off a long-planned with Russian state gas group OAO Gazprom amid ongoing political tensions between Russia and the West over Russian intervention in Ukraine. Wintershall had planned to exchange its gas trading and storage operations for access to Gazprom's natural gas fields in Siberia. BASF said the collapse of the deal means it now expects only "slightly higher" earnings before interest and taxes for 2014 compared with the year earlier, rather than the "considerable rise" the company previously forecast. BASF will post its fourth-quarter and full-year financial results on Feb. 27. Shortly after the asset swap fell apart, Wintershall sold to Gazprom for an undisclosed sum its 15% share in Gazprom's South Stream pipeline project, which would have been used to supply natural gas from Russia to Europe via Bulgaria. Russian President Vladimir Putin scrapped the project in early December due to growing opposition from European leaders. BASF's chemical business has also come under pressure, hurt by weakening European demand for chemicals and a slowing global economy. In October, the company , saying it expected earnings before interest, taxes, depreciation and amortization for 2015 of between [euro]10 billion and [euro]12 billion, down from an initial estimate of [euro]14 billion. As a result of continued obstacles in Europe, including high energy costs in Germany due to the country's shift to renewables, and increasingly strict European energy efficiency standards, the company has been looking to expand its presence in the U.S. BASF is planning to jointly build with Norwegian chemical company Yara International ASA an ammonia plant at an existing site in Freeport, Texas. The company also announced last year its intention to take advantage of the U.S. shale gas boom by building a new plant on the U.S. Gulf Coast for the conversion of natural gas into propylene. The company had previously indicated it could announce a deal by early this year, and said on Tuesday that the investment is still on track. Write to Christopher Alessi at Credit: By Christopher Alessi
Subject: Chemical industry; Petroleum industry; Chemicals; Energy economics; Natural gas; Crude oil prices
Location: Germany
Company / organization: Name: BASF SE; NAICS: 551112, 325320, 325412, 325620, 325998; Name: OAO Gazprom; NAICS: 211111, 221210; Name: Credit Suisse Group; NAICS: 522110; Name: Wintershall AG; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644751068
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644751068?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Hits 2½-Month High as Fed Worries Ease; Oil Prices' Continued Decline Seen Keeping Inflation Down, Staying the Fed's Hand
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Global oil prices fell further Tuesday, bringing their year-to-date decline to 20%, after the United Arab Emirates's oil minister said the Organization of the Petroleum Exporting Countries would stand firm on its decision to keep output unchanged.
Full text: Gold prices hit their highest level in 2½ months on Tuesday, as investors grew concerned that a shaky global economy would stymie the Federal Reserve's plans to raise U.S. interest rates later this year. Gold for February delivery, the most actively traded contract, closed up $1.60, or 0.1%, at $1,234.40 a troy ounce, the highest settlement since Oct. 22 on the Comex division of the New York Mercantile Exchange. Tuesday, bringing their year-to-date decline to 19%, after the United Arab Emirates's oil minister said the Organization of the Petroleum Exporting Countries on its decision to keep output unchanged. Some investors believe the drop in oil prices will hurt the finances of energy-exporting countries such as Russia, and further weaken an already shaky global economy. Others worry that depressed oil prices will keep inflation in the U.S. at current low levels, another factor that could . The concerns are good news for gold, which attracts buying during turbulent times, as some investors believe the metal will hold its value better than other assets amid political or economic uncertainty. A delay in raising interest rates also benefits gold, which struggles to compete with yield-bearing assets when monetary policy tightens. "Clearly, gold and silver are in increased demand as safe havens at present in view of the slump in oil prices and the losses suffered by base metals," analysts at Commerzbank wrote in a note to clients. "Some market players appear to be assuming that the U.S. Federal Reserve will increase interest rates later and to a lesser extent than previously anticipated." Silver for March closed up 3.6% at $17.156 a troy ounce, its biggest one-day percentage gain in a month. The April platinum contract ended up 0.6% at $1,247.80 a troy ounce, the highest close since Oct. 29. Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Subject: Gold markets; Petroleum industry; Interest rates
Location: Russia United States--US United Arab Emirates
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644751075
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644751075?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
EIA: Global Oil Supply to Outpace Demand in 2015; Government Agency Sees Brent Crude Averaging $57.58 a Barrel in 2015, $75 in 2016
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
The U.S. Energy Information Administration, in its monthly short-term energy outlook released Tuesday, called for benchmark U.S. crude-oil prices to average $54.58 a barrel this year, down from $93.26 a barrel in 2014.
Full text: NEW YORK--Government forecasters expect oil prices to stay subdued through 2016 as global supplies exceed demand. The U.S. Energy Information Administration, in its monthly short-term energy outlook released Tuesday, called for benchmark U.S. crude-oil prices to average $54.58 a barrel this year, down from $93.26 a barrel in 2014. In December, the agency said U.S. prices would average $62.75 this year. The agency released estimates for 2016 for the first time. Next year, the agency expects U.S. prices to average $71 a barrel. For Brent, the global benchmark, the EIA expects prices to average $57.58 a barrel in 2015 and $75 a barrel in 2016, down from $99.02 a barrel last year. In December, the agency called for a price average of $68.08 a barrel this year. Oil pricesin recent months on concerns about a global glut of oil. Front-month U.S. futures prices are currently trading around $45 a barrel, while Brent prices are near $46 a barrel. "EIA expects global oil inventories to continue to build in 2015, keeping downward pressure on oil prices," the agency said in the report. The agency expects prices to average $46 a barrel for the U.S. benchmark and $49 a barrel for Brent in January and February before rising through the rest of the year. The EIA expects globalto exceed demand this year and next. The agency expects international supplies to average 92.97 million barrels a day in 2015, while consumption is projected to average 92.39 million barrels a day. In 2016, the EIA expects oil supplies of 93.51 million barrels a day and consumption of 93.42 million barrels a day. In the U.S., production hit 9.15 million barrels a day in December, the highest monthly level since February 1986, the EIA said. Some U.S. producers have cut spending on production because of lower oil prices, but U.S. output is still expected to grow. U.S. production has boomed in recent years as new technologies have enabled producers to access supplies trapped in shale-oil fields. The EIA called for total U.S. crude production to rise from 8.67 million barrels a day in 2014 to 9.31 million barrels a day in 2015 and 9.53 million barrels a day in 2016. The forecast 2016 production would represent the highest level of annual average oil production since it peaked in 1970, the EIA said. Consumption is also forecast to rise. The EIA called for U.S. oil consumption to average 19.32 million barrels a day this year, up from 19.06 million barrels a day last year, and 19.43 million barrels a day next year. The agency cut its forecast forfor regular grade gasoline, including taxes, this year from $2.60 a gallon to $2.33 a gallon. In 2016, the agency expects prices to average $2.72 a gallon. The average U.S. household$750 less on gasoline this year than last year, the agency said. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Prices; Petroleum production
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644768201
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644768201?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Hungarian Imports of Russian Diesel Fuel Via Ukraine Disrupted; Oil and Gas Company MOL Says Pipeline Flow Affected, But Crude Oil Imports Not Impacted
Author: Gulyas, Veronika
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Hungary's supplies of Russian gas have been disrupted in the past, although diesel fuel and crude imports have been arriving regularly.
Full text: BUDAPEST--Hungarian oil and gas company MOL Nyrt said on Tuesday that it has experienced disruptions in the supply of diesel fuel flowing through a pipeline from Russia via Ukraine. The company, which replied by email to questions posed by The Wall Street Journal, didn't disclose the nature of the disruption. MOL said only that its "Russian partner fulfills its long-term contractual obligations." Ownership of the diesel pipeline, however, has been in dispute between Ukraine and Moscow, as Kiev considers the Russian pipeline as Ukrainian property, a source close to the matter outside MOL said. MOL also imports crude oil from Russia via Ukraine, but the company said it hasn't suffered disruptions so far and "hoped there won't be any in the future." MOL also said its refineries could be supplied with crude oil via an Adriatic pipeline, if necessary. Energy issues have been in the forefront in the bitter conflict between Russia and Ukraine. Russia supplies Ukraine with the bulk of its energy needs and uses the country as a pipeline transport route to Western Europe. Hungary, Ukraine's western neighbor, has been especially exposed to the conflict because of its dependence on Russian energy resources. Hungary's supplies of Russian gas have been disrupted in the past, although diesel fuel and crude imports have been arriving regularly. Under its contracts, MOL receives 80,000 metric tons of diesel a month from Russia via the Ukraine pipeline. The company didn't say how much less diesel it been receiving because of the disruptions. "We hope that the contractual volume will be transmitted in the future," MOL said. Write to Veronika Gulyas at Credit: By Veronika Gulyas
Subject: Pipelines; Petroleum industry; Diesel fuels
Location: Hungary Russia Ukraine
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644787280
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644787280?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World Bank Lowers Outlook for Global Economic Growth; Bank Says Stronger U.S. Economy and Plummeting Oil Prices Don't Offset Trouble in Eurozone and Emerging Markets
Author: Talley, Ian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Growth in Kazakhstan, another major oil exporter and a country that relies heavily on remittances from Kazakhs working in Russia, was cut 4.1 percentage points to 1.8%. Besides the U.S., one of the few bright spots in the global outlook was a slight upgrade in the growth forecast for India to 6.4%.\n
Full text: The World Bank cut its outlook for global growth Tuesday, saying a strengthening U.S. economy and plummeting oil prices won't be enough to offset deepening trouble in the eurozone and emerging markets. The Washington-based development institution expects the global economy to expand 3% this year, up from 2.6% in 2014, but still slower than its earlier 2015 forecast of 3.4%. The bank's economists see oil prices, which have lost more than half their value in the last six months, providing uneven benefits to major oil importers. The tumble in oil has bolstered the U.S. recovery by giving consumers more money to spend, leading the bank to revise up its growth projection for the world's largest economy by 0.2 percentage point to 3.2%. But the price plunge is failing to spur stronger growth in importers such as Europe and Japan, while also exacerbating financial problems in major oil exporters. Kaushik Basu, the World Bank's chief economist, said the global economy is being pulled by a single engine--the U.S. economy. "This does not make for a rosy outlook for the world," he said. "It is really not enough." The eurozone is struggling to avert a third recession since the financial crisis as the currency union grapples with high debt and a lack of international competitiveness. The bank cut its outlook for growth in the region by 0.7 percentage point to 1.1% this year. Growth in emerging markets, the leading drivers of the global recovery after the 2008 crisis, is slowing more than expected. Many of those economies, already straining their capacity to grow without major economic overhauls, are being hit by a raft of economic and political headwinds. The bank cut its forecast for all developing economies by more than half a percentage point to 4.8%. Borrowing costs are set to rise in emerging economies as the Fed moves toward its first rate increase since 2006, worrying investors about the ability of many emerging-market governments and companies to pay their debt obligations. Their currencies are weakening as investors focus on a healthier U.S. recovery amid slowing emerging-market growth. And many governments haven't been able revive potential growth through economic restructuring. The development institution cut its outlook for the world's second-largest economy, China, to 7.1% for the year, down from its last forecast for growth of 7.5%. China is trying to manage a shift away from credit-fueled, export-led growth to a greater reliance on domestic consumption. It is a delicate transition as Beijing tries to avoid a precipitous slowdown or an unexpected bursting of a credit bubble. China is widely expected to reduce its own growth rate target for the year to around 7%. Other emerging economies also are struggling. The bank slashed its forecast for Brazil's economic growth by nearly two percentage points to 1% amid falling commodity prices, weak demand from major trading partners and growing investor anxieties. Russia is heading into a deep recession. The bank estimates the economy will contract by 2.9% this year as the oil exporter faces tumbling crude oil prices and Western sanctions for its role in eastern Ukraine. Russia's crisis also is bleeding into neighboring states. Growth in Kazakhstan, another major oil exporter and a country that relies heavily on remittances from Kazakhs working in Russia, was cut 4.1 percentage points to 1.8%. Besides the U.S., one of the few bright spots in the global outlook was a slight upgrade in the growth forecast for India to 6.4%. The central bank has helped stabilize the rupee and the government in New Delhi is moving ahead with economic overhauls, giving investors confidence about the country's future growth potential. But the bank said the overall weakness in the global economy is likely to prompt the U.S. Federal Reserve to delay an expected rate increase. Markets currently expect the Fed to act in the middle of the year. Still, the bank warned that global growth prospects could dim further. Trade growth could remain sluggish for longer than expected, especially if the eurozone's troubles and Japan's stagnation turn into prolonged recessions. If the Fed rates faster than expected, higher borrowing costs could spark another bout of capital flows out of emerging markets and fuel new debt and currency problems. And a sharper slowdown in China could trigger a financial turmoil in the country, which would have "considerable implications for the global economy," the bank said. "Worryingly, the weak recovery in many high-income economies and slowdowns in several large emerging markets may be a symptom of deeper structural weaknesses," said Mr. Basu, the bank's chief economist, said. Write to Ian Talley at Credit: By Ian Talley
Subject: Economic conditions; Recessions; Crude oil prices; Eurozone; Economic growth
Location: China United States--US
People: Basu, Kaushik
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York , N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644803191
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644803191?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of cop yright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Central Banker Says Oil Slide Poses Risks for Canada; Bank of Canada Official Says 'However Things Play Out, We Have the Tools to Respond'
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Despite tempering effects such as a boost to consumer incomes from cheaper gasoline prices, and reduced production costs for manufacturers,are "likely, on the whole, to be bad for Canada," Bank of Canada Deputy Governor Tim Lane said according to a text of a speech to a business audience in Madison, Wis.
Full text: OTTAWA--Sliding oil prices will likely pose significant risks to Canada's, and may delay its economy's return to full capacity, a senior central banker said Tuesday. Despite tempering effects such as a boost to consumer incomes from cheaper gasoline prices, and reduced production costs for manufacturers,are "likely, on the whole, to be bad for Canada," Bank of Canada Deputy Governor Tim Lane said according to a text of a speech to a business audience in Madison, Wis. Mr. Lane saidcould fall further or remain low for a significant period, and as a result the central bank "will closely monitor its broader impacts on growth and the delay it may cause to the economy's return to its production potential." Canada is a net exporter of crude oil, which makes up about 14% of its shipments and about 3% of the country's gross domestic product. Almost all of the oil is exported to its biggest trading partner, the U.S. Bank of Canada officials and other Canadianhave been hoping for a rotation in demand away from debt-ridden Canadian consumers and toward exports and business investment, which they see as key to driving economic growth. The central bank is studying the impact of the oil swoon on emerging signs of that rotation, Mr. Lane said. Disappointing trade figures in November stemming from the oil slide suggest it make take longer for such a shift to emerge. And Mr. Lane said persistent low oil prices will "significantly discourage" investment and exploration in the energy sector, noting that there are already signs of this happening. "However things play out, we have the tools to respond," he said. The Bank of Canada sets monetary policy to achieve inflation of about 2%. Mr. Lane didn't quantify any impact the oil-price drop may have on Canada's economy. His speech came just over a week before the Bank of Canada releases its latest quarterly economic projections along with its first rate decision of the year on Jan. 21. Many economists expect the central bank to cut its growth and inflation forecasts, and predict it will delay raising interest rates. A small but increasing number of economists predict the Bank will remain on the sidelines until 2016, well after the U.S. Federal Reserve starts raising rates. The oil swoon in recent months has weighed on driving it down by more than 10% against the greenback in the last six months. The currency's depreciation, along with firming growth in the U.S., has boosted Canada's nonenergy shipments, Mr. Lane said. A lower Canadian dollar makes the country's exports cheaper abroad. Investment spending and job creation have also begun to pick up but "significant slack remains in the labor market," he added. Write to Nirmala Menon at Credit: By Nirmala Menon
Subject: Central banks; Monetary policy; Prices; Economic growth; Gross Domestic Product--GDP
Location: Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language ofpublication: English
Document type: News
ProQuest document ID: 1644803207
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644803207?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
CSX Profit Rises 15% on Strong Demand; Freight-Rail Operators Expected to Post Strong Results Despite Drop in Oil Prices
Author: Stynes, Tess
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
Union Pacific Corp., Kansas City Southern and Norfolk Southern Corp. plan to release their fourth-quarter results in coming weeks.
Full text: CSX Corp. said its fourth-quarter earnings rose 15% as the freight railroad operator continued to benefit from strong freight demand. The Jacksonville, Fla., company is the first big U.S. railroad to report results for the latest quarter. Analysts have been expecting nearly all freight-rail companies to post strong results despite a steep decline in prices for crude oil--one of the fasting growing parts of the rail business. Booming shale production has led to a surge in crude shipped by rail, which has increased demand but also snarled railroad traffic and raised questions about how to improve safety. Looking ahead, along with new pipelines coming online, crude-rail shipments may face increased competition from truckers as falling fuel prices diminish the price advantage of trains over trucks. Overall, CSX reported a profit of $491 million, or 49 cents a share, up from $426 million, or 42 cents a share, a year earlier. Revenue increased 5.3% to $3.19 billion. Analysts polled by Thomson Reuters expected per-share profit of 49 cents and revenue of $3.18 billion. Total shipment volume grew 6.1% and average revenue per unit improved by 5.35. Coal volume, increased 11% led by 22% growth in shipments of coal used by domestic utilities replenishing stockpiles and market gain. Intermodal shipments, which involve the movement of freight by several modes of transportation, rose 5% led by growth in domestic volume. Total merchandise volume, which includes agricultural, industrial and housing and construction shipments, increased 5.2%. CSX affirmed its 2015 financial projections for double-digit earnings growth and stronger margins. Union Pacific Corp., Kansas City Southern and Norfolk Southern Corp. plan to release their fourth-quarter results in coming weeks. Write to Tess Stynes at Credit: By Tess Stynes
Subject: Profits; Railroads; Financial performance; Shipments
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Union Pacific Corp; NAICS: 482111, 484121, 486110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644824306
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644824306?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Suncor Cuts Capital Spending Due to Low Oil Prices; Energy Company Will Continue Oil-Sands Projects Now Under Construction
Author: King, Carolyn; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
The Bank of Nova Scotia estimates brand new oil-sands well-drilling projects break even at $65 a barrel and new surface mines break even at $90 a barrel, which is nearly double the current spot market price for oil.
Full text: Suncor Energy Inc. said it would cut its 2015 capital-spending program by 1 billion Canadian dollars ($837 million) in response to , but said it would move forward with major oil-sands and other expansion projects currently under construction. The top oil-sands producer joined a growing list of Canadian energy companies that have scaled back their spending plans on new projects even as they expect to continue to increase production from existing operations. The Calgary-based company now plans to spend up to C$6.8 billion on capital projects this year--the same amount as in 2014--not up to the C$7.8 billion it had announced in November. Suncor also plans to cut operating expenses by C$600 million to C$800 million over the next two years. It said projects under way such as the C$13.5 billion Fort Hills oil-sands mine in Alberta and the Hebron oil field off Canada's east coast, will move forward as planned and take full advantage of the current economic environment. These long-term growth projects are expected to come online in late 2017. "Today's spending reductions are consistent with our commitment to spend within our means and maintain a strong balance sheet. We will monitor the pricing environment and take further action as required," Chief Executive Steve Williams said. Suncor's guidance for production this year of 540,000 to 585,000 barrels of oil equivalent a day remains unchanged. That is above the 525,000 to 570,000 barrels of oil equivalent it planned to produce in 2014. The company has said its average production costs are just $30 per barrel from its existing operations. On Tuesday, the global benchmark Brent crude for February delivery fell 84 cents, or 1.8%, to $46.59 a barrel on ICE Futures Europe, the lowest settlement since March 2009. Canadian Natural Resources Ltd., another major oil-sands producer, said Monday that it would trim its 2015 spending budget by C$2.4 billion to C$6.2 billion, citing the recent drop in oil price. That followed a decision Friday by the Canadian unit of Royal Dutch Shell PLC to cut as much as 10% of its oil sands workforce. Suncor said Tuesday it planned to eliminate about 1,000 jobs this year, mainly contract workers, and push back construction of projects it hadn't yet green-lighted, such as the MacKay River 2 oil-sands project and the White Rose offshore oil field extension. The Bank of Nova Scotia estimates brand new oil-sands well-drilling projects break even at $65 a barrel and new surface mines break even at $90 a barrel, which is nearly double the current spot market price for oil. Suncor said it would push ahead with its Fort Hills mine, the largest single investment in an oil-sands project ever. Announced in 2013, it is expected to produce 180,000 barrels a day of oil after starting up in 2017 and have a mine life of more than 50 years. Suncor has a 40.8% stake in the project, along with partners Total SA, which owns 39.2%, and Canadian diversified miner Teck Resources Ltd., with a 20% share. Write to Carolyn King at and Chester Dawson at Credit: By Carolyn King and Chester Dawson
Subject: Petroleum industry; Oil reserves; Energy economics
Location: Canada
Company / organization: Name: Canadian Natural Resources Ltd; NAICS: 211111, 213112; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644839683
Document URL: https://login.ezproxy.uta.edu/login?url=https://search.pr oquest.com/docview/1644839683?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Builders Brace for a Slowdown in Texas; Falling Price of Oil Is Expected to Affect Home Construction
Author: Hudson, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
According to RBC Capital Markets, Texas accounted for 25% of D.R. Horton Inc.\n
Full text: Texas has long served as a key driver of new-home sales. But falling oil prices could put the brakes on home buying in the state. That's bad news for many of the nation's large, publicly traded home builders, some of which count on Texas for upward of 30% of their annual sales, according to Barclays. "We expect that layoffs and the ripple effect on [oil-field] support services will have a decidedly negative impact on housing demand in Texas," RBC analyst Robert Wetenhall wrote in a research note distributed Monday. He anticipates a 5% decline this year in the number of single-family homes for which construction is started in Texas. Deutsche Bank Securities analyst Nishu Sood predicts a 14% decline in Texas's home starts this year. But on a national level, Mr. Sood and others believe any slowdown in Texas will be offset by gains elsewhere stemming from continued job and wage growth, lower prices at the gas pump and slowly easing mortgage-qualification standards. "The reduction in oil prices shifts the relative fortunes of Texas versus the rest of the market," Mr. Sood said. "But, overall, we're modeling it to be more of a neutral event on a national level." Stock prices support that view; the Dow Jones U.S. Home Construction Index of six home-builder stocks have gained 3.4% since oil prices started declining last July. So far, big builders have said publicly that they haven't noticed a drop-off in Texas sales, although they are bracing for changes. "We're seeing no indication of any pullback from the consumer" in Houston, said Jeffrey Mezger, president and chief executive of KB Home, during a conference call Tuesday to discuss the builder's fourth-quarter results, which included a 9.6% increase in orders nationally from a year earlier. Nevertheless, he said, "We're sensitive to the Houston situation. We actually pulled out of a couple of land transactions in the fourth quarter due to our sensitivity there." Texas accounted for 23% of KB Home's revenue last year and 35% of its communities under construction. Investors focused on a different angle Tuesday, punishing KB Home for its 0.6-percentage-point decline in gross profit margin in the fourth quarter from a year earlier and its weaker-than-expected outlook for 2015 margins. KB Home blamed the results on higher costs, soft sales in some California regions and its increased use of sales incentives. KB Home's stock closed at $13.87 on Tuesday, down $2.70, or 16%, in the stock's worst one-day percentage decline since 1992. Sheryl Palmer, CEO of Taylor Morrison Home Corp., which Deutsche Bank Securities estimates has 38% of its portfolio in Texas, said the oil-price swoon "inevitably" will result in layoffs in Texas this year. Roughly 2.5% of the state's jobs in 2013 and 8.7% of its inflation-adjusted economic output in 2012 were tied to oil and gas extraction and support. Several exploration and extraction firms are cutting back, and the proposed merger of Houston-based oil-field-services giants Halliburton Co. and Baker Hughes Inc. likely will eliminate jobs. While Ms. Palmer anticipates a slowdown in Texas, she doesn't expect a reversal. "Our traffic continues to be strong, and we're still seeing very healthy sales" in Houston, she said on a Dec. 16 conference call with investors. "I think a change will really depend on the length of the decline in [oil] prices. I think also Houston has enough momentum going into 2015 to still recognize growth, albeit probably at a little bit slower pace." It is difficult to overstate Texas's importance to home builders. According to RBC Capital Markets, Texas accounted for 25% of D.R. Horton Inc.'s completed home sales last year, 23% at Lennar Corp. and 21% at PulteGroup Inc. Smaller public builders, including LGI Homes Inc. (53%), have large portions of their portfolios in Texas, according to Deutsche Bank Securities. D.R. Horton, Lennar, Pulte and LGI declined to comment, citing impending quarterly earnings reports. Texas accounted for 16% of U.S. building permits for single-family homes in the first 11 months of last year, according to J.P. Morgan Chase & Co. The state placed three metro areas in the top 10 nationally for residential-construction permits in that period, with Houston the runaway leader at 57,210, Dallas third at 36,342, and Austin eighth at 18,952, Commerce Department data show. Write to Kris Hudson at kris.hudson@wsj.com Credit: By Kris Hudson
Subject: Home building; Prices; Investments
Location: Texas
Company / organization: Name: KB Home; NAICS: 551112, 236115, 237210; Name: Deutsche Bank Securities; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644840182
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644840182?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Railroads Steam Toward Big Gains; Outlook Is Bright, but Oil's Dive Raises Prospect of Stiffer Truck Competition; CSX Earnings Rise
Author: Stevens, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract:
While the growth of crude-by-rail transport could start slowing by midyear as cheaper pipelines become available, Wall Street expects most railroads to post double-digit 2015 earnings-per-share growth as they raise prices and improve service.
Full text: How are plunging crude-oil prices affecting railroads? That's the crucial question as big North American freight railroads begin to report their fourth-quarter earnings, with CSX Corp. posting a 15% rise in profit on Tuesday. The answer isn't what one might guess. Despite a drop since mid-June of more than 50% in the price of crude oil--one of the fastest-growing parts of the rail business--analysts expect nearly all railroads to post strong fourth-quarter profit gains. While the growth of crude-by-rail transport could start slowing by midyear as cheaper pipelines become available, Wall Street expects most railroads to post double-digit 2015 earnings-per-share growth as they raise prices and improve service. No, the big problem for rail won't be lost oil revenue, it will be from trucks. Lower fuel prices will trim the price advantage trains have had over trucks in recent years, an edge that has helped railroads steal share from the highways. Shippers planned an accelerated shift to rail from road in recent years, according to Wolfe Research, as fuel prices rose and railroads touted fuel efficiency four times that of trucks. Now diesel prices have fallen nearly 20% since the end of the third quarter. A Wolfe Research fourth-quarter survey found that in the previous six months, shippers were switching to truck transport at a higher rate than to rail, for the first time since 2010. Railroads are still expected to record a net gain of about 1.2% of truck shipments in the next six to 12 months, the survey found, but it would be the slowest gain in market share in four years. Wolfe estimates highway trucking generates about $200 billion in revenue, versus railroad's domestic intermodal market of about $10 billion. The switch to highways could accelerate in the first quarter, a time when the trucking industry typically has more capacity, said Jason Seidl, an analyst with Cowen and Co. There will be limits: Most shippers are bound by long-term contracts, and the trucking industry is still grappling with a driver shortage that has restricted its capacity. "You can't move all your business to the highway, but--to the extent that they can--I think they will," Mr. Seidl said. Some railroads didn't agree with the assessment. "We don't see customers looking to put rail traffic back on truck," said Donald W. Seale, Norfolk Southern Corp.'s chief marketing officer, during a December presentation. In the near term, it is coal shipments, not oil, that are likely to weigh on the rails, especially at CSX, Union Pacific Corp. and Norfolk Southern, where the coal business makes up about 20% of revenues, according to BB&T Capital Markets. Coal use typically drops when natural-gas prices fall below the $3 mark, as some power plants switch to the cheaper option. Natural gas for February delivery settled at $2.943 a million British thermal units in New York on Tuesday. "When you start getting natural-gas prices below $3, it can start impacting multiple coal basins, which affects all railroads to some degree," said Mark Levin, a BB&T Capital analyst. "It could have a material impact on coal burn." Morgan Stanley in recent days reduced full-year earnings estimates for a number of railroads, citing coal concerns. It lowered 2015 full-year earnings-per-share guidance by seven cents to $2.25 for CSX; and by 10 cents for both Norfolk Southern and Union Pacific, to $6.70 each. Railroads have become an important part of the emerging U.S. energy sector in states such as and Montana, transporting crude oil by from the Bakken Shale to market, in addition to drilling materials for oil and natural-gas fracking. For railroads, the business has been fast-growing--with volumes on average running about 11% higher in the first three quarters of last year compared with the end of 2013, according to Sanford C. Bernstein & Co. But crude-by-rail shipments and the transport of drilling supplies generates only about 5% of total revenue for the sector, according to Barclays, and crude-oil carloads represent less than 2% of all major railroad traffic, according to Morgan Stanley. Even the most affected railroads--such as Canadian Pacific Railway Ltd.--are limited to about 10% of total revenue exposure. Even sooner than crude-by-rail, shipments of drilling supplies such as fracking sand could drop 10%, according to Bernstein. That is a bigger business area for some railroads, the analysts add, making up an estimated 6% of total revenue at Union Pacific, for example. CSX said its fourth-quarter profit rose to $491 million, or 49 cents a share, from $426 million, or 42 cents a share, a year earlier. Revenue increased 5.3% to $3.19 billion. The earnings-per-share results matched the expectations of analysts surveyed by Thomson Reuters. The analysts had expected revenue of $3.18 billion. Tess Stynes contributed to this article. Write to Laura Stevens at Credit: By Laura Stevens
Subject: Profits; Railroads; Financial performance; Prices; Trucks; Roads & highways; Natural gas; Coal
Company / organization: Name: Norfolk Southern Corp; NAICS: 482111; Name: Union Pacific Corp; NAICS: 482111, 484121, 486110, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644840475
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644840475?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Petrobras Finds Executive to Head Newly Created Compliance Division; Oil Company, in the Midst of a Corruption Scandal, to Hire João Adalberto Elek
Author: Kiernan, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Jan 2015: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazilian state-controlled oil firm Petróleo Brasileiro SA said Tuesday it has found an executive to head a newly created compliance division, ending a nearly two-month search amid the worst corruption scandal in the company's history. Petrobras said it would hire "in the coming days" João Adalberto Elek to fill the position of governance, risk management and compliance officer. Mr. Elek, whose career has included executive-level stints at multinationals including AT&T and Citibank, will serve a renewable, three-year term. The decision to create the position came in November, as a fast-moving investigation by Brazil's Federal Police and prosecutors was turning up new evidence almost daily of an alleged bribery scheme involving former Petrobras executives, contractors, and Brazilian politicians. Petrobras has repeatedly said it is cooperating with investigators. Mr. Elek will have "the duty of ensuring process compliance and risk mitigation, including fraud and corruption, therefore guaranteeing compliance with laws, norms standards and regulations." His term can only be terminated at the behest of Petrobras's board of directors, including the vote of at least one representative of minority or preferred shareholders. He also will serve on a three-member committee to oversee Petrobras' internal investigation of the corruption allegations that include the former president of Brazil's Supreme Court and the former chief compliance officer of Siemens AG. The committee will be responsible for handling a report by two outside law firms that Petrobras hired last year to conduct the internal probe. Petrobras settled on Mr. Elek from a list of three Brazilian executives preselected by Los Angeles-based recruiting firm Korn Ferry. Mr. Elek was previously chief financial officer at Brazilian paper and pulp maker Fibria Celulose, Petrobras said. He has a degree in electric engineering from the Pontifical Catholic University of Rio de Janeiro and a graduate degree in mergers and acquisitions from Columbia Business School. Write to Paul Kiernan at paul.kiernan@wsj.com Credit: By Paul Kiernan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644857655
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644857655?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Extends Selloff as OPEC Is Seen Standing Firm on Output; U.S. Forecasts Global Oil Market Will Remain Oversupplied
Author: Friedman, Nicole; Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
U.S. oil production has surged in recent years, reducing demand for imports and increasing the amount of crude available in the world market. The U.S. Energy Information Administration, in a forecast released Tuesday, called for global oil supplies to exceed demand in 2015 and 2016.
Full text: Another day, another selloff for oil. The catalyst Tuesday was talk from the United Arab Emirates' oil minister, who said the Organization of the Petroleum Exporting Countries would stand firm on its November decision to keep output steady. The comments dashed investor hopes that OPEC would relent and cut production in the face of a rout that has slashed U.S. oil prices 14% in the first eight trading days of the year and 57% since June. The selling spilled into other commodities and the currency market. The price of copper, a commodity about which investors hold many of the same concerns regarding excess supplies, sank to a five-year low. The Russian ruble weakened against the dollar, falling closer to the record low the oil exporter's currency hit last month. Oil's mounting losses are increasingly proving a drag on other commodities. Raw materials become cheaper to produce when energy costs fall, increasing supply at a time when sluggish economic growth is holding back demand. Many investors say they are pulling back on commodities because the indexes they track are so heavily weighted toward energy. "There's really no argument to buy here, when the markets are in the grip of this kind of selling," said Paul Christopher, head of international strategy at Wells Fargo Investment Institute, which manages $1.6 trillion. The asset manager cut its exposure to energy and metals earlier this year. Suhail Mohamed Faraj al-Mazrouei, the U.A.E. oil minister, said it could take two or three years for oil prices to stabilize. He said U.S. shale-oil producers would be the deciding factor in setting a floor for the market. OPEC "cannot continue protecting a certain price. That is not the only aim of OPEC," he said, speaking at an energy event in Abu Dhabi on Tuesday. U.S. oil production has surged in recent years, reducing demand for imports and increasing the amount of crude available in the world market. Historically, OPEC has cut production quotas to keep global supplies in line with demand, but the group has declined to play that role this time. Brent crude, the international benchmark, ended 84 cents lower, or down 1.8%, at $46.59 a barrel for February delivery, the lowest settlement since March 2009. U.S. prices ended down 18 cents, or 0.4%, at $45.89 a barrel on the New York Mercantile Exchange, the lowest price since April 2009. Brent fell as low as $45.19 a barrel in the hours after the oil minister spoke and briefly traded below Nymex crude for the first time since November. Brent usually trades at a premium to prices in the U.S., where booming domestic production and restrictions on exports have created a long-term glut. Oil's collapse is a boon for consumers, particularly U.S. drivers, who have seen average gasoline prices drop to $2.12 a gallon from $3.31 a year ago, according to AAA. However, turmoil in the oil market has unnerved investors, who fear plunging oil prices could signal problems in large economies in Europe and Asia. Commodities have been a losing bet for several years, after a boom in the last decade led many producers to invest in increasing output, creating surpluses in markets ranging from sugar to iron ore. Oil has been hit the hardest in recent months, as soaring U.S. production and OPEC's decision in November to maintain its quota created a global glut. The U.S. Energy Information Administration, in a forecast released Tuesday, called for global oil supplies to exceed demand in 2015 and 2016. The agency expects Nymex prices to average $54.58 a barrel this year before rebounding to $71 a barrel in 2016. Earlier this week, Goldman Sachs Group Inc. predicted Nymex prices would average $47.15 a barrel this year and $65 a barrel next year. Investors are bracing for more signs of a glut when the EIA releases weekly supply data Wednesday. Analysts surveyed by The Wall Street Journal gave an average forecast for a 500,000-barrel increase in U.S. oil inventories in the week that ended Jan. 9. Combined oil and fuel inventories topped 1.15 billion barrels in the previous week, the highest level recorded in data going back to 1990. Also Tuesday, the oil market shrugged off data showing record crude imports in December. Analysts said the imports suggest China is buying oil at bargain prices to fill its strategic reserves, rather than reflecting stronger demand more broadly. China is the world's No. 2 oil consumer and the biggest source of copper demand. Slowing economic growth in the country has weighed on both commodities. Chinese demand is unlikely to pick up in 2015, said Darwei Kung, portfolio manager of the $700 million Deutsche Enhanced Commodity Strategy Fund. Mr. Kung's fund has less money allocated to oil and base metals than is recommended by its benchmark. Copper for January delivery ended down 3% at $2.6790 a pound on the Comex division of the New York Mercantile Exchange, the lowest closing price since October 2009. Some investors see an opportunity to jump back into commodities, because they don't expect oil prices to stay this low for long. "We'll find a bottom here, sometime early in the year," said Keith Hembre, chief economist and portfolio manager at Nuveen Asset Management, who oversees $800 million across four funds. His funds allocated more money to commodities late last year as oil prices fell. Mr. Hembre said he expects low oil prices to force producers to eventually cut output, bringing supply and demand back in balance. However, some investors and analysts say it could take months, if not years, for that process to play out. "Oil is still piling up," said Thina Saltvedt, senior oil analyst at Nordea Bank Norge. "Sentiment will continue to be negative as long as there is no change in production." Georgi Kantchev and Summer Said contributed to this article. Write to Nicole Friedman at and Ira Iosebashvili at Credit: By Nicole Friedman and Ira Iosebashvili
Subject: Petroleum industry; American dollar; Inventory; Crude oil prices; Petroleum production
Location: United States--US United Arab Emirates
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644877342
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644877342?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Back to the Future? Oil Replays 1980s Bust; Rise of Shale Extraction Speeds Output and Changes Equation for Producers
Author: Gold, Russell
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
An expensive well costs $10 million, compared with the billions needed to drill offshore wells and build associated infrastructure. [...]expenditure of both time and money are falling fast. "No one has so far experienced what the actual consequences of a 'stress test' on U.S. production could be," says Leonardo Maugeri, a scholar at Harvard University's John F. Kennedy School of Government and a former top executive with the Italian oil giant Eni SpA.
Full text: A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn't keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Welcome to the world of oil in 2015--a repeat in surprising ways of the story 30 years ago. Between November 1985 and March 1986, the price of crude plunged by 67%. Between June 2014 and today, have fallen by 57% and could well head lower. After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there. Energy executives are now haunted by the question: Will it take as long this time? The answer may lie in one enormous difference between today and 30 years ago: the speed of shale. Before U.S. energy companies figured out how to pull oil from shale formations, petroleum projects often took years to execute. Two decades passed between a fisherman spotting a colorful slick floating off the coast of Mexico and oil flowing from the giant Cantarell project off the Yucatan Peninsula. It took nine years and billions of dollars to get crude moving from the North Slope of Alaska to markets. Today, the discovery and development of oil from shale rocks means that oil output is faster paced and near at hand--in Texas and North Dakota, Colorado, Oklahoma, Wyoming, even Ohio. Drilling and hydraulically fracturing a well takes weeks, not years. An expensive well costs $10 million, compared with the billions needed to drill offshore wells and build associated infrastructure. Moreover, expenditure of both time and money are falling fast. The oil field investment cycle has shortened. Wildcatters in Texas discovered the Eagle Ford Shale in 2008. Within five years, it was pumping a million barrels a day--thanks to an influx of capital that paid for drilling thousands of new wells. Each well roars into life and then drops off fast. Without constantly drilling new wells, these oil fields will peter out. Faster-reacting shale production could help cut supply more quickly than in the past, restoring market balance without a decadeslong wait. The availability of so much new oil, housed in easy-to-tap shale formations, could also make price spikes less frequent. But that doesn't mean prices will rebound soon, or return to the triple-digit levels seen just months ago. Price pressure may need to remain on the U.S. oil industry and its lenders for months to rein in supply. Goldman Sachs Group Inc. said Monday it saw a "U-shaped" recovery with depressed prices until the market rebalances and prices rise in 2016. The firm said it expected U.S. crude to average $47.15 a barrel this year, down from a previous prediction of $73.75. A year of low prices beats a decade, as far as the energy industry is concerned. But it is unclear exactly what will happen: shale-oil output has boomed only in the past five years--and faces its first downturn. "No one has so far experienced what the actual consequences of a 'stress test' on U.S. production could be," says Leonardo Maugeri, a scholar at Harvard University's John F. Kennedy School of Government and a former top executive with the Italian oil giant Eni SpA. Even veteran oil traders are uncertain. "Sustained low prices will ultimately bring the market into balance," Andrew Hall, who runs a $3 billion energy derivatives hedge fund, Astenbeck Capital Management LLC, wrote in a private letter to investors earlier this month which was reviewed by The Wall Street Journal. "But it is unclear how long that will take and what the new price equilibrium will be." Many economists and energy analysts believe that prices will probably rebound somewhat from current levels by the end of the year. The global benchmark for oil, currently $46.59, will "head back toward the $70 range and I suspect that will be sustainable for quite some time," says Stephen P. A. Brown, an energy economist at the University of Nevada, Las Vegas and former economist with the Dallas Federal Reserve Bank. The dollar increased in value in the early 1980s as the Federal Reserve wrung inflation out of the U.S. economy, but the Reagan Administration engineered a large devaluation in 1985 in agreement with other major economic powers. Between March 1985 and December 1987, the dollar lost 40% of its value against a basket of other major currencies. That stands in contrast to the current episode: The dollar rose more than 12% in 2014, compared with a basket of widely traded securities. During the last big supply-driven oil bust, demand had been muted for several years, in part because of conservation measures Americans embraced after the Arab oil embargo in the 1970s. The country adopted energy-efficiency standards for cars, while using oil to generate electricity fell out of favor. Meanwhile, oil output outside OPEC grew rapidly. Production in the North Sea surged, as did output from China and Oman. Mexico began shipping more than one million barrels a day in 1981 from its Cantarell complex. Even the American oil industry had started pumping more oil from its high-cost oil fields. And so a glut developed. At first, as oil prices began retreating, Saudi Arabia tried to bolster prices by cutting its production, which fell from 10 million barrels a day in the early years of the decade to 2.3 million in August 1985, according to the U.S. Energy Information Administration. Late that year, tired of losing market share to rising oil exporters, the Saudis threw in the towel and began pumping again--and so did the rest of OPEC. Global oil prices went into free fall, declining from over $30 a barrel in November 1985 to nearly $10 by July 1986. The U.S. oil industry basically shut down. In late 1985, there were nearly 2,300 rigs drilling wells; a year later, there were barely 1,000. Prices spiked upward a few years later, prompted by Iraq's invasion of Kuwait in 1990. But that didn't last long, ending in 1991 once Operation Desert Storm pushed Iraq out of Kuwait and the fires set by retreating forces were put out. Afterward, prices remained low, bouncing between $15 and $25 until the end of the decade. It wasn't until about 2000 that supply began to struggle to keep up with rising demand. Global economic growth, especially in Asia, pushed demand for crude as the Chinese middle class began driving cars. Chinese oil imports, virtually nonexistent in 1985, have risen steadily ever since. On Tuesday, Chinese data hit a record of about seven million barrels a day. Prices spiked in the summer of 2008, then plunged when the economy crashed and went into recession. But the price drop was brief and prices rebounded quickly. Today, demand for crude is growing, albeit slowly, around the world. The health of the global economy and Chinese appetite for fuel will have a significant impact on global and U.S. crude prices. An outside event--warfare or civil strife in a major crude-producing country--could raise prices again. As in the past, Saudi Arabia is betting that low prices will force other producers to cut back. Falling prices will hurt U.S. output, but perhaps less than OPEC expected. The cost of producing oil from shale--especially in the new U.S. oil fields responsible for a huge upsurge in output--has been falling. ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel, a figure that has been falling in recent years. A Conoco spokesman said improved efficiency, better technology and a better understanding of the rocks helped the company reduce costs. And it is not alone. The expense of getting oil from the Eagle Ford Shale fell by about 15%, or $7.50 a barrel, last year, despite intense competition for rigs, truck drivers and oil-field services, says Pers Magnus Nysveen, head of analytics for Rystad Energy, a Norway-based global oil consultant. Costs could fall another 10% to 15% this year as some financially weak companies pull back and competition for services lessens. "The key driver here is improved efficiency," Mr. Nysveen says. Companies like EOG Resources Inc. are drilling better wells faster. EOG said recently it takes 4.3 days to drill its average well in the Eagle Ford Shale in South Texas, down from 14.2 days in 2012. What's more, as it drills more of them, it has figured out how to locate wells to get the highest oil output. Combining lowering costs and increasing output means that EOG says it can drill wells at $40 per barrel in North Dakota, South Texas and West Texas, while still earning a 10% return. We "pride ourselves on being a very efficient operator," Billy Helms, EOG's head of exploration, said at a recent industry conference. Since oil prices began to fall, many companies have cut their capital spending plan for 2015 and the number of drilling rigs in the U.S. has fallen. But output has continued to increase. Mike Rothman, president of Cornerstone Analytics, says that given the decreasing costs of drilling, it is not clear when shale output in the U.S. will fall. "How quick will the response in shale oil be to this drop in prices? That is a big open question," he says. "With shale, you are dealing with something very different." Write to Russell Gold at Credit: By Russell Gold
Subject: Energy industry; Petroleum industry; Executives; Central banks; Crude oil prices; Drilling
Location: United States--US Middle East
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644877467
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644877467?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Japan Expects Higher Tax Revenue; Abe Budget Plan Counts on Corporate Profits Continuing to Grow on Cheap Oil, Weak Yen
Author: Obe, Mitsuru
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract: None available.
Full text: TOKYO--Japan expects tax revenue to reach its highest level in 24 years in the fiscal year starting in April, helping Prime Minister Shinzo Abe in his pledge to reduce the highly indebted country's budget deficit. Mr. Abe's cabinet on Wednesday approved the budget for the next fiscal year. Parliament, which is controlled by his ruling coalition, is expected to pass it in the spring. The budget plan counts on Japanese corporate profits continuing to grow in the coming year, backed by a weak yen and falling oil prices. Higher profit should allow businesses to pay higher bonuses and salaries, stimulating private consumption, government officials said. For the moment, the projection appears achievable. It assumes crude-oil prices will average $69 a barrel, whereas the global benchmark, Brent crude, was trading at around $46 a barrel on Tuesday. Japan imports nearly all of its oil, and cheaper prices stand to lower costs for its corporations and, all things being equal, raise profits. But further turmoil in Europe, a slowdown in China or weaker-than-expected consumption at home could hit Japan's economy in 2015 and cause tax revenue to fall short of projections. "Tax revenue has increased strongly in the current fiscal year, and it is hoped that it will grow again in the next fiscal year," Finance Minister Taro Aso said on Friday. But, he added, "there's nothing certain about the economy." The government budget estimates tax revenue for the next fiscal year will total ¥54.5 trillion ($460 billion), a 5.4% increase over the estimate for the current year. More than half of the increase is due to a sales-tax increase that took effect last year, while the remainder hinges on a rebound in economic growth after a recession in 2014, officials said. Such an increase would mean a 24% jump in tax revenue in three years under the leadership of Mr. Abe, who took office in December 2012 with a pledge to pull the nation out of its economic malaise by stamping out deflation and reviving growth. The prime minister postponed a second tax increase that had been set to take effect in October 2015, saying growth was more important than trying to fix Japan's finances right away. Japan is the world's most indebted major economy, with total government debt more than twice its gross domestic product. The budget projection presumes global economic growth of 3.6%, with exports rising 5.2% in real terms. Imports are expected to grow at a more modest 3.9%. Another reason for Japan's shrinking deficit is a relatively restrained spending plan after Mr. Abe's earlier efforts to stimulate growth through government projects. Mr. Abe will keep annual spending at ¥96.3 trillion, an increase of 0.5% from the current fiscal year's initial budget, while borrowing will be reduced by 11% to ¥36.9 trillion, the smallest in seven years, according to the budget plan. Cheaper oil prices are likely to increase national income by 1% to 2%, said Shuji Tonouchi, an economist with Mitsubishi UFJ Morgan Stanley Securities. However, economists say it isn't clear yet whether Japanese corporations and consumers will spend the extra money they get from lower energy costs and spur more sustained growth. Japan's fiscal-consolidation plan calls on the government to halve the deficit in the primary budget, which accounts for spending and revenue but excludes new government bond issuance and interest payments, by fiscal 2015. The government aims to produce a primary budget surplus by 2020. Mr. Abe's policies have helped raise employment and wages have gone slightly up, resulting in higher income-tax revenue. But many of the new jobs are part-time, and many Japanese, especially outside of Tokyo, say they don't feel the benefits of Abenomics. Write to Mitsuru Obe at Credit: By Mitsuru Obe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644912238
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644912238?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Continues to Drop on Global Growth Concerns; Market Looks to U.S. Oil Inventory Data
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
About half of the world's oil-producing projects aren't economical if oil prices remain below $50 a barrel and falling production levels will likely help restore the balance in oil markets by 2016, Gordon Kwan, Nomura's head of oil research, said in a report.
Full text: Oil prices fell in Asian trade Wednesday on concerns about global growth and ahead of a weekly U.S. inventory report expected to show even higher oil supplies. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February was at $45.46 a barrel in recent trade, down 43 cents in the Globex electronic session. February Brent crude on London's ICE Futures exchange fell 41 cents to $46.18 a barrel. Nymex crude has settled lower for three consecutive trading sessions and Brent crude has fallen for four consecutive sessions. Brent has lost nearly 60% since June 2014. Price charts indicate that oil is very much in oversold territory, and it is very hard, on the basis of technical analysis, to say where the price floor might be, said Simon Powell, head of Asian oil and gas at CLSA. Even experienced oil-watchers are having a hard time seeing where prices will hit bottom, he said. "If the markets are rational we're probably not very far from it," he added. Mr. Powell said one of the reasons oil prices have fallen so much is that for a long time oil was being bought by investors as a hedge against a weak U.S. dollar, but with the dollar strengthening those bullish positions have been unwinding rapidly. A dismal outlook for global growth also weighed on oil markets. The World Bank cut its outlook for global growth Tuesday. It said the global economy is expected to expand 3% this year, up from 2.6% in 2014, but still slower than its earlier forecast of 3.4% for 2015. It also trimmed its 2016 forecast for global growth to 3.3% from 3.5%. The bank said a strengthening U.S. economy--the only bright spot for global growth--and plummeting oil prices won't be enough to offset deepening trouble in the eurozone and emerging markets. Late Tuesday, the American Petroleum Institute--a trade group--said U.S. crude stocks rose by 3.9 million barrels in the week ended January 9. The U.S. Energy Department's inventory data is due later Wednesday and analysts estimate stockpiles to have risen by 500,000 barrels. Higher oil supply is bearish for prices. Meanwhile Nomura Securities was the latest bank to slash its oil price forecasts. It now expects Brent crude to average $60 a barrel in 2015, down from its previous forecast of $85 a barrel. About half of the world's oil-producing projects aren't economical if oil prices remain below $50 a barrel and falling production levels will likely help restore the balance in oil markets by 2016, Gordon Kwan, Nomura's head of oil research, said in a report. Ian Talley contributed to this article Write to Eric Yep at Credit: By Eric Yep
Subject: Petroleum industry; Inventory; Crude oil prices
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1644980846
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1644980846?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced wi th permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Tokyo Projects Cheaper Oil Will Boost Tax Revenue
Author: Obe, Mitsuru
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Jan 2015: A.10.
Abstract:
Japan expects tax revenue to reach its highest level in 24 years in the fiscal year starting in April, helping Prime Minister Shinzo Abe in his commitment to reduce the highly indebted country's budget deficit.
Full text: TOKYO -- Japan expects tax revenue to reach its highest level in 24 years in the fiscal year starting in April, helping Prime Minister Shinzo Abe in his commitment to reduce the highly indebted country's budget deficit. Mr. Abe's cabinet on Wednesday approved the budget for the next fiscal year. Parliament, which is controlled by his ruling coalition, is expected to pass it in the spring. The budget plan counts on Japanese corporate profits continuing to grow in the coming year, backed by a weak yen and falling oil prices. Higher profits should allow businesses to pay higher bonuses and salaries, stimulating private consumption, government officials said. The government budget estimates tax revenue for the next fiscal year will total 54.5 trillion yen ($460 billion), a 5.4% increase over the estimate for the current year. Credit: By Mitsuru Obe
Subject: Budgets; Tax revenues
Location: Japan
People: Abe, Shinzo
Classification: 9179: Asia & the Pacific; 1120: Economic policy & planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.10
Publication year: 2015
Publication date: Jan 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645012469
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645012469?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Suncor Curbs Spending, Not Oil-Sands Projects
Author: King, Carolyn; Dawson, Chester
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Jan 2015: B.2.
Abstract:
Suncor Energy Inc. said it would cut its 2015 capital-spending program by 1 billion Canadian dollars ($837 million) in response to the sharp drop in crude-oil prices, but said it would move forward with major oil-sands and other expansion projects currently under construction.
Full text: Suncor Energy Inc. said it would cut its 2015 capital-spending program by 1 billion Canadian dollars ($837 million) in response to the sharp drop in crude-oil prices, but said it would move forward with major oil-sands and other expansion projects currently under construction. The oil-sands producer joined a growing list of Canadian energy companies that have scaled back their spending plans on new projects even as they expect to continue to increase production from existing operations. The Calgary-based company now plans to spend up to C$6.8 billion on capital projects this year -- the same amount as in 2014 -- not up to the C$7.8 billion it had announced in November. Suncor also plans to cut operating expenses by C$600 million to C$800 million over the next two years. It said projects under way such as the C$13.5 billion Fort Hills oil-sands mine in Alberta and the Hebron oil field off Canada's east coast, will move forward as planned. These long-term growth projects are expected to come online in late 2017. "Today's spending reductions are consistent with our commitment to spend within our means and maintain a strong balance sheet. We will monitor the pricing environment and take further action as required," Chief Executive Steve Williams said. Suncor's guidance for production this year of 540,000 to 585,000 barrels of oil equivalent a day remains unchanged. That is above the 525,000 to 570,000 barrels of oil equivalent it planned to produce in 2014. The company has said its average production costs are just $30 per barrel from its existing operations. On Tuesday, the global benchmark Brent crude for February delivery fell 84 cents, or 1.8%, to $46.59 a barrel on ICE Futures Europe, the lowest settlement since March 2009. Canadian Natural Resources Ltd., another major oil-sands producer, said Monday that it would trim its 2015 spending budget by C$2.4 billion to C$6.2 billion, citing the recent drop in oil price. That followed a decision Friday by the Canadian unit of Royal Dutch Shell PLC to cut as much as 10% of its oil sands workforce. Suncor said Tuesday it planned to eliminate about 1,000 jobs this year, mainly contract workers, and push back construction of projects it hadn't yet green-lighted, such as the MacKay River 2 oil-sands project and the White Rose offshore oil field extension. The Bank of Nova Scotia estimates brand new oil-sands well-drilling projects break even at $65 a barrel and new surface mines break even at $90 a barrel, which is nearly double the current spot market price for oil. Credit: By Carolyn King and Chester Dawson
Subject: Petroleum industry; Oil sands; Construction; Capital expenditures
Location: Calgary Alberta Canada Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112
Classification: 9172: Canada; 3100: Capital & debt management; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Jan 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645012509
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645012509?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia Plans Deep Budget Cuts as Revenues Drop; Finance Minister Plans 10% Cuts Across All Sectors, Except Military, After Oil's Drop, Western Sanctions
Author: Cullison, Alan; Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
Late last year Mr. Siluanov said that Russia needed to reassess its military spending amid slowing economic growth and reduced access to global capital markets as falling oil prices have hit the domestic economy hard.
Full text: MOSCOW--Russia is planning steep cuts in spending across all parts of its budget, except defense, as it grapples with Western economic sanctions and a big oil-price drop while digging in for further confrontation with the West over Ukraine, officials said Wednesday. Moscow's resolve comes amid renewed fighting in eastern Ukraine, and the scrubbing of a proposed summit between the leaders of Russia, Germany, France and Ukraine to discuss ways to end fighting in eastern Ukraine. German Chancellor Angela Merkel said Wednesday there was no point in holding talks in the Kazakh capital of Astana because a cease-fire agreed upon at earlier talks in Belarus has failed. Germany says Russia must use its influence with Russian-backed rebels to abide by the cease-fire before a resumption of talks. Western leaders are hoping Russia's deepening economic debacle would force Moscow to end its support for rebels in Ukraine. After a plunge in the ruble and considerable capital flight over the past two months, Russia is widely expected to slide into a deep recession this year while also suffering from double-digit inflation. But at a conference of Russia's top economic planners in Moscow on Wednesday, officials signaled the Kremlin is girding itself for a prolonged decline in oil prices and economic sanctions. Prime Minister Dmitry Medvedev said Moscow is hoping for better relations with Europe, its largest trading partner, but added that it might not happen soon. "Sanctions come and go, together with their authors," Mr. Medvedev said. He suggested Russia may soon declare Ukraine to be in default of a $3 billion loan that Moscow extended to Kiev in 2013 before the country's former pro-Russian president, Viktor Yanukovych, fled Kiev. If Russia demands repayment, analysts say, the West will likely end up driving up the price of an already costly bailout of Ukraine's finances by the International Monetary Fund, Europe and the U.S. "We don't want Ukraine to default, to jeopardize an already disastrous condition of the Ukrainian economy," Mr. Medvedev said at the economic forum. "But one should pay back debts." Moscow is counting on an eventual bounce in the price of oil. Its drop, officials said Wednesday, has been far more devastating to the Russian economy than Western sanctions. Russian Finance Minister Anton Siluanov said the budget faces a shortfall of up to $240 billion in revenue, but that most of it--about $180 billion--is due to the oil-price collapse. He said his ministry plans 10% across-the-board budget cuts, although funding to the military would remain untouched. To make up for lost revenue, Mr. Siluanov said the finance ministry will uncork a reserve fund, accumulated over years of buoyant oil prices, to deposit 500 billion rubles into the country's financial system, which has been battered by the central bank's decision to raise a key interest rate to 17% late last year in a bid to halt a run on the ruble. But analysts said the sum, about $7.65 billion at today's exchange rate, is too miserly to make much difference. The injection "will certainly improve the situation, but won't be able to adequately shore up the currency nor fill the budget gaps," said Phoenix Kalen of Société Générale in London, who called it "woefully inadequate." The Kremlin hopes that massive reserves in the central bank and finance ministry, now tallied at around $400 billion, will be sufficient to get the country through a slump in oil prices for a year or two. German Gref, who heads the country's largest lender, Sberbank, said that he doesn't expect oil to recover to previous highs, though he did hope it would eventually climb back to a range of $60 to $70 a barrel. Mr. Gref said that with oil at its current level, Russia will spend all of its reserves within two years. He said Russia needs to reform state bureaucracy and improve its business climate to attract investment. Sanctions, he said, are only slowing down reforms by propping up Kremlin's approval ratings among Russians who like to see Mr. Putin stand up to the West. But analysts noted that high officials in the Russian government have for years called for economic reforms to little effect. With the ruble plunging and export revenue shrinking, pressure on Russian markets has been growing amid expectations that ratings agency Standard & Poor's will downgrade Russia's rating to junk. Russia's central bank recently adjusted its worst-case scenario for a fall in oil prices to $40 a barrel, said Ksenia Yudaeva, a deputy chairwoman of Russia's central bank. Previously, the central bank's worst-case scenario envisaged a slide in oil prices to $60, down from around the $100 level initially forecast for this year. On Wednesday, the central bank said its board was shuffled amid criticism of its handling of the ruble last year, when the bank spent $80 billion trying to slow the fall of the currency. Ms. Yudaeva, who was trained in the U.S. and was appointed in 2013, was replaced as head of monetary policy. While she will remain at the bank, her new portfolio will be economic forecasting and financial stability, she said. Her replacement is a clear signal the Kremlin doesn't want the central bank to spend too much on the ruble, said Timothy Ash, head of emerging market research at Standard Bank in London. The Kremlin, he said, believes that foreign-exchange reserves "had now become strategic because of the difficult geopolitical setting with sanctions over Ukraine." Meanwhile, Western sanctions and the European Union's stance on Russia were debated Wednesday at the European Parliament in Strasbourg. EU foreign policy chief Federica Mogherini defended her approach to Russia, insisting she wasn't "soft" on Moscow but adding that it is crucial the EU engage in real dialogue to solve the crisis in Ukraine. After facing criticism from a number of EU lawmakers over her approach to the Russian situation during Wednesday's session, Ms. Mogherini told the Parliament that everyone agreed it was important "to keep the pressure on" Moscow. "Sanctions on Russia are there. Yes, they have worked economically. Have they worked politically? Maybe they are starting to," she said. She insisted there would be no easing of restrictions unless there were a real improvement in the situation in eastern Ukraine. However, she said there is more the EU could be doing by talking with all sides to promote a political solution. This would allow the bloc "to be less reactive and more proactive," she said. "I think it is the only way in which we can play our role. This does not mean being soft but even for being hard, you need to talk," she said. The Wall Street Journal on Tuesday reported on a paper penned by the EU foreign service unit that explores ways to improve ties with Moscow and scale back sanctions. The paper was drafted ahead of next Monday's EU foreign ministers debate on Russia. It made no mention of increased sanctions if the situation in eastern Ukraine deteriorates. Ms. Mogherini started the EU job in November with some questioning her approach to Russia. Those concerns were one factor in delaying member states' backing of her appointment at a leaders meeting in July. However, the former Italian foreign minister has repeatedly made clear that Russia's support for the rebels in eastern Ukraine must stop and pledged EU backing to Kiev. In her comments on Wednesday, Ms. Mogherini also said the EU will "never" accept Russia's annexation of Crimea and she warned that the death of 13 civilians in eastern Ukraine, after a rocket hit a bus on Tuesday, must not be the start of another increase in violence in the region. The EU paper suggested that the European Union could significantly scale back sanctions and resume discussions with Russia--on issues ranging from visa-free travel, cooperation with the Moscow-led Eurasian Economic Union, and the crises in Libya, Syria and Iraq--if Russian President Vladimir Putin moves to end the fighting in eastern Ukraine. The EU's sanctions on Russia will expire between March and July, and the bloc needs the backing of all 28 member states to renew the measures. Ms. Mogherini, who met with Russian Foreign Minister Sergei Lavrov last month, has said she plans to travel to Moscow at some point to meet with Russian leaders. Chiara Albanese in London and Laurence Norman in Brussels contributed to this article. Write to Alan Cullison at and Andrey Ostroukh at Credit: By Alan Cullison and Andrey Ostroukh
Subject: Recessions; Defense spending
Location: Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645041282
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645041282?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Back to the Future? Oil Replays 1980s --- Shift to Shale Fields Changes Equation For the Industry
Author: Gold, Russell
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Jan 2015: B.1.
Abstract:
An expensive well costs $10 million, compared with the billions needed to drill offshore wells and build associated infrastructure. [...]expenditure of both time and money are falling fast. "No one has so far experienced what the actual consequences of a 'stress test' on U.S. production could be," says Leonardo Maugeri, a scholar at Harvard University's John F. Kennedy School of Government and a former top executive with the Italian oil giant Eni SpA.
Full text: A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn't keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Welcome to the world of oil in 2015 -- a repeat in surprising ways of the story 30 years ago. Between November 1985 and March 1986, the price of crude plunged by 67%. Between June 2014 and today, crude prices have fallen by 57% and could well head lower. After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there. Energy executives are now haunted by the question: Will it take as long this time? The answer may lie in one enormous difference between today and 30 years ago: the speed of shale. Before U.S. energy companies figured out how to pull oil from shale formations, petroleum projects often took years to execute. Two decades passed between a fisherman spotting a colorful slick floating off the coast of Mexico and oil flowing from the giant Cantarell project off the Yucatan Peninsula. It took nine years and billions of dollars to get crude moving from the North Slope of Alaska to markets. Today, the discovery and development of oil from shale rocks means that oil output is faster paced and near at hand -- in Texas and North Dakota, Colorado, Oklahoma, Wyoming, even Ohio. Drilling and hydraulically fracturing a well takes weeks, not years. An expensive well costs $10 million, compared with the billions needed to drill offshore wells and build associated infrastructure. Moreover, expenditure of both time and money are falling fast. The oil field investment cycle has shortened. Wildcatters in Texas discovered the Eagle Ford Shale in 2008. Within five years, it was pumping a million barrels a day -- thanks to an influx of capital that paid for drilling thousands of new wells. Each well roars into life and then drops off fast. Without constantly drilling new wells, these oil fields will peter out. Faster-reacting shale production could help cut supply more quickly than in the past, restoring market balance without a decadeslong wait. The availability of so much new oil, housed in easy-to-tap shale formations, could also make price spikes less frequent. But that doesn't mean prices will rebound soon, or return to the triple-digit levels seen just months ago. Price pressure may need to remain on the U.S. oil industry and its lenders for months to rein in supply. Goldman Sachs Group Inc. said Monday it saw a "U-shaped" recovery with depressed prices until the market rebalances and prices rise in 2016. The firm said it expected U.S. crude to average $47.15 a barrel this year, down from a previous prediction of $73.75. A year of low prices beats a decade, as far as the energy industry is concerned. But it is unclear exactly what will happen: shale-oil output has boomed only in the past five years -- and faces its first downturn. "No one has so far experienced what the actual consequences of a 'stress test' on U.S. production could be," says Leonardo Maugeri, a scholar at Harvard University's John F. Kennedy School of Government and a former top executive with the Italian oil giant Eni SpA. Even veteran oil traders are uncertain. "Sustained low prices will ultimately bring the market into balance," Andrew Hall, who runs a $3 billion energy derivatives hedge fund, Astenbeck Capital Management LLC, wrote in a private letter to investors earlier this month which was reviewed by The Wall Street Journal. "But it is unclear how long that will take and what the new price equilibrium will be." Many economists and energy analysts believe that prices will probably rebound somewhat from current levels by the end of the year. The global benchmark for oil, currently $46.59, will "head back toward the $70 range and I suspect that will be sustainable for quite some time," says Stephen P. A. Brown, an energy economist at the University of Nevada, Las Vegas and former economist with the Dallas Federal Reserve Bank. The dollar increased in value in the early 1980s as the Federal Reserve wrung inflation out of the U.S. economy, but the Reagan Administration engineered a large devaluation in 1985 in agreement with other major economic powers. Between March 1985 and December 1987, the dollar lost 40% of its value against a basket of other major currencies. That stands in contrast to the current episode: The dollar rose more than 12% in 2014, compared with a basket of widely traded securities. During the last big supply-driven oil bust, demand had been muted for several years, in part because of conservation measures Americans embraced after the Arab oil embargo in the 1970s. The country adopted energy-efficiency standards for cars, while using oil to generate electricity fell out of favor. Meanwhile, oil output outside OPEC grew rapidly. Production in the North Sea surged, as did output from China and Oman. Mexico began shipping more than one million barrels a day in 1981 from its Cantarell complex. Even the American oil industry had started pumping more oil from its high-cost oil fields. And so a glut developed. At first, as oil prices began retreating, Saudi Arabia tried to bolster prices by cutting its production, which fell from 10 million barrels a day in the early years of the decade to 2.3 million in August 1985, according to the U.S. Energy Information Administration. Late that year, tired of losing market share, the Saudis threw in the towel and began pumping again -- and so did the rest of OPEC. Global oil prices went into free fall, declining from over $30 a barrel in November 1985 to nearly $10 by July 1986. The U.S. oil industry basically shut down. In late 1985, there were nearly 2,300 rigs drilling wells; a year later, there were barely 1,000. It wasn't until about 2000 that supply began to struggle to keep up with rising demand. Global economic growth, especially in Asia, pushed demand for crude as the Chinese middle class began driving cars. Chinese oil imports, virtually nonexistent in 1985, have risen steadily ever since. On Tuesday, Chinese data hit a record of about seven million barrels a day. As in the past, Saudi Arabia is betting that low prices will force other producers to cut back. Falling prices will hurt U.S. output, but perhaps less than OPEC expected. The cost of producing oil from shale -- especially in the new U.S. oil fields responsible for a huge upsurge in output -- has been falling. ConocoPhillips, a major U.S. oil producer, says it can make a profit on its U.S. shale wells as long as oil trades for more than $40 a barrel, a figure that has been falling in recent years. And it is not alone. The expense of getting oil from the Eagle Ford Shale fell by about 15%, or $7.50 a barrel, last year, despite intense competition for rigs, truck drivers and oil-field services, says Pers Magnus Nysveen, head of analytics for Rystad Energy, a Norway-based global oil consultant. Costs could fall another 10% to 15% this year. "The key driver here is improved efficiency," Mr. Nysveen says. Companies like EOG Resources Inc. are drilling better wells faster. EOG said recently it takes 4.3 days to drill its average well in the Eagle Ford Shale in South Texas, down from 14.2 days in 2012. Combining lowering costs and increasing output means that EOG says it can drill wells at $40 per barrel in North Dakota, South Texas and West Texas, while still earning a 10% return. Since oil prices began to fall, many companies have cut their capital spending plan for 2015 and the number of drilling rigs in the U.S. has fallen. But output has continued to increase. Mike Rothman, president of Cornerstone Analytics, says that given the decreasing costs of drilling, it is not clear when shale output in the U.S. will fall. "How quick will the response in shale oil be to this drop in prices? That is a big open question," he says. "With shale, you are dealing with something very different." Credit: By Russell Gold
Subject: Petroleum industry; Crude oil prices
Location: United States--US
Classification: 9190: United States; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 14, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645048778
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645048778?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Beaten-Down Oil Prices Rise Sharply; Prices Notch Biggest Percentage Gain Since 2012
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
The International Energy Agency and the Organization of the Petroleum Exporting Countries will release reports on supply and demand later this week.
Full text: Oil prices rebounded Wednesday from recent steep declines, posting their largest one-day percentage gain in more than two years. Buyers entered the market after U.S. prices fell below $45 a barrel on Tuesday, analysts said. On Wednesday, futures surged into the settlement, when the front-month February Nymex oil options contract expired. Traders had large positions in February options between $44 and $50 a barrel, making trading volatile Wednesday as market participants closed or rolled over those positions. "The low from yesterday caught a lot of people's attention," said John Kilduff, founding partner of Again Capital in New York. "A lot of people have been waiting in the wings to pick a bottom, to jump all over a bottom. This is the first hint of one that we've seen." Brent, the global benchmark, settled up $2.10, or 4.5%, at $48.69 a barrel on ICE Futures Europe. The U.S. benchmark rose $2.59, or 5.6%, to $48.48 a barrel on the New York Mercantile Exchange. Both contracts posted their biggest one-day percentage gain since June 2012 and their largest one-day dollar gain since December. , with Brent shedding nearly 60% of its value. Market watchers said the rally wasn't a surprise, but oil prices likely have further to fall in the coming weeks, due to concerns about global growth and a persistent oil oversupply. U.S. inventory data released Wednesday showed total U.S. crude-oil and petroleum-product supplies at 1.16 billion barrels, a record high in weekly data going back to 1990. Stockpiles of crude oil, gasoline and distillates all rose more than analysts surveyed by The Wall Street Journal had expected. U.S. oil production and crude-oil imports also increased in the week. "Oil production continues to be strong, and so does world-wide production," said Tony Headrick, energy analyst at CHS Hedging LLC. "The outlook is for those crude-oil inventories to continue to rise." Prices initially pared gains on the report, but rose later in the session. "I'm not saying this is the bottom," said Andy Lebow, senior vice president for energy at Jefferies LLC. But "at some point, the bearish news can only press [prices] so much further." A weak outlook for the global economy increased fears that slowing demand growth for oil won't recover soon. . The institution said the global economy is expected to expand 3% this year, up from 2.6% in 2014, but still slower than its earlier forecast of 3.4% for 2015. It also trimmed its 2016 forecast for global growth to 3.3% from 3.5%. The bank said a strengthening U.S. economy, the only bright spot for global growth, and plummeting oil prices won't be enough to offset deepening trouble in the eurozone and emerging markets. The World Bank report comes after the U.S. Energy Information Administration said Tuesday that global oil supplies will outpace demand in 2015 and 2016, keeping prices subdued. The International Energy Agency and the Organization of the Petroleum Exporting Countries will release reports on supply and demand later this week. Gasoline futures for February delivery rose 8.22 cents, or 6.5%, to $1.3507 a gallon, the largest one-day percentage gain since July 2009. Diesel futures settled up 2.22 cents, or 1.4%, at $1.6552 a gallon. Eric Yep in Singapore and Georgi Kantchev in London contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Futures; Petroleum production
Location: United States--US
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16 45054836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645054836?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Royal Dutch Shell Allowed to Export Oil from U.S. Approval Given To Export an Ultralight Grade of Crude, Says a Company Spokesman
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
While such rulings would allow Shell and a handful of others to find a wider market for their products, world-wide oil prices have fallen by about 50% since last June, and the price difference between the U.S. and international oil benchmarks has tightened, cutting into the potential profits to be made by exports.
Full text: Royal Dutch Shell PLC has received approval from federal officials to export an ultralight grade of crude oil from the U.S., a company spokesman said. In 2014, the U.S. Commerce Department gave permission to smaller companies to ship ultralight oil, known as condensate, marking the first time in almost four decades that crude produced in the U.S. could be sold offshore. Rules imposed after the 1970s Middle East oil crisis allow processed products like gasoline to be exported, but, in most circumstances, not crude oil itself. As drilling in places like Texas' Eagle Ford Shale produced a glut of U.S. crude, companies last year--when oil outside the U.S. was trading at more than $100 per barrel--tried to sway federal officials to let them sell their barrels offshore. that the Commerce Department made private rulings that define some ultralight oil as fit for export after it has been minimally processed. The Shell spokesman said the company has been working with the Commerce Department division responsible for handling oil exports and received a "favorable" ruling that "enables Shell to export processed condensate." While such rulings would allow Shell and a handful of others to find a wider market for their products, world-wide oil prices have fallen by about 50% since last June, and the price difference between the U.S. and international oil benchmarks has tightened, cutting into the potential profits to be made by exports. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry; Crude oil; Energy economics; Exports
Location: United States--US Texas
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645095817
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645095817?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
EPA Set to Regulate Oil and Gas Methane Emissions; Proposal Would Be First-Ever Direct Regulation on Methane
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration.
Full text: WASHINGTON--The Obama administration unveiled plans Wednesday to regulate methane emissions from the nation's oil and natural-gas industry, a move aimed at meeting climate-change goals while not hampering the nation's energy boom that has been a big economic driver during President Barack Obama's tenure. The Environmental Protection Agency plans to propose the first-ever federal regulations to cut methane emissions from the oil and gas sector between 40% and 45% over the next decade based on emissions levels from 2012, White House and agency officials said Wednesday. The regulation, to be proposed this summer and completed by 2016, is designed to help the administration meet a commitment it made in Beijing in November to reduce U.S. greenhouse gas emissions and bring momentum to a United Nations summit later this year where world leaders will decide whether to create a new climate agreement. Administration officials maintain that the EPA's regulations wouldn't hamper the growth of the oil and gas industry, a view shared by at least some energy executives. Despite skepticism from some environmentalists, the administration has supported natural gas as an energy source in part because it puts out fewer carbon emissions than coal or oil. The regulations will "allow the industry to continue to grow and provide a vital source of energy for Americans across the country," Janet McCabe, EPA's acting assistant administrator for air and radiation, said Wednesday. At the same time, the Obama administration and environmental groups have become increasingly worried about the effects of natural-gas use on climate change as the U.S. produces more of the fuel. Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration. Methane emissions from the sector have dropped roughly 15% over that same period through 2012, according to EPA data, but the agency estimates that these emissions will rise 25% over the next decade if steps aren't taken to cut them. The action announced Wednesday represents a sort of middle ground between what environmental groups wanted and what the oil and natural gas industry said they could support, though the administration left the door open for more expansive regulation later on. "I don't see this as having a significant cost impact on our company at all," said Mark Boling, an executive vice president at Southwestern Energy Co., one of the nation's largest producers of natural gas. Mr. Boling added that while low oil and natural-gas prices present cost challenges to the industry, they are unlikely to have a deciding impact on how this regulation bears out on a broader scale. "I don't see it having a negative impact on the oil and natural gas boom here at all," said Mr. Boling, speaking by phone from Houston. The EPA rule would expand a regulation it imposed on the oil and gas industry in 2012 that focused on reductions of traditional pollutants that had the side-benefit of cutting methane. Oil and gas companies had expressed support for stopping with this existing regulation and beefing up voluntary measures. But the agency is going further and will propose methane standards for new oil and natural-gas sources under the same part of the Clean Air Act the agency is already using to regulate carbon emissions from power plants, a controversial plan that is a top target of congressional Republicans and some Democrats. For existing oil and gas operations, the EPA will rely mostly on voluntary measures to cut methane from existing sources, a move for which the industry had lobbied. While cheering the EPA's move toward regulation, some environmental groups also criticized the administration for not regulating existing sources. However, the Clean Air Act legally triggers regulation on existing sources eventually if the agency pursues rules affecting new sources. "The administration is proposing to fight methane pollution with one hand tied behind its back, not using the full range of powers under the Clean Air Act to cut these emissions," Conrad Schneider, advocacy director of the Clean Air Task Force. Trade groups representing the oil and gas industry were more critical than some individual companies. Marty Durbin, president and CEO of America's Natural Gas Alliance a trade group representing natural-gas producers including Southwestern said he was "disappointed the administration is choosing to take a regulatory approach that will take years to implement, rather than a cooperative approach with the industry that we believe will ultimately result in greater emissions reductions in a shorter time frame." Reaction on Capitol Hill was split with Republicans, who now control both chambers of Congress, criticizing the move and vowing swift oversight, and Democrats commending the administration's actions. "The EPA has once again announced plans to impose a mandate designed to stifle our domestic energy industries despite the successful voluntary steps made by U.S. oil and gas companies to reduce methane emissions," said Senate Environment and Public Works Chairman James Inhofe (R., Okla.) in a statement Wednesday. Many independent analysts concluded the EPA's actions were, for now anyway, a positive result for the oil and gas industry. A research note by ClearView Energy Partners, a nonpartisan energy research firm whose clients include institutional investors and corporations involved in the oil and gas industry, said that the outcome is "generally beneficial for industry." The firm added, though, that environmental groups may try to sue to force the EPA into regulating existing sources, a move universally opposed by the oil and gas industry. Write to Amy Harder at Credit: By Amy Harder
Subject: Environmental protection; Emissions; Environmental regulations; Energy policy; Petroleum industry; Carbon; Industrial plant emissions; Regulation; Climate change; Petroleum production
Location: United States--US
People: Obama, Barack
Company / organization: Name: Southwestern Energy Co; NAICS: 211112; Name: United Nations--UN; NAICS: 928120; Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645154404
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645154404?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tumbling Oil Costs Push Import Prices Down 2.5% in December; Plunging Energy Prices, Stronger Dollar Seen Lowering Inflation
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
"Falling oil prices and a stronger dollar led prices for imported goods lower and continue to weigh on U.S. inflation," Sam Bullard, senior economist at Wells Fargo, said in a note to clients.
Full text: WASHINGTON--Prices of imported goods posted their biggest drop in six years in December, more evidence plunging oil prices and a strong dollar are pushing down inflation in the U.S. Import prices fell 2.5% from November, the Labor Department said Wednesday. Economists surveyed by The Wall Street Journal had forecast a decline of 2.9%. Import prices have been falling since July alongside a sharp drop in the cost of oil. , a reflection of supply outstripping demand. The effects have been widespread, with consumers benefiting from cheaper gasoline, many businesses paying less for fuel and related raw materials, and oil and gas companies slashing budgets. Notably, cheaper energy means lower inflation. Import prices are now down 5.5% from a year ago, the biggest 12-month drop since October 2009. "Falling oil prices and a stronger dollar led prices for imported goods lower and continue to weigh on U.S. inflation," Sam Bullard, senior economist at Wells Fargo, said in a note to clients. While the U.S. is a major source of the rising global oil output, the country remains a net petroleum importer. Wednesday's report said petroleum import prices fell 16.6% in December from the previous month, the biggest drop in six years, and were down 30.1% from December 2013. Excluding petroleum, import prices rose 0.1% from the previous month and are flat from a year earlier. "Away from fuel, import prices were also soft, a sign the rising dollar is continuing to weigh on import prices," said Zina Bushra Saijid, economist at J.P. Morgan Chase. Import prices from the European Union fell 0.4% last month, while Japan posted a 0.5% drop and China was unchanged. Japan slipped into a recession this year, Europe's economy is moribund and China's growth has cooled. Import prices from major oil suppliers tumbled. Canada was down 4.7%, the sharpest drop since November 2008, and a bloc of Middle Eastern countries including Saudi Arabia, Iraq and Kuwait crashed 13.5%. The lower cost of goods from overseas is putting downward pressure on inflation. Economists are forecasting a 0.4% fall in December consumer prices when figures are released Friday. For now, negligible inflation gives the Federal Reserve room to leave interest rates near zero, where they have held since December 2008. Minutes of the Fed's Dec. 16-17 meeting, released last week, show that most officials expect inflation to fall in the coming months but then rise gradually toward the central bank's 2% annual target as the labor market improves and energy prices start to rise. "Inflation will gradually move toward the target as the transitory effects of lower oil prices fade," Philadelphia Fed President Charles Plosser said Wednesday. Write to Jeffrey Sparshott at Credit: By Jeffrey Sparshott
Subject: Recessions; Natural gas utilities; Trade deficit
Location: Japan China United States--US
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: European Union; NAICS: 926110, 92 8120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645197662
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645197662?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Copper Shouldn't Fall Down Oil's Well; Red Metal's Longer-Term Prospects Look Robust
Author: Thomas, Helen; Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
Copper, given its standing as a barometer for economic activity, tends to wilt at any sign of a slowdown, particularly in China's housing market; that trimmed its growth outlook for China to 7.1% this year provided one spark for the selloff.
Full text: Another day, another commodity in free fall. But, unlike oil, the meltdown in copper prices looks out of kilter with the metal's longer-term prospects. A sharp fall in the price of copper Wednesday left the red metal at a. Even after recovering slightly, copper is down 16% since the middle of last year, when oil started its slide. Tumbling prices for oil and iron ore have a knock-on effect as investors pull money from commodities in general. Short positions on the U.S. Comex futures market are at record levels, as investors bet on the next resource to swoon. Copper, given its standing as a barometer for economic activity, tends to wilt at any sign of a slowdown, particularly in China's housing market; that trimmed its growth outlook for China to 7.1% this year provided one spark for the selloff. Macroeconomic angst could mean further volatility, especially if Chinese economic data surprises in either direction. A seasonally quiet period for copper, as buying slows ahead of Chinese New Year in February, leaves the metal vulnerable to negative sentiment. But copper still looks more secure than. Despite slowing growth, China's imports of copper concentrate rose nearly 18% last year, according to data provider CEIC. Inventories have started to rise but not to an extent that indicates a sharp drop in final demand for the metal. The supply of copper is constrained. Big miners, including Glencore, BHP Billiton and Rio Tinto, have already cut their outlook for copper production for this year. That dents forecasts that have supply of the metal modestly outstripping demand for 2015. The anticipated start-up of new mines this year and next increases the chances of unforeseen disruptions or delays to production. The idea that oil's descent has a fundamental impact on the copper market doesn't really add up. True, lower oil prices will reduce costs for miners. But energy as a proportion of total costs is lower in copper than for other commodities, according to Macquarie, at 18% compared to 37% in iron ore, 40% in aluminum or 33% for nickel. In any case as costs fall, miners can't just ramp up copper output: The industry is effectively producing to full capacity and even brownfield expansions would take perhaps two years to bring onstream. With copper grades falling, meaning more earth must be shoveled to produce the same amount of metal, falling prices could instead make lower-grade mines or projects uneconomic. Other factors may also help support the price. Trade in scrap metal, which accounts for more than a fifth of the market, is likely to seize up. Chinese buyers, including the State Reserve Bureau, could move in to take advantage of low prices. Copper can't avoid getting caught in the commodities downdraft. But compared to other commodities, it looks less likely to languish for long. Write to Helen Thomas at and Abheek Bhattacharya at Credit: By Helen Thomas And Abheek Bhattacharya
Subject: Copper industry; Mines; Prices; Iron compounds
Location: China
Company / organization: Name: Rio Tinto Group; NAICS: 212112, 212291; Name: BHP Billiton; NAICS: 211111, 212231, 212234
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645287824
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645287824?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Brazil's Petrobras Is Hit by Oil-Price Drop, Corruption Probe; State-Run Oil Company's Aggressive Offshore Expansion Is Threatened
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Reeling from a massive , Brazil's state-run oil firm, Petróleo Brasileiro SA, faces another major challenge: are testing the economic viability of the company's deep-water oil fields. Estimated by Brazil's oil regulator to contain as much as 50 billion barrels of recoverable oil, these so-called pre-salt fields are central to Brazil's goal of becoming a Top 5 oil producer globally by 2020. But market prices hovering around $50 a barrel aren't helping. Deep-water drilling is one of the most expensive undertakings in the industry, and it grows less attractive the farther prices fall. Petrobras said last week that the break-even cost of pre-salt production is between $45 and $52. Already the world's most deeply indebted oil major, Petrobras had been counting on robust oil profits to help it bankroll an aggressive offshore expansion, aided by foreign partners looking to tap Brazil's massive underwater reserves. "It's going to be harder and harder for Petrobras to execute on this golden goose," says Michelle Foss, an energy economist at the University of Texas. The pre-salt is "very challenging and expensive even in a high-oil-price environment." A Petrobras spokeswoman says the company is still moving forward on pre-salt projects "in an economically viable way." But cutbacks loom. While it has yet to provide details, Petrobras that it would scale back an ambitious $220 billion capital-spending plan, about half of which was earmarked for development of the pre-salt fields. Unveiled in 2007, the deposits lie 200 miles off Brazil's southeastern coast, deep below the seabed and covered by the thick layer of salt for which they're named. The find was originally heralded as a bonanza that would catapult Brazil to be one of the world's top oil producers. Following the discovery, Brazil's then president, Luiz Inácio Lula da Silva, famously declared that "God is Brazilian." Pre-salt already accounts for nearly a third of the company's total production of 2.3 million barrels of oil a day. By 2020, Petrobras is looking to boost output to four million barrels a day, with the majority of that production coming from the pre-salt fields. Where it will get the funding to do so, though, isn't clear. Petrobras borrowed heavily to finance early exploration and development efforts, and it's now burdened with some $170 billion in debt, according to Moody's Investors Service. Brazil has courted outside partners to help it develop its pre-salt riches. But few oil majors have invested, turned off by Brazilian government rules, including a mandate that Petrobras be the sole operator of pre-salt fields. Brazilian officials are considering loosening those requirements. But even if that happens, it's unclear how much foreign interest there would be with oil prices so depressed. "They're in a tough spot," says Ms. Foss of the University of Texas. "International companies are going to stay clear of everything that's high cost." Further complicating the company's plans is a massive corruption scandal that has dominated headlines in Brazil since it first came to light in March. Federal investigators charge that Petrobras was at the heart of an alleged kickback scheme in which construction companies overcharged for Petrobras contracts, splitting the ill-gotten gains with Petrobras executives and local politicians. . Petrobras says that it's a victim of the alleged scam and is cooperating with investigators. The company has set up its own internal investigation, and it recently said it halted work with 23 construction companies linked to the alleged scheme while the investigation continues. The company has twice-delayed its third-quarter earnings as it works to quantify potential corruption-related write-offs. The company says it will release its unaudited third-quarter earnings this month to meet obligations to creditors and prevent a forced early payment of certain outstanding debts. Petrobras, whose shares are traded in New York, is also under investigation by the U.S. Securities and Exchange Commission and the U.S. Justice Department. The steady stream of bad news has battered Petrobras shares, which have fallen 55% in the past six months. The company's bonds are trading near record lows. Late last year, Moody's Investor Service downgraded the company's baseline credit to Ba1 from Baa3 and its foreign and local currency debt ratings to Baa2 from Baa1. Petrobras debt remains investment grade. But the swoon has prompted Brazil's government to declare it will guarantee the company's debt if necessary. All of these factors are weighing on Petrobras' plans for the future. The company "might not be able to deliver on some of their 2020 targets," says Ricardo Bedregal, an analyst in Rio de Janeiro with consultancy IHS. "I think it will be difficult for them." Write to Will Connors at Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164 5317457
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645317457?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Fed's Beige Book: Continued Growth, but Some Slowing in Oil-Producing Areas; Survey Sees More Hiring, but Little Pressure Pushing Wages or Prices Higher
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
In the Kansas City district, the number of oil rigs declined and "future drilling activity, employment and capital expenditures were projected to be significantly lower in response to lower oil prices," the report said.
Full text: Energy-rich regions of the U.S. are seeing signs of slower growth due to the plunge in oil prices, though the national economy continued to expand in late 2014, the Federal Reserve said in its latest survey of regional economic conditions. The Fed found "modest" or "moderate" growth across most of its 12 districts in mid-November through late December, according to released Wednesday. Payrolls "expanded moderately" across "a variety of sectors," the report said, though pay remained stagnant for most workers. "Significant wage pressures were largely limited to workers with specialized technical skills," it said. In areas where energy production has boomed in recent years, since mid-2014 is generating worries about a slowdown. The Dallas district reported slower overall economic growth, with "more uncertainty and generally less optimism in outlooks," according to Wednesday's report. Demand for oil-field services was lower, especially in the Permian Basis in West Texas, and "a few energy firms reported hiring freezes and layoffs," it said. The Minneapolis district saw less oil and gas exploration in Montana and North Dakota in late December compared with a month earlier. In the Kansas City district, the number of oil rigs declined and "future drilling activity, employment and capital expenditures were projected to be significantly lower in response to lower oil prices," the report said. But Fed officials have said, on balance, the drop in oil prices for U.S. consumers and the economy as a whole. "It is putting more money in their pockets, having to spend less on gas and energy, and so in that sense it's like a tax cut that boosts their spending power," Chairwoman Janet Yellen said in December. in December, the Commerce Department said earlier Wednesday. The Fed's report, however, described consumer spending as increasing in late 2014 across most of the country. The Atlanta district said cheaper gas stoked demand for "new, larger vehicles" at auto dealerships. The Chicago district said holiday-season sales exceeded expectations in part due to lower gas prices. "Contacts attributed stronger overall holiday sales to continued improvement in employment conditions and decreases in gas prices," the San Francisco district reported. "Many contacts are optimistic that these developments will continue to spur retail spending in 2015." In the New York district, while retailers reported "generally sluggish" sales into December, most also said that "sales did pick up toward the latter part of the month, especially in the week after Christmas," the report said. The beige book, a survey of anecdotal information about the economy, was released ahead of the Fed's Jan. 27-28 policy meeting in Washington. The central bank's top officials are debating the timing and pace of interest-rate increases that are widely expected to begin . Action isn't expected this month. Ms. Yellen said in December that it was at its January or March meetings. The central bank has kept short-term interest rates pinned near zero since December 2008 to bolster the economy through the financial crisis, the recession and the slow recovery that followed. Now, Fed policy makers must weigh rapid improvement in the labor market--including to a fresh postrecession low of 5.6% in December--against sluggish price and wage growth in deciding when to begin tightening credit. U.S. inflation has undershot the central bank's 2% target for . Lower oil prices have further depressed inflation readings. Fed officials, however, have said they expect inflation will gradually move back toward its 2% goal over time. Wednesday's report described prices as having "increased slightly" in late 2014. The , released on Dec. 2 characterized inflation as "subdued." The latest Fed survey also reported "mixed"agricultural conditions across the country, an increase in demand for business and consumer credit, an expansion of manufacturing activity, and a pickup in travel and tourism spending. While the residential real estate sector remained "largely flat,"the report said, commercial real estate activity expanded in most areas. Sarah Portlock contributed to this article. Write to Ben Leubsdorf at Credit: By Ben Leubsdorf
Subject: Central banks; Petroleum industry; Prices; Capital expenditures; Recessions
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645348609
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645348609?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
CSX Sees Stable Oil-by-Rail Business, 2015 Double-Digit Per-Share Profit Rise; Railroad Says Lower Oil Prices Should Benefit Economy and Be Very Positive for Company
Author: Stevens, Laura
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
CSX experienced a "supercharged" boost from fuel surcharges the company bills its customers, as the wholesale price of fuel it paid decreased more quickly than the highway diesel-fuel price index used for most of the company's surcharge calculations, according to Sanford C. Bernstein & Co. analysts, a net benefit of approximately $39 million.
Full text: The plunging price of oil won't affect CSX Corp.'s crude-by-rail business in 2015, executives said on Wednesday. Oil could fall as low as $35 per barrel in price before it might affect the amount of oil flowing out of the Bakken Shale to the East Coast, executives said during a fourth-quarter earnings call. Currently, crude-by-rail represents less than 2% of CSX's total business, but the about 3.5 trains dispatched for the transport of crude oil a day should stay steady "and maybe even grow a bit" through 2015, Chief Executive Michael Ward said. The company's business transporting fracking sand to natural gas drilling areas is also expected to be unaffected. Lower oil prices should fuel growth. "It's a positive experience for the American taxpayer, for the American economy," said Clarence Gooden, chief commercial officer. "So I think lower crude oil prices is very positive for our economy and very positive for CSX." The company said it expects double-digit growth in earnings per share for 2015, as merchandise and intermodal volumes grow at a faster pace than the economy and as the railroad increases prices for its services. CSX should also generate as much as $200 million in productivity savings, higher than in recent years. About 15% of the savings will be generated by better weather, and $50 million are linked to a workforce reduction program. The company also plans to invest $2.5 billion in its business this year, up from a planned $2.3 billion in 2014. It plans to spend about 17% of revenue on such items as new locomotives and infrastructure. Despite diesel prices falling, which has made road-transport pricing more competitive with rail, CSX expects this year it will again gain market share from its highway-bound competition, executives said. Although analysts have said some shippers could opt for trucking, especially in the first quarter, CSX executives said their customers hadn't expressed any interest in switching. A Wolfe Research fourth-quarter survey found that in the previous six months, shippers were switching to truck transport at a higher rate than to rail for the first time since 2010. The biggest issue preventing any broad switch back to trucking by shippers is a , which has tightened capacity in that industry, the CSX executives said. "Most people that I'm aware of don't want their sons to grow up to be truck drivers," Mr. Gooden said. It can be an unattractive job because drivers are away from home for long periods, among other things. "It's more than just having the capacity itself. It's all the issues that surround it," Mr. Gooden added. CSX experienced a "supercharged" boost from fuel surcharges the company bills its customers, as the wholesale price of fuel it paid decreased more quickly than the highway diesel-fuel price index used for most of the company's surcharge calculations, according to Sanford C. Bernstein & Co. analysts, a net benefit of approximately $39 million. While it was a boost in the fourth quarter, the surcharge factor will detract from earnings once fuel prices start increasing again, CSX executives said, as there is a two-month lag in calculating surcharges. "Overall, the fuel surcharge is working well," said CFO Fredrik Eliasson. "And we think that we are neutral to any sort of price volatility, with the exception of the lag effect." Lower fuel surcharges should also help the company to push through price increases, executives said. CSX on Tuesday reported a , while revenue increased 5.3% to $3.19 billion. Write to Laura Stevens at Credit: By Laura Stevens
Subject: Crude oil prices; Earnings per share; Surcharges; Energy economics; Gasoline prices
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645384745
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645384745?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Schlumberger Slumps on Oil; Fourth-Quarter Results to Offer Peek at Damage
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
The key number for Schlumberger, besides the average price of crude going forward, is how sharply exploration and production companies slash capital expenditure in 2015.
Full text: They say it is the people selling picks and shovels who ultimately do well in a gold rush. But those helping make the rush for black gold possible, oil-field services companies, are suddenly stuck with loads of excess inventory. Schlumberger Ltd., the largest in the world and the purveyor of the shiniest tools in the business, has been hit hard. Even so, it is holding up better than most peers; its shares are off less than 35% since peaking in June. Thursday's fourth-quarter results will give an early peek at the damage to its business from the plunge in crude prices. The earnings impact from slashed exploration budgets by energy companies globally will have been slight so far, though Schlumberger did announce an $800 million write-down in December as it reduced its fleet of seismic imaging ships. Excluding that, analysts see it having earned $1.46 a share for the period, up from $1.32 a year earlier. The key number for Schlumberger, besides the average price of crude going forward, is how sharply exploration and production companies slash capital expenditure in 2015. Analysts at Barclays think global spending will shrink by 9% after growing by 6% in 2014. But they say that North American companies, many of which produce high-cost shale oil and gas, plan to cut spending by 14%. By contrast, national oil companies in the Middle East, among the largest Schlumberger clients, may not reduce spending at all. Even so, Schlumberger is exposed to industry misery with plenty of business in North America and a leading position in Russia. Plus, it already had problems getting paid for work in Venezuela before oil prices plunged. What's more, spending forecasts are subject to revision. Barclays bases its numbers on average crude prices between $65 and $75 a barrel in 2015, or $20 to $30 a barrel higher than today. Even $50 crude could translate to a far sharper, 30% spending cut, it says. Being the first oil-field services provider to report, Schlumberger's comments will be parsed carefully. Expect to hear how its client list and technology put it on higher ground than peers. Even so, powerful-enough tremors from the earthquake in energy prices will put more cracks in Schlumberger's foundation. Credit: By Spencer Jakab
Subject: Petroleum industry; Crude oil prices; Oil service industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645399727
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645399727?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Nasdaq Considers New Energy Futures Initiative; New Project Would Allow Trading of Oil, Gas and Power Futures
Author: Hope, Bradley
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
The company is consulting with energy traders and brokers about a new project that would allow clients to buy and sell crude oil, natural gas and U.S. power futures, according to a document reviewed by The Wall Street Journal.
Full text: Nasdaq OMX Group Inc. is weighing an attack on competitors that dominate the trading of oil and gas futures, according to people familiar with the matter. The company is consulting with energy traders and brokers about a new project that would allow clients to buy and sell crude oil, natural gas and U.S. power futures, according to a document reviewed by The Wall Street Journal. Several large banks including J.P. Morgan Chase & Co. have already signed up to try out the initiative, according to people familiar with the matter. The project is known inside the company as Nasdaq Energy Futures, according to the document. The push into energy futures would pit Nasdaq against two major energy exchange operators, Intercontinental Exchange Inc. and CME Group Inc., which have dominated that business for years. Futures are contracts to buy or sell certain underlying assets at a given price on a specific expiration date. They are often used to protect against unexpected market swings or to speculate on coming price moves. The goal is to undercut Nasdaq rivals with "competitive fees compared to current market price for trading and clearing of energy products," the Nasdaq Energy Futures document said. Trades would be cleared by Options Clearing Corporation, the document said Nasdaq said in a statement that it "works closely with customers to understand the demands of the marketplace and opportunities to provide customers with competitive alternatives and greater efficiencies that leverage our technology and expertise." The project is still in the market consultation phase, a source familiar with the project said. Nasdaq Energy Futures would use an existing futures exchange Nasdaq acquired when it bought the Philadelphia Stock Exchange in 2007 for about $650 million. The Financial Times on Wednesday first reported Nasdaq's efforts to launch a new energy trading venue. Write to Bradley Hope at Credit: By Bradley Hope
Subject: Energy industry; Energy policy
Location: United States--US
Company / organization: Name: CME Group; NAICS: 523210; Name: Intercontinental Exchange Inc; NAICS: 523210; Name: Financial Times; NAICS: 511110; Name: Philadelphia Stock Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645419558
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645419558?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada's Banks Try to Downplay Exposure to Energy; Chief Executives Say Protracted Period of Lower Oil Prices Would Be Manageable
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
Bank stocks have taken a beating on those worries with the S&P/TSX Composite Bank Index down about 8% year-to-date as of Wednesday afternoon, amid broader concerns about on the Canadian economy of a prolonged slump in energy prices.
Full text: Canada's biggest banks are trying to quell investor concern about their exposures to the energy sector given the plunge in oil prices. Bank stocks have taken a beating on those worries with the S&P/TSX Composite Bank Index down about 8% year-to-date as of Wednesday afternoon, amid broader concerns about on the Canadian economy of a prolonged slump in energy prices. The chief executives of Canada's five biggest banks addressed an industry conference in Toronto to provide details about their respective energy exposures, and all joined in a common refrain: A protracted period of lower would be manageable for them. "We're not panicking," Brian Porter, chief executive of the Bank of Nova Scotia, told delegates. The oil-price collapse is likely a "six- to 18-months dilemma," he said. Scotiabank's direct oil and gas exposure is 12.8 billion Canadian dollars, or 2.9% of total loans, according to Mr. Porter. Its undrawn exposure amounts to about C$10 billion. Banks are now stress-testing their portfolios to simulate the fallout from an extended rout in oil prices. Even if prices were to coast at lower levels for two years, Canadian Imperial Bank of Commerce's energy exposure would be manageable, said Chief Executive Victor Dodig. Still, Mr. Dodig is predicting that energy companies will make further cuts to capital expenditures and dividends to meet their loan covenants. "I think that you'll see over the next six to 12 months, there'll be clients that are looking for covenant relief," he said. CIBC's oil and gas portfolio is valued at C$5.2 billion, or 2% of total loans. Its undrawn exposure is valued at C$8.4 billion, he said. RBC, Canada's biggest bank by market capitalization, has an energy portfolio valued at C$9.6 billion, which amounts to 2.1% of the bank's total loans. Additionally, its undrawn exposure is valued C$22.2 billion. At Toronto-Dominion Bank, the biggest bank by assets, energy exposure, including pipelines along with oil and gas, is put at C$3.6 billion or 0.7% of total loans. Its undrawn exposure is C$5.7 billion. Bank of Montreal's oil and gas portfolio is estimated at C$5.9 billion, or 1.9% of total loans. Its undrawn exposure is C$6.9 billion. Although all of the banks' direct exposure to the energy sector is under 3% of total loans, their "indirect exposure is much broader considering all the related industries and that feed into the oil business," wrote Meny Grauman of Cormark Securities Inc. in a recent note to clients. The of lower oil prices, including on the retail operations of Canadian banks, are much harder to predict. Although the numbers vary by bank, big lenders have on average 20% of their total Canadian loans, including credit cards and mortgages, in Alberta and other Prairie provinces. Consumer sentiment, which fuels spending, home purchases and borrowing, is part psychology. In recent days, there has been a steady drumbeat of bad news coming out of Alberta. Oil and gas companies are cutting back on spending in the oil patch, and there is growing concern about the potential for more job cuts in Alberta. Premier Jim Prentice has also raised the specter of , including the introduction of a provincial sales tax, to offset declining government revenue as a result of plummeting oil prices. Home sales in Calgary are also expected to fall by 4% in 2015, according to a new forecast by the Calgary Real Estate Board. In December, housing resales fell 7.5% year-over-year, while new listings rose sharply, by 42%. "The slump in world oil prices will hit oil-producing regions hard, and it won't be long before housing activity and prices begin to fall significantly in Calgary," wrote David Madani of Capital Economics in a report Wednesday. Write to Rita Trichur at Credit: By Rita Trichur
Subject: Energy industry; Banking industry; Prices; Loans; Capital expenditures; Natural gas utilities
Location: Canada
People: Porter, Brian
Company / organization: Name: Canadian Imperial Bank of Commerce; NAICS: 522110; Name: Bank of Montreal; NAICS: 522110; Name: Toronto-Dominion Bank; NAICS: 522110; Name: Bank of Nova Scotia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645426685
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645426685?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
North Dakota's Oil Production Rises to New Record; Higher Output Comes Even as Companies Drill Fewer Wells Amid Tumbling Oil Prices
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Jan 2015: n/a.
Abstract:
The North Dakota Industrial Commission, which regulates the state's energy industry, put flaring targets in place after environmental and community groups complained about the high gas burning levels compared to other states.
Full text: North Dakota oil production rose to a record in November, even as energy companies drilled fewer wells and the rig count dropped to a near five-year low, state officials said. Energy companies in North Dakota's prolific Bakken formation are dialing back how much they spend on exploring for new oil deposits because crude prices are languishing. But there is more oil flowing from fewer wells as companies tap only their most promising and profitable reserves. Oil output across the state hit a record 1.19 million barrels a day in November, the most recent month available, according to data released Wednesday by the state's Department of Mineral Resources. North Dakota is the second-largest U.S. crude producer behind Texas, but the drop in oil prices over the last six months from more than $100 a barrel to less than $50 has spurred a rapid decline in the number of rigs drilling for oil. Despite the new output record, the head of North Dakota's Department of Mineral Resources warned the state's crude production will peak and decline later this year if oil prices don't rebound. The U.S. benchmark crude price is West Texas Intermediate, which traded below $45 a barrel earlier this week and closed Wednesday afternoon at $48.48. That level is almost 60% below where U.S. oil was trading at the end of June. Bakken crude fetches an even lower price, in part because the oil is pumped far from the coastal refineries that buy it. The price of a barrel of North Dakota sweet crude is $29.25 a barrel, the lowest level since December 2008 and down from an all-time high of $136.29 set in July 2008, according to state data. North Dakota's drilling rig count was 158 as of Wednesday, the lowest in nearly five years and down from a high of 218 rigs in 2012. The state's rig count is expected to keep dropping, to below 125 by the third quarter unless oil prices increase, said Lynn Helms, director of the Department of Mineral Resources. But oil production may not start to drop until the rig count falls to 130 or lower, Mr. Helms added. In another sign of slowing growth, the November number of North Dakota oil wells drilled but not completed increased by 125 wells from October to 775, state data show. "I expect that number to grow," Mr. Helms said. Some companies have delayed how quickly they bring new wells online in the hope that the crude price will rise later this year. The amount of natural gas that was burned off amounted to 25% of the state's total gas production, narrowly meeting a new target for North Dakota to decrease its flaring rate. The targeted flaring ratio of 26% fell to 23% starting in January and is set to drop to 15% by 2016. Mr. Helms said the state won't consider delaying the enforcement of flaring rules until June, depending on industry feedback about the likelihood of meeting the next goal. The North Dakota Industrial Commission, which regulates the state's energy industry, put flaring targets in place after environmental and community groups complained about the high gas burning levels compared to other states. Texas, the only state that produces more oil than North Dakota, flares just 0.8% of the gas it produces, according to the Railroad Commission of Texas. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Petroleum industry; Natural gas; Crude oil prices; Petroleum production
Location: Texas United States--US North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 14, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645426689
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645426689?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
EPA Set to Regulate Oil and Gas Methane Emissions; Proposal Would Be First-Ever Direct Regulation on Methane
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration.
Full text: WASHINGTON--The Obama administration unveiled plans Wednesday to regulate methane emissions from the nation's oil and natural-gas industry for the first time, a move aimed at meeting climate-change goals while not hampering the nation's energy boom. The Environmental Protection Agency plans to propose federal regulations to cut methane emissions from the oil and gas sector by 40% to 45% over the next decade from 2012 levels, White House and agency officials said Wednesday. The rules, scheduled to be proposed this summer and completed by 2016, would apply only to new or modified sites. For existing oil and gas operations, the EPA is set to rely mostly on voluntary measures to cut methane, a move backed by the industry. To reduce emissions, companies would have to install technology that prevents methane from being inadvertently leaked and monitor their operations for possible leaks. Many companies are already using this kind of equipment, according to industry executives and the EPA. The new regulations are designed to help the administration meet a commitment it made in Beijing in November to reduce U.S. greenhouse-gas emissions, as well as to bring political momentum to a United Nations summit this year where world leaders will decide whether to create a new climate agreement. Administration officials say the EPA rules wouldn't hamper the growth of the oil and gas industry, a big economic driver during President Barack Obama's tenure. That view is shared by at least some energy executives. "I don't see this as having a significant cost impact on our company at all," said Mark Boling, an executive vice president at Houston-based Southwestern Energy Co., one of the nation's largest producers of natural gas. Mr. Boling added that while low oil and natural-gas prices present cost challenges to the industry, they are unlikely to have a deciding impact on how this regulation bears out on a broader scale. "I don't see it having a negative impact on the oil and natural-gas boom here at all," he said. The action announced Wednesday represents a sort of middle ground between what environmental groups wanted and what the oil and natural-gas industries said they could support, though the administration left the door open for more expansive regulation later on. While cheering the EPA's move toward regulation, some environmental groups criticized the administration for not regulating existing sources. However, the Clean Air Act would legally trigger regulation on existing sources eventually if the agency pursues rules affecting new sources. "The administration is proposing to fight methane pollution with one hand tied behind its back, not using the full range of powers under the Clean Air Act to cut these emissions," said Conrad Schneider, advocacy director of the Clean Air Task Force. Despite skepticism from some environmentalists, the administration has supported natural gas as an energy source in part because it puts out fewer carbon emissions than coal or oil. The regulations will "allow the industry to continue to grow and provide a vital source of energy for Americans across the country," Janet McCabe, the EPA's acting assistant administrator for air and radiation, said Wednesday. At the same time, the administration and environmental groups are increasingly worried about the effects of natural-gas use on climate change as the U.S. produces more of the fuel. Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration. Methane emissions from the sector have dropped roughly 15% over that period through 2012, according to EPA data, but the agency estimates that these emissions will rise 25% over the next decade if steps aren't taken to cut them. The EPA's announcement Wednesday included action on two regulatory fronts. In addition to directly regulating methane, the EPA plans to expand a rule it imposed on the oil and gas industry in 2012 that focused on reductions of traditional pollutants, which had the side benefit of cutting methane. Oil and gas companies had expressed support for expanding that 2012 regulation and beefing up voluntary measures. With its new methane rule, the agency went further than what many in the industry wanted. To regulate new oil and gas sources, the EPA is using the same part of the Clean Air Act it already uses to regulate carbon emissions from power plants, a controversial plan that is a top target of congressional Republicans and some Democrats. Trade groups representing the oil and gas industry were more critical than some individual companies of Wednesday's announcement. Marty Durbin, CEO of America's Natural Gas Alliance, a trade group representing natural-gas producers including Southwestern, said he was "disappointed the administration is choosing to take a regulatory approach that will take years to implement, rather than a cooperative approach with the industry that we believe will ultimately result in greater emissions reductions in a shorter time frame." Reaction on Capitol Hill was split--with Republicans, who now control both chambers of Congress, criticizing the move and vowing swift oversight, and Democrats commending the administration's actions. "The EPA has once again announced plans to impose a mandate designed to stifle our domestic energy industries despite the successful voluntary steps made by U.S. oil and gas companies to reduce methane emissions," Senate Environment and Public Works Chairman James Inhofe (R., Okla.) said in a statement Wednesday. Many independent analysts concluded the EPA's actions were, for now anyway, a positive result for the oil and gas industry because the rules could have been more expansive. ClearView Energy Partners, a nonpartisan energy analysis firm whose clients include institutional investors and corporations involved in the oil and gas industry, said in a research note that the outcome is "generally beneficial for industry." The firm added, though, that environmental groups might try to sue to force the EPA into regulating existing sources, a move universally opposed by the oil and gas industry. Meanwhile, later this year, the Transportation Department is planning to propose natural-gas pipeline standards and the Interior Department is slated to establish a standard for companies to limit how much methane they waste when drilling for oil and gas on public lands. Write to Amy Harder at Credit: By Amy Harder
Subject: Environmental protection; Emissions; Environmental regulations; Petroleum industry; Regulation; Climate change; Petroleum production; Natural gas utilities; Regulatory agencies
Location: United States--US
People: Obama, Barack
Company / organization: Name: United Nations--UN; NAICS: 928120; Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645430269
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645430269?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pacific Rubiales Woes Could Hurt Colombian Economy; Oil Company Represents Largest In South American Country
Author: Sara Schaefer Muñoz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract: None available.
Full text: BOGOTÁ, Colombia--The share price of the largest independent oil company in Colombia hit a five-year low on Wednesday, raising questions about the future of an energy producer that has been a vital generator of tax revenue here. Pacific Rubiales's stock is down nearly 90% from its peak in 2011, when the Canadian company was a Wall Street darling. On Wednesday, the price fell to 3.45 Canadian dollars ($2.89) on the Toronto Stock Exchange, before closing at C$4.21. That was down 9.46% from the previous day. Analysts say the firm has now been hit by a perfect storm of falling oil prices, an inability to develop significant fresh oil fields and its debt load of about $4.5 billion that Pacific Rubiales accumulated through acquisitions and infrastructure spending. "Investors are concerned about what Rubiales can do to turn around," said Nathan Piper, an analyst at RBC Capital Markets, noting that for now, the company isn't producing enough cash to cover expenditures. "It's going to be a very difficult time." Even amid a fall in world oil prices that has pummeled producers, Pacific Rubiales stands out. The Toronto Stock Exchange Energy Index is down 11.35% year to date, while Pacific Rubiales's share price has fallen 43% in the same period. The company's woes are a dramatic change in fortunes. Led by former executives of Venezuela's state oil industry who fled Venezuela's socialism over the past decade, Pacific shot to prominence after it was founded in 2008. Most of its revenues have come from extracting heavy oil from Colombia's eastern fields. Its market capitalization climbed to $8 billion, the company's production success was splashed across the business press in Colombia and its executives built sprawling weekend homes. The firm further raised its profile by sponsoring the national soccer team and an annual PGA Golf Championship in Colombia in recent years. On Wednesday evening, the company put out a statement in response to the share price fall, saying that it will reduce its 2015 capital expenditures from the previously announced $1.5 billion to between $1.1 and $1.3 billion. The statement also said that while this year's production will be lower than the company previously said, it will be still be higher than 2014 levels. "Pacific Rubiales remains fully focused on maintaining liquidity in this environment, by significantly reducing costs and also reducing capital expenditures by $200 to $400 million," said Chief Executive Ronald Pantin. "Furthermore, we have additional flexibility from our $1.0 billion revolving credit facility, which is currently undrawn." Analysts point out that the company also has various assets it can sell to generate cash, though they caution that lower oil prices have made the market for such sales tepid. Being an oil producer in Colombia was lucrative with prices around $100 a barrel. But analysts say that with prices down more than 50%, it is harder to turn a profit, and even more so in Colombia due to the lack of infrastructure. Most oil is transported in trucks on narrow roads, adding to production costs. The company's woes have also driven down the prices of its bonds in the past month to a low of about 65 cents on the U.S. dollar compared with nearly near 95 cents three months ago. Analysts say lower oil prices could make the company's debt grow too large in relation to earnings, violating rules agreed to with bondholders. If these rules, or covenants, are breached, it would be difficult for Pacific to issue new debt. Company spokesman Frederick Kozak said that the bond concerns are without merit, because Pacific's debt ratio is still significantly below the levels of a covenant breach. He added that company has four years before it needs to start paying down debt. Any problems at Pacific Rubiales have implications for Colombia's economy, which the Finance Ministry says is Latin America's third-largest. In recent years, petroleum has grown to account for more than 50% of exports, most coming from Pacific Rubiales and state-owned producer Ecopetrol S.A. President Juan Manuel Santos has said that royalties from the oil companies generate much of the country's social and development spending. Today, Pacific Rubiales is so weakened that it is a takeover target, according to Sebastian Gallegos, an oil and gas sector analyst at Credicorp Capital in Bogotá. "The situation is not sustainable in the long-term," he said. Chester Dawson contributed to this article. Write to Sara Schaefer Muñoz at Credit: By Sara Schaefer Muñoz
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645430271
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645430271?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop Amid Ample Supplies; Concerns Over Crude Glut Continue to Weigh on Market
Author: Friedman, Nicole; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
Concerns about ample global oil supplies and the U.S. dollar's gains against other currencies sent the market back into losses Thursday, said Gene McGillian, an analyst at Tradition Energy.
Full text: Oil prices fell Thursday, erasing the gains from Wednesday's rally, as continued concerns about a glut of crude weighed on the market. Light, sweet crude for February delivery, the U.S. benchmark, settled down $2.23, or 4.6%, at $46.25 a barrel on the New York Mercantile Exchange. Brent crude for February delivery fell $1.02, or 2.1%, to $47.67 a barrel on the ICE Futures Europe exchange. Both benchmarks posted their largest one-day percentage gains since 2012 on Wednesday, as traders took profits and closed out options positions ahead of a contract expiration. Prices rose above $50 a barrel early Thursday but slumped later in the session. "After yesterday's little jaunt and the spike this morning, we could be headed even lower," said Stephen Schork, editor of The Schork Report, an industry publication. The market's failure to hold above $50 a barrel "could be the catalyst, that we get a run back down toward $42," he said. Oil markets have fallen by more than half since their June peak, as fears of oversupply of crude, coupled with tepid demand, engulfed the market. The market has fallen so far that it is vulnerable to people trying to pick a bottom, which has created volatile swings in recent months. "Guys are looking for any reason this thing could bottom out," said Peter Donovan, broker for Liquidity Energy in New York. Concerns about ample global oil supplies and the U.S. dollar's gains against other currencies sent the market back into losses Thursday, said Gene McGillian, an analyst at Tradition Energy. U.S. inventory data released Wednesday showed total U.S. crude-oil and petroleum-product supplies at 1.16 billion barrels, a record high in weekly data going back to 1990. Oil is traded in dollars, so a strong dollar makes oil more expensive to buyers using foreign currencies. Bank of America Merrill Lynch lowered its price forecasts Thursday. The bank now sees Brent crude falling as low as $31 a barrel, and U.S. oil prices tumbling to $32, by the end of the first quarter as global petroleum inventories continue to fill up. Gasoline futures for February delivery settled down 5.13 cents, or 3.8%, at $1.2994 a gallon. February diesel lost 3.19 cents, or 1.9%, to $1.6233 a gallon, the lowest settlement since July 2009. Georgi Kantchev contributed to this article Write to Nicole Friedman at Credit: By Nicole Friedman And Timothy Puko
Subject: Petroleum industry; Crude oil prices; Crude oil
Location: United States--US
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645506783
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645506783?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: CSX: Price Drop Won't Hurt Oil-Train Shipments
Author: Stevens, Laura
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: B.3.
Abstract:
CSX experienced a "supercharged" boost from fuel surcharges the company bills its customers as the wholesale price of fuel it bought decreased more quickly than the highway diesel-fuel price index used for most of the company's surcharge calculations, according to Sanford C. Bernstein & Co., a net benefit of approximately $39 million.
Full text: The plunging price of oil won't affect CSX Corp.'s crude-by-rail business in 2015, executives said on Wednesday. Oil could fall as low as $35 a barrel in price before it might affect the amount of oil flowing out of the Bakken Shale to the East Coast, executives of the Jacksonville, Fla., railroad operator said during a fourth-quarter earnings call. Currently, crude-by-rail represents less than 2% of CSX's total business, but the about 3.5 trains a day dispatched for the transport of crude oil should remain steady "and maybe even grow a bit" through 2015, Chief Executive Michael Ward said. The company's business transporting fracking sand to natural gas drilling areas also is expected to be unaffected. Lower oil prices should fuel growth. "It's a positive experience for the American taxpayer, for the American economy," said Clarence Gooden, chief commercial officer. "So I think lower crude oil prices is very positive for our economy and very positive for CSX." The company said it expects a double-digit percentage gain in earnings per share for 2015 as some volumes grow at a faster pace than the economy and as it increases prices for its services. CSX also should generate as much as $200 million in productivity savings, higher than in recent years. About 15% of the savings will be generated by better weather, and $50 million out of a workforce reduction program. The company also plans to invest $2.5 billion in its business this year, up from about $2.3 billion in 2014. It plans to spend about 17% of revenue on such items as new locomotives and infrastructure. Despite diesel prices falling, which has made road-transport pricing more competitive with rail, CSX expects this year it will again gain market share from its highway-bound competition, executives said. Analysts have said some shippers could opt for deliveries by truck, especially in the first quarter, CSX said its customers hadn't expressed any interest in switching. A Wolfe Research fourth-quarter survey found that in the previous six months, shippers were switching to truck transport at a higher rate than to rail for the first time since 2010. The biggest issue preventing any broad switch to trucking is a severe shortage of drivers, which has tightened capacity in that industry, CSX executives said. "Most people that I'm aware of don't want their sons to grow up to be truck drivers," Mr. Gooden said. It can be an unattractive job because drivers are away from home for long periods. "It's more than just having the capacity itself. It's all the issues that surround it," Mr. Gooden added. CSX experienced a "supercharged" boost from fuel surcharges the company bills its customers as the wholesale price of fuel it bought decreased more quickly than the highway diesel-fuel price index used for most of the company's surcharge calculations, according to Sanford C. Bernstein & Co., a net benefit of approximately $39 million. While it was a boost in the fourth quarter, the surcharge factor will detract from earnings once fuel prices start increasing again, CSX executives said, as there is a two-month lag in calculating surcharges. "Overall, the fuel surcharge is working well," said CFO Fredrik Eliasson. "And we think that we are neutral to any sort of price volatility, with the exception of the lag effect." Lower fuel surcharges should also help the company to push through price increases, executives said. CSX on Tuesday reported a 15% increase in profits to $491 million, while revenue increased 5.3% to $3.19 billion. Credit: By Laura Stevens
Subject: Crude oil prices; Company reports; Earnings forecasting; Gasoline prices; Financial performance; Surcharges; Railroad transportation
Company / organization: Name: CSX Corp; NAICS: 482111
Classification: 3100: Capital & debt management; 8350: Transportation & travel industry; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Jan 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645510690
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645510690?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission .
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Nasdaq Readies a Push Into Oil and Gas Futures
Author: Hope, Bradley
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: C.3.
Abstract:
The company is consulting with energy traders and brokers about a project that would allow clients to buy and sell crude oil, natural gas and U.S. power futures, according to a document reviewed by The Wall Street Journal.
Full text: Nasdaq OMX Group Inc. is weighing an attack on competitors that dominate the trading of oil and gas futures, according to people familiar with the matter. The company is consulting with energy traders and brokers about a project that would allow clients to buy and sell crude oil, natural gas and U.S. power futures, according to a document reviewed by The Wall Street Journal. Several large banks, including J.P. Morgan Chase & Co., already have signed up to try out the initiative, according to people familiar with the matter. The project is known inside the company as Nasdaq Energy Futures, according to the document. The push into energy futures would pit Nasdaq against two major energy-exchange operators, Intercontinental Exchange Inc. and CME Group Inc., which have dominated that business for years. Futures are contracts to buy or sell certain underlying assets at a given price on a specific expiration date. They often are used to protect against unexpected market swings or to speculate on coming price moves. The goal is to undercut Nasdaq rivals with "competitive fees compared to current market price for trading and clearing of energy products," the Nasdaq Energy Futures document said. Trades would be cleared by Options Clearing Corp., the document said Nasdaq said in a statement that it "works closely with customers to understand the demands of the marketplace and opportunities to provide customers with competitive alternatives and greater efficiencies that leverage our technology and expertise." The project still is in the market-consultation phase, a person familiar with the project said. Nasdaq Energy Futures would use an existing futures exchange Nasdaq acquired when it bought the Philadelphia Stock Exchange in 2007 for about $650 million. The Financial Times on Wednesday reported Nasdaq's efforts to launch a new energy-trading venue. Credit: By Bradley Hope
Subject: Energy industry; Energy policy; Competition; Futures trading; Energy resources
Location: United States--US
Company / organization: Name: Options Clearing Corp; NAICS: 523210; Name: CME Group; NAICS: 523210; Name: Intercontinental Exchange Inc; NAICS: 523210; Name: Financial Times; NAICS: 511110; Name: Philadelphia Stock Exchange; NAICS: 523210; Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Nasdaq OMX Group Inc; NAICS: 523210
Classification: 1510: Energy resources; 8130: Investment services; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2015
Publication date: Jan 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645510706
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645510706?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News: Methane Curbs Planned for Oil, Gas Sector
Author: Harder, Amy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: A.6.
Abstract:
Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration.
Full text: The Obama administration unveiled plans Wednesday to regulate methane emissions from the nation's oil and natural-gas industry for the first time, a move aimed at meeting climate-change goals while not hampering the nation's energy boom. The Environmental Protection Agency plans to propose federal regulations to cut methane emissions from the oil and gas sector by 40% to 45% over the next decade from 2012 levels, White House and agency officials said Wednesday. The rules, scheduled to be proposed this summer and completed by 2016, would apply only to new or modified sites. For existing oil and gas operations, the EPA is set to rely mostly on voluntary measures to cut methane, a move backed by the industry. To reduce emissions, companies would have to install technology that prevents methane from being inadvertently leaked and monitor their operations for possible leaks. Many companies are already using this kind of equipment, according to industry executives and the EPA. The new regulations are designed to help the administration meet a commitment it made in Beijing in November to reduce U.S. greenhouse-gas emissions, as well as to bring political momentum to a United Nations summit this year where world leaders will decide whether to create a new climate agreement. Administration officials say the EPA rules wouldn't hamper the growth of the oil and gas industry, a big economic driver during President Barack Obama's tenure. That view is shared by at least some energy executives. "I don't see this as having a significant cost impact on our company at all," said Mark Boling, an executive vice president at Houston-based Southwestern Energy Co., one of the nation's largest producers of natural gas. The action announced Wednesday represents a sort of middle ground between what environmental groups wanted and what the oil and natural-gas industries said they could support, though the administration left the door open for more expansive regulation later on. While cheering the EPA's move toward regulation, some environmental groups criticized the administration for not regulating existing sources. However, the Clean Air Act would trigger regulation on existing sources eventually if the agency pursues rules affecting new sources. "The administration is proposing to fight methane pollution with one hand tied behind its back, not using the full range of powers under the Clean Air Act to cut these emissions," said Conrad Schneider, advocacy director of the Clean Air Task Force. Despite skepticism from some environmentalists, the administration has supported natural gas as an energy source in part because it puts out fewer carbon emissions than coal or oil. At the same time, the administration and environmental groups are increasingly worried about the effects of natural-gas use on climate change as the U.S. produces more of the fuel. Administration officials note that methane, a primary component of natural gas, has a warming effect on the planet more than 20 times greater than carbon dioxide. Since 2005, domestic oil production has nearly doubled and natural-gas production has risen by about 50%, according to the U.S. Energy Information Administration. Methane emissions from the sector have dropped roughly 15% over that period through 2012, according to EPA data, but the agency estimates that these emissions will rise 25% over the next decade if steps aren't taken to cut them. Trade groups representing the oil and gas industry were more critical than some individual companies of Wednesday's announcement. Marty Durbin, CEO of America's Natural Gas Alliance, a trade group representing natural-gas producers including Southwestern, said he was "disappointed the administration is choosing to take a regulatory approach that will take years to implement, rather than a cooperative approach with the industry that we believe will ultimately result in greater emissions reductions in a shorter time frame." Reaction on Capitol Hill was split -- with Republicans, who now control both chambers of Congress, criticizing the move and vowing swift oversight, and Democrats commending the administration's actions. Many independent analysts concluded the EPA's actions were, for now anyway, a positive result for the industry because the rules could have been more expansive. ClearView Energy Partners, a nonpartisan energy analysis firm, said in a research note that the outcome is "generally beneficial for industry." Credit: By Amy Harder
Subject: Environmental protection; Natural gas; Energy policy; Environmental regulations; Federal regulation; Climate change; Petroleum production; Petroleum industry; Methane; Emissions control
Location: United States--US
People: Obama, Barack
Company / organization: Name: United Nations--UN; NAICS: 928120; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Clean Air Task Force; NAICS: 813312
Classification: 4310: Regulation; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.6
Publication year: 2015
Publication date: Jan 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645510844
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645510844?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Turns Up, With 5.6% Gain
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: C.4.
Abstract:
The International Energy Agency and the Organization of the Petroleum Exporting Countries will release reports on supply and demand later this week.
Full text: Oil prices rebounded from recent steep declines, posting their largest one-day percentage gain -- 5.6% -- in 2 1/2 years. Buyers entered the market after U.S. prices fell below $45 a barrel on Tuesday, analysts said. On Wednesday, futures surged into the settlement, when the front-month February Nymex oil options contract expired. Traders had large positions in February options between $44 and $50 a barrel, making trading volatile as market participants closed or rolled over those positions. "The low from [Tuesday] caught a lot of people's attention," said John Kilduff, founding partner of Again Capital in New York. "A lot of people have been waiting in the wings to pick a bottom, to jump all over a bottom. This is the first hint of one that we've seen." The U.S. oil benchmark rose $2.59 to $48.48 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, settled up $2.10, or 4.5%, at $48.69 a barrel on ICE Futures Europe. Both contracts posted their biggest one-day percentage gain since June 2012. Ample global supplies and lackluster demand have sent crude prices spiraling lower since last summer, with Brent shedding nearly 60% of its value. Market watchers said Wednesday's rally wasn't a surprise, but oil prices likely have further to fall in coming weeks on concerns about global growth and a persistent oil oversupply. U.S. inventory data released Wednesday showed total U.S. crude-oil and petroleum-product supplies at 1.16 billion barrels, a record in weekly data going back to 1990. Stockpiles of crude oil, gasoline and distillates all rose more than analysts surveyed by The Wall Street Journal had expected. U.S. oil production and crude-oil imports also increased. "Oil production continues to be strong, and so does world-wide production," said Tony Headrick, energy analyst at CHS Hedging LLC. "The outlook is for those crude-oil inventories to continue to rise." Price gains initially were pared after the report but then rose later in the session. "I'm not saying this is the bottom," said Andy Lebow, senior vice president for energy at Jefferies LLC. But "at some point, the bearish news can only press [prices] so much further." A weak outlook for the global economy increased fears that slowing growth in demand for oil won't recover soon. The World Bank cut its global economic outlook late Tuesday. The World Bank report comes after the U.S. Energy Information Administration said Tuesday that global oil supplies will outpace demand in 2015 and 2016, keeping prices subdued. The International Energy Agency and the Organization of the Petroleum Exporting Countries will release reports on supply and demand later this week. Gasoline for February delivery rose 8.22 cents, or 6.5%, to $1.3507 a gallon, the largest percentage gain since July 2009. Credit: By Nicole Friedman
Subject: Supply & demand; Petroleum industry; Petroleum production; Crude oil; Commodity prices
Location: United States--US New York
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210; Name: International Energy Agency; NAICS: 928120
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 15, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645510873
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Big Banks Project Extended Coal, Iron-Ore Downturn; Mixed Outlook for Resource-Reliant Countries Amid Currency, Oil Rout
Author: Hoyle, Rhiannon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
By contrast, the prospect of weaker prices is yet another boon for buyers like China's steelmakers who consume more than half the world's iron ore and Japan's power plants that have relied more heavily on coal since the 2011 Fukushima disaster halted nuclear-energy generation.
Full text: SYDNEY--Coal and iron-ore traders have been looking to major exporters such as Australia to lead a recovery in prices of bulk commodities by curbing production. But that scenario is becoming increasingly unlikely. A falling Australian dollar and plunging oil prices are making it more profitable for miners here to dig up and ship resources to Asia, even as supplies remain ample and demand slows. That dynamic has this week prompted some of the world's biggest banks including Citigroup and Macquarie Group to slash their projections for iron-ore and coal prices for 2015 and beyond. The logic: If it costs less to produce in local currency terms, producers would be able to tolerate greater price falls before they are forced to shutter mines. And, if supplies are ample, buyers should be able to negotiate lower prices for these commodities. "In an oversupplied market, which will need to balance [out] largely through production curtailments, this is an ominous sign for U.S.-dollar prices," said Hong Kong-based Citi analyst Ivan Szpakowski. He said the depreciation of currencies in major exporting countries has lowered production costs substantially for all bulk commodities. The Australian dollar, for one, has tumbled to more than five-year lows against the U.S. dollar as the U.S. economic recovery gains momentum and investors fret about the outlook for resources, an industry on which Australia is heavily reliant. For mining companies with expenses largely in Australian dollars, it means they make a wider margin when they repatriate earnings from the commodities they sell in U.S. dollars. "For us, it is a benefit," said Paul Flynn, chief executive of Whitehaven Coal Ltd., one of Australia's largest coal mining companies. "Australian-dollar coal is much better off than it was six-to-12 months ago." Australian mining companies aren't the only ones benefiting. Resources companies in Russia, a major exporter of coal, are also reaping the benefits thanks to a plunge in the ruble. Weaker oil prices are a boon for most producers as well, as energy--particularly at remote mine sites--is one of a mining company's biggest operating costs. Diesel prices might not have fallen as far as crude oil, but are still mostly lower in recent months. Cheaper oil also equates to lower freight costs--a boon for mining companies in countries like Brazil and Australia that face the added cost of shipping their commodities to places such as China. Zurich-based UBS AG and Commonwealth Bank of Australia on Thursday downgraded their forecasts for the market, cutting their projections for iron-ore and coal prices. But when it comes to iron ore, Citigroup is undoubtedly the most bearish. It projects the market will average just US$58 a metric ton in 2015. That is 11% below its previous projection and well below current iron-ore prices around US$68 a ton. The bank also sharply reduced its forecasts for coking and thermal coals. That is bad news for China's own mining companies and producers and countries elsewhere that aren't witnessing the same currency downturn. Prices for both commodities had already plunged in recent years due to a surge in supply, crimping earnings as operations planned when prices were booming had finally started production. By contrast, the prospect of weaker prices is yet another boon for buyers like China's steelmakers who consume more than half the world's iron ore and Japan's power plants that have relied more heavily on coal since the 2011 Fukushima disaster halted nuclear-energy generation. Australian investment bank Macquarie on Thursday cut its iron-ore forecasts for the next three years by 19%-26%. It expects an average of just US$61.53 a ton this year, and US$58.18 a ton in 2016. It also took a knife to its thermal-coal projections, cutting them between 13% and 21% over each of the next three years. It forecasts an average coal price of US$57 a ton this year, although it expects a pick up to US$63 a ton in 2016. Macquarie's reasons are similar to Citigroup's. It said that depreciating currencies and falling oil prices--coupled with existing headwinds such as oversupply and China's slowdown--will mean it would be some time before commodities are valued much higher than what they cost to produce and ship. Write to Rhiannon Hoyle at Credit: By Rhiannon Hoyle
Subject: Mining industry; Coal mining; Costs; American dollar; Currency; Iron compounds
Location: Australia Asia United States--US
Company / organization: Name: UBS AG; NAICS: 522110, 523110, 523120, 523920, 523930; Name: Commonwealth Bank of Australia; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busin ess And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645511824
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Tullow Oil Takes $2.7 Billion Write-off; Company Cites Unsuccessful Drilling and Cheap Oil
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
The rout has posed particularly don't have other parts of their business to fall back on when prices are low, like the refining arms of major corporations like BP PLC and Royal Dutch Shell PLC. Earlier this week, for example, U.K.-listed explorer Premier Oil PLC wrote down the value of its assets by $300 million on the back of lower oil prices.
Full text: LONDON--Tullow Oil PLC is taking a write-off of $2.7 billion before tax, another sign of the impact of on exploration and production firms. The U.K.-listed company known for its discoveries in East and West Africa, blamed cheap oil for a $600 million write-down across all its assets. Other impairments include $1.2 billion for unsuccessful exploration drilling and ventures that now have no prospect of commercialization. The move comes as Thursday--down more than half since June. The rout has posed particularly that don't have other parts of their business to fall back on when prices are low, like the refining arms of major corporations such as BP PLC and Royal Dutch Shell PLC. Earlier this week, U.K.-listed explorer Premier Oil PLC wrote down the value of its assets by $300 million because of lower oil prices. Tullow Chief Executive Aidan Heavey said on Thursday that the company reviewed every single asset in the portfolio before making its decision. "[We] wrote virtually everything off that we felt was either not commercial at $50 a barrel oil or where the [license] terms needed to be adjusted to make them commercial in the future," he said. In London, the company's shares were down 3 pence at £3.55 ($5.41) on Thursday. Tullow's shares have fallen about 14% since the beginning of 2015. Westhouse Securities analyst Mark Henderson said Tullow's "fundamental long-term production/cash flow growth story remains intact." For Tullow, which made its name opening up major hydrocarbon basins in Ghana, Uganda and Kenya, declining oil prices are having stark consequence on new and old ventures. For example, the company said a discovery it made in French Guiana in 2011 is no longer commercially viable at current oil prices. Mr. Heavey said Tullow was further cutting its 2015 exploration budget by 30% to $200 million. Last year it as part of cost cuts. In previous years, it had spent about $1 billion a year. More cost cuts are coming this year, including job cuts, operating costs and streamlining the business, Mr. Heavey added. Tullow is also reducing capital expenditure for this year to a maximum of $1.9 billion from $2 billion. About half of the capital expenditure will be allocated to the development of Tweneboa-Enyenra-Ntomme oil fields offshore Ghana, which are due to come onstream next year. The company said it expects 2014 revenue to be $2.2 billion and pretax operating cash flow of $1.5 billion, underpinned by strong performance of its West Africa oil production. "These results versus the prior year, have been impacted by the oil price decline and lower gas production following asset sales in Europe and Asia," the company said in a statement. Tullow said $500 million of the $2.7 billion pretax write off included a loss mainly related to the partial sale of the U.K. Schooner and Ketch gas fields. Write to Selina Williams at Credit: By Selina Williams
Subject: Petroleum industry; Prices; Petroleum production
Location: United Kingdom--UK Ghana Uganda West Africa
Company / organization: Name: Premier Oil PLC; NAICS: 211111; Name: Tullow Oil PLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645521088
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645521088?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
German Growth Accelerates in 2014; Low Oil Price and Weak Euro Bode Well for Economy After Strong Fourth Quarter
Author: Torry, Harriet
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
BERLIN--Germany's economic growth picked up in 2014, the federal statistics office Destatis said Thursday, stabilizing at the end of the year after a slowdown in the summer.
Full text: BERLIN--Germany's economy grew around a quarter of a percent in the final three months of 2014, gathering pace after expanding just 0.1% in the third quarter and a contraction in the second. For the year as a whole, price-adjusted gross domestic product in the eurozone's largest economy expanded 1.5%, its strongest rate since 2011 and well above meager growth of 0.1% in 2013, official data from the federal statistics office Destatis showed. "The economic situation stabilized toward the end of 2014, following a dynamic start into the year and the subsequent period of weakness last summer," Roderich Egeler, president of Destatis, said at a news conference. He added that the German economy was "in solid shape" in 2014. The fourth-quarter growth figure is only a preliminary estimate which may be revised before the statistics office releases its official figure on Feb. 13. Domestic demand was the key driver of economic growth last year, with employment at a record level, amid a difficult global economic environment, Destatis said. Household consumption increased 1.1% in 2014, while government consumption rose 1%. "Fears of falling into a downturn as a consequence of the dampening in sentiment during the summer period haven't come true," said Allianz Research in a note to clients, adding that and weak euro mean growth prospects for 2015 have "considerably improved." Destatis economist Norbert Räth described the low oil price as "to some extent an economic stimulus package" for German consumers, with savings on oil costs expected to stimulate demand for other products. He added the weak euro also offers a "strong impulse" for exporters competing on the world stage. Export growth was 3.7% in 2014, compared with 1.6% the previous year. Imports increased 3.3%, after posting 3.1% growth in 2013. "Very low interest rates, a neutral fiscal stance, , the positive effect of the lower oil price on domestic purchasing power and foreign demand from key export markets is likely to help the German economy to return to growth above potential (which we think is just north of 1%) very quickly in the course of 2015," said Evelyn Herrmann of BNP Paribas. Germany's DIW Institute for Economic Research said the good result in 2014 largely stemmed from a mild winter that boosted the economy's performance at the start of the year. However, it predicted that consumption would again drive stronger growth in 2015. 2014 was the year higher tax revenue, lower debt-servicing costs due to low interest rates, and lower expenditure helped Germany since 1969, a year earlier than previously planned, the finance ministry said earlier this week. Destatis said Thursday the federal budget posted a surplus in 2014 of [euro]7.3 billion ($8.59 billion). The public sector posted a surplus of [euro]11.9 billion, or 0.4% of GDP, last year, which includes the federal, state, municipal and social security budgets, in accordance with the European Union's Maastricht rules for fiscal discipline. Write to Harriet Torry at Credit: By Harriet Torry
Subject: Service introduction; Economic growth; Gross Domestic Product--GDP
Location: Germany
Company / organization: Name: Dow Jones Newswires; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645537125
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Declining Oil Prices Hit Petrobras --- Brazilian Oil Firm, Reeling From Corruption Probe, Has Been Especially Hurt by Cheaper Crude
Author: Connors, Will
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: B.3.
Abstract:
[...]the world's most deeply indebted oil major, Petrobras had been counting on robust oil profits to help it bankroll an aggressive offshore expansion, aided by foreign partners looking to tap Brazil's massive underwater reserves.
Full text: RIO DE JANEIRO -- Reeling from a massive corruption scandal, Brazil's state-run oil firm, Petroleo Brasileiro SA, faces another major challenge: Falling global oil prices are testing the economic viability of the company's deep-water oil fields. Estimated by Brazil's oil regulator to contain as much as 50 billion barrels of recoverable oil, these so-called pre-salt fields are central to Brazil's goal of becoming a Top 5 oil producer globally by 2020. But market prices hovering around $50 a barrel aren't helping. Deep-water drilling is one of the most expensive undertakings in the industry, and it grows less attractive the farther prices fall. Petrobras said last week that the break-even cost of pre-salt production is between $45 and $52. Already the world's most deeply indebted oil major, Petrobras had been counting on robust oil profits to help it bankroll an aggressive offshore expansion, aided by foreign partners looking to tap Brazil's massive underwater reserves. "It's going to be harder and harder for Petrobras to execute on this golden goose," says Michelle Foss, an energy economist at the University of Texas. The pre-salt is "very challenging and expensive even in a high-oil-price environment." A Petrobras spokeswoman says the company is still moving forward on pre-salt projects "in an economically viable way." But cutbacks loom. While it has yet to provide details, Petrobras announced in December that it would scale back an ambitious $220 billion capital-spending plan, about half of which was earmarked for development of the pre-salt fields. Unveiled in 2007, the deposits lie 200 miles off Brazil's southeastern coast, deep below the seabed and covered by the thick layer of salt for which they're named. The find was originally heralded as a bonanza that would catapult Brazil to be one of the world's top oil producers. Following the discovery, Brazil's then president, Luiz Inacio Lula da Silva, famously declared that "God is Brazilian." Pre-salt already accounts for nearly a third of the company's total production of 2.3 million barrels of oil a day. By 2020, Petrobras is looking to boost output to four million barrels a day, with the majority of that production coming from the pre-salt fields. Where it will get the funding to do so, though, isn't clear. Petrobras borrowed heavily to finance early exploration and development efforts, and it's now burdened with some $170 billion in debt, according to Moody's Investors Service. Brazil has courted outside partners to help it develop its pre-salt riches. But few oil majors have invested, turned off by Brazilian government rules, including a mandate that Petrobras be the sole operator of pre-salt fields. Brazilian officials are considering loosening those requirements. But even if that happens, it's unclear how much foreign interest there would be with oil prices so depressed. "They're in a tough spot," says Ms. Foss of the University of Texas. "International companies are going to stay clear of everything that's high cost." Further complicating the company's plans is a massive corruption scandal that has dominated headlines in Brazil since it first came to light in March. Federal investigators charge that Petrobras was at the heart of an alleged kickback scheme in which construction companies overcharged for Petrobras contracts, splitting the ill-gotten gains with Petrobras executives and local politicians. Three former Petrobras executives have been arrested. Petrobras says that it's a victim of the alleged scam and is cooperating with investigators. The company has set up its own internal investigation, and it recently said it halted work with 23 construction companies linked to the alleged scheme while the investigation continues. The company has twice-delayed its third-quarter earnings as it works to quantify potential corruption-related write-offs. The company says it will release its unaudited third-quarter earnings this month to meet obligations to creditors and prevent a forced early payment of certain outstanding debts. Petrobras, whose shares are traded in New York, is also under investigation by the U.S. Securities and Exchange Commission and the U.S. Justice Department. The steady stream of bad news has battered Petrobras shares, which have fallen 55% in the past six months. Credit: By Will Connors
Subject: Petroleum industry; Kickbacks; Corruption; Deepwater drilling; Crude oil prices
Location: Brazil
People: Lula da Silva, Luiz Inacio
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Petroleos Brasileiro SA; NAICS: 211111
Classification: 8510: Petroleum industry; 9173: Latin America
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Jan 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645538961
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645538961?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Producer Apache To Shed 5% of Workers
Author: Cook, Lynn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]15 Jan 2015: B.1.
Abstract:
Several oil-field-services companies, which are usually the first to feel the effects of a price plunge, have already cut their workforces; Halliburton Co. last month said it was laying off 1,000 workers outside the U.S. But American oil producers, who expanded during the energy boom, have been slower to reduce head count.
Full text: Apache Corp. is laying off as many as 250 employees this week in one of the first major workforce cuts at an American oil producer since crude prices began to plunge last summer. The Houston-based energy company, one of the biggest in the U.S., pumps oil and gas in places from Texas to Egypt and employs about 5,000 workers around the globe. The workforce reduction amounts to roughly 5% of its staff, a company spokeswoman said Wednesday evening. Other U.S. oil producers, who have likewise been jolted in recent months by a 55% drop in crude prices, are likely to follow Apache. Several oil-field-services companies, which are usually the first to feel the effects of a price plunge, have already cut their workforces; Halliburton Co. last month said it was laying off 1,000 workers outside the U.S. But American oil producers, who expanded during the energy boom, have been slower to reduce head count. Many of them borrowed heavily and used debt to fund their operations. Tapping shale formations from Colorado to North Dakota using hydraulic fracturing and horizontal drilling to wring fuel from the ground was very profitable when oil was trading for over $100 a barrel, as it did as recently as June 2014. But today U.S. oil trades for less than $50 a barrel, making many companies' operations unprofitable. Apache had been profitable through the U.S. energy boom until the third quarter of 2014, when it reported a $1.24 billion loss as it wrote down oil and gas properties as prices headed down in the fall. Credit: By Lynn Cook
Subject: Petroleum industry; Crude oil prices; Oil reserves; Layoffs; Oilfield equipment & services
Location: United States--US Texas Egypt
Company / organization: Name: Halliburton Co; NAICS: 213112, 237990; Name: Apache Corp; NAICS: 211111 , 213112, 324110
Classification: 6100: Human resource planning; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 15, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645538974
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645538974?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices to Soften Non-OPEC Oil Supply Growth; Producer Group Says That Demand Will Be Boosted Slightly by Weaker Price Environment
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
In its monthly oil market report, the producer group lowered its forecast for the increase in non-OPEC oil supply this year, highlighting the indications that lower prices are already affecting investment in the sector.
Full text: Slumping oil prices are expected to dampen the increase in non-OPEC oil supply this year, even as demand is expected to improve marginally, the Organization of the Petroleum Exporting Countries said Thursday. In its monthly oil market report, the producer group lowered its forecast for the increase in non-OPEC oil supply this year, highlighting the indications that lower prices are already affecting investment in the sector. In the U.S., where oil production has soared in recent years, the producer group has slashed 100,000 barrels a day from its forecast production increase this year. Meanwhile, it sees slightly stronger demand this year, bolstered by the weaker price environment. in the past six months, tumbling more than 50% since June amid soaring U.S. crude production at a time of slowing world economic growth and sluggish demand. The downturn was exacerbated in November when , rather than acting to curtail output and bolster the market. The producer group has stuck doggedly to its November decision even as the price of member countries' main export crashed. The price of the OPEC reference basket slumped to its lowest value since May 2009 in December. Despite the slump in prices, the group ratcheted up its production to 30.2 million barrels a day in December, largely driven by a substantial increase in Iraq's oil production, according to secondary sources. That suggests OPEC's fastest-rising oil producer is seeking to increase output to offset the steep decline in prices. Write to Sarah Kent at Corrections & Amplifications Falling Oil Prices to Soften Non-OPEC Oil Supply Growth. An earlier version of this article referred to falling supply from OPEC members. Credit: By Sarah Kent
Subject: Petroleum industry; Supply & demand; Cartels; Crude oil prices; Petroleum production; Production increases
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspa pers
Language of publication: English
Document type: News
ProQuest document ID: 1645554104
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645554104?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norway's Oil and Gas Output Set to Stabilize for Next Decade; Output Rose in 2014 but Domestic Companies Are Set to Reduce Spending in the Short Term
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
OSLO--Norway's oil and gas output rose slightly in 2014 and is set to stabilize at current levels for the next decade, despite worries about , the Norwegian Petroleum Directorate said Thursday, but said it expected domestic oil companies to reduce spending significantly in the short term.
Full text: OSLO--Norway's oil and gas output rose slightly in 2014 and is set to stabilize at current levels for the next decade, despite worries about , the Norwegian Petroleum Directorate said Thursday, but said it expected domestic oil companies to reduce spending significantly in the short term. "The start of 2015 is marked by low oil and gas prices, capital discipline or tightening, and, for some workers, layoffs and uncertainty," said Ms. Bente Nyland, head of the Norwegian Petroleum Directorate. "The profitability of future projects is reduced." Despite a drop in oil prices by more than half since last June, Norway, Europe's largest oil producer, produced 1.4% more oil and gas last year at 3.73 million barrels of oil equivalent a day, the NPD said. Out of that, crude oil output rose 3% to 1.51 million barrels a day, the first increase in 13 years but still more than halved since the peak in 2000. Oil companies operating in Norway are set to reduce their capital expenditure by 15% in 2015 and 8% the year after, but spending is seen to rebound in 2017, the NPD said. However, the forecast was based on pre-Christmas oil prices, and may be adjusted downward as oil prices have been dropping further, it added. Norway's oil and gas production is set to remain largely flat until 2027, on the condition that oil companies keep investing in new developments, the NPD said. However, tanking oil prices and high costs may challenge this forecast, it said. "No matter how the oil price develops, it is highly necessary to take measures to reduce costs," Ms. Nyland said. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Petroleum industry; Prices; Capital expenditures
Location: Europe Norway
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645565933
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645565933?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Producer Prices Fall by Most in Three Years; Producer Prices Fall 0.3% in December; Cheaper Oil Holding Down Inflation
Author: Mitchell, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
The Fed's preferred inflation gauge--the Commerce Department's price index for personal consumption expenditures--fell 0.2% in November from a month earlier and was up 1.2% from a year earlier.
Full text: WASHINGTON--Prices charged by U.S. companies fell in December by the most in three years, the latest sign cheaper oil is holding down inflation. The producer-price index, which measures prices paid to firms for their goods and services, dropped 0.3% in December, the Thursday. Producer prices have fallen four of the past five months, and December's decline was the steepest since October 2011. The slide in oil prices since summer drove last month's decline, though food prices also fell sharply. Excluding food and energy, producer prices rose 0.3% last month. Overall producer prices have climbed just 1.1% over the past 12 months, while prices excluding food and energy have increased a healthier 2.1%. The latest figures bolster other recent reports suggesting overall inflation is heading lower due mainly to oil's fall, while costs for a broad array of other items continue to climb modestly. "The data suggest a tame but positive underlying trend" of price growth, Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients. The Federal Reserve is closely monitoring inflation as it debates when and how quickly to raise short-term interest rates, which have been pinned near zero since the recession in efforts to stoke economic growth. . Economists surveyed by the Journal had expected overall prices to fall 0.4% in December and prices excluding food and energy to climb 0.1%. Producer prices reflect inflation from the seller's perspective and exclude certain costs incurred by consumers, such as taxes. Components of the index often point to where U.S. inflation--measured at the consumer level--is headed. Global oil prices have slid since summer as supplies in the U.S. and elsewhere piled up and global demand remains weak. Crude-oil prices have fallen more than 50% since June, even with a rally Wednesday. Outside of energy, producer prices continue to rise modestly. A measure of "core inflation" at the producer level--prices excluding food, energy and trade services--rose 0.1% last month and was up 1.3% from a year earlier. Food prices declined 0.4% in December from November, marking the fourth drop in five months. Prices for trade services--reflecting the change in margins received by wholesalers and retailers--climbed 0.6%. The weakness in prices comes despite a burst in hiring and stronger economic growth in the U.S. last year, reflecting continued underlying weakness in the U.S. and overseas. Other inflation measures also show weak price pressures. Prices of imported goods fell last month by the most in six years, the Labor Department said Wednesday. The agency's consumer-price index fell 0.3% in November from a month earlier and was up a paltry 1.3% form a year ago. Economists expect that December's figures, out Friday, will show a 0.4% decline from November. The Fed's preferred inflation gauge--the Commerce Department's price index for personal consumption expenditures--fell 0.2% in November from a month earlier and was up 1.2% from a year earlier. The Fed targets 2% annual inflation, as measured by the PCE price index, as a sign of price stability and healthy economic growth. At the Fed's December policy meeting, most Fed officials expected inflation to fall in coming months before rising back slowly toward the central bank's target. Write to Josh Mitchell at Credit: By Josh Mitchell
Subject: Finished goods; Food; Inflation; Food prices; Recessions; Consumer Price Index; Economic growth
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645591509
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
North Sea Pays the Price of Oil Slide; BP to Lay Off About 300 People in Aberdeen
Author: Williams, Selina; Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
Without their investment, there is a growing risk that some of the U.K. North Sea's remaining economically recoverable resources, estimated by industry experts at between 15 billion and 16.5 billion barrels of oil and natural gas, will end up as so-called stranded assets--hydrocarbons that are simply too expensive to develop.
Full text: LONDON--BP PLC said Thursday that it would lay off about 300 people in the North Sea hub of Aberdeen, Scotland, in the biggest sign yet of the problems besetting the U.K.'s primary oil-producing region. While the world-wide slide in the price of oil has focused attention on the U.S.'s relatively new shale fields--which are partially responsible for the global oil glut--it is the mature, high-cost fields such as those in the North Sea that seem likely to suffer most. At prices much below $75 a barrel or so, some of the North Sea's reserves might be too expensive to develop. BP said Thursday that it is still committed to the region, and that its cuts of about 200 employees and 100 contractors--out of a total of close to 3,500 onshore workers--are part of a companywide cost-reduction program. "Given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust," BP's North Sea president, Trevor Garlick, said in a written statement. Energy companies such as Chevron Corp., BG Group PLC and Statoil ASA are reassessing capital-spending decisions that might have helped extend the oil province's life. Last month, ConocoPhillips said after a review of its North Sea operations that it plans to eliminate 230 positions in the U.K. by March. Small companies that aim to squeeze the last drops from older oil fields are struggling to raise financing. Without their investment, there is a growing risk that some of the U.K. North Sea's remaining economically recoverable resources, estimated by industry experts at between 15 billion and 16.5 billion barrels of oil and natural gas, will end up as so-called stranded assets--hydrocarbons that are simply too expensive to develop. About 42 billion barrels have already been extracted since significant oil and gas output first began in the 1970s. The region has been important for international oil companies that view it as a good counterbalance to investments in countries with greater political or security risks, such as in Africa or the Middle East. But before the oil-price slump, margins were already tightening because of rising costs and high taxes. Rates of return on North Sea oil and gas projects are currently about 15%, compared with 20% to 25% for other relatively mature offshore basins in politically stable countries, according to a recent report from the U.K. Treasury. Annual oil and gas production from the North Sea has fallen about 70% since its peak in 1999, to roughly 1.4 million barrels a day. High and complex tax rates, as well as 15% annual inflation in rates for drilling rigs and other equipment, have kept costs high in the North Sea. In addition, much of the infrastructure, such as pipelines and platforms, is old and requires frequent investment in maintenance and repairs. Even when oil prices were more than $100 a barrel, some 1.5 billion barrels of remaining North Sea oil were uneconomic to develop, according to consultancy Wood Mackenzie. Now, with Brent crude under $50 a barrel, a further 1.4 billion barrels currently being considered for a final investment decision could be under threat. Brent North Sea crude for February delivery fell 2.1% to $47.67 in London Thursday, down more than 50% since June. "This oil price is terrible news for the North Sea," said Craig McCallum, who previously worked at Venture Production, a company that specialized in developing difficult fields in the North Sea. "There's not a lot of new oil developments that are going to work at $50 a barrel," he said. One project awaiting sanction is the $10 billion Rosebank development led by Chevron. Rosebank, one of the largest new prospects in the U.K., could eventually yield as much as 240 million barrels of oil equivalent. In 2013 Chevron delayed its final Rosebank investment decision because of rising costs, but it hasn't completed those plans yet. Situated 80 miles northwest of the Shetland Islands on the edge of the U.K. continental shelf, in choppy waters about 3,600 feet deep, Rosebank is considered one of the most challenging environments in which oil companies operate globally. Bertrand Hodee, head of European oil and gas research at Raymond James, estimates that even with oil priced at $100 a barrel, Chevron would get just an 8% return on the project. "Our view is that it's going to be on the drawing board for a while," he said. Chevron, which doesn't provide break-even prices for its oil projects, said it has identified changes to the Rosebank development to reduce costs and is now conducting additional engineering work. "We take a long-term view of prices because our investments last for decades," the company said in a written statement. Chevron isn't the only company to postpone investment in the North Sea. In October, BG said it would delay sanctioning its Jackdaw gas project there by two years until 2017 while it redraws its plans to try to use existing infrastructure rather than building three new platforms. BG had initially planned to bring other smaller discoveries into the Jackdaw development, but that seems unlikely now, leaving 100 million to 150 million barrels as stranded assets, said Matt Taylor, BG's head of government and public affairs. Other projects awaiting final sanction and potentially at risk from the falling oil price include Statoil's Bressay heavy-oil project, Iona Energy Inc.'s West Wick and OMV AG's Cambo, analysts have said. A spokeswoman for Iona Energy said West Wick isn't a core project for the company. A spokesman for Statoil said the Bressay license was extended until the end of 2016 and the company is working on the project. OMV declined to comment about specific projects. Write to Selina Williams at and Justin Scheck at Credit: By Selina Williams And Justin Scheck
Subject: Petroleum industry; Oil reserves; Rates of return; Costs; Natural gas
Location: Scotland United Kingdom--UK United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: BG Group PLC; NAICS: 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645642614
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada to Delay Budget Until April; Will Pause to Consider Effect of Lower Oil Prices
Author: Dawson, Chester; Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
Lower oil prices will hurt the Canadian government's fiscal profile, the country's federal finance minister, Joe Oliver, said here Thursday.
Full text: CALGARY--Canada won't introduce its budget for 2015 until April as it needs extra time to gauge the fallout from the 50%-plus plunge in prices for crude oil, the country's top export. Lower oil prices will hurt the Canadian government's fiscal profile, the country's federal finance minister, Joe Oliver, said here Thursday. The governing Conservatives had promised a surplus in the fiscal year starting April 1, in the lead-up to an election that must be held no later than October. Mr. Oliver said the government believes it can balance the budget in fiscal 2015-16, and produce surpluses thereafter. "Given the current market instability, I will not bring forward our budget earlier than April. We need all the information we can obtain before finalizing our decisions," he said. The Canadian government generally introduces its 2015 budget plan before the end of the fiscal year, which is March 31. It presented last year's budget in mid-February. The plunge in crude-oil prices has forced economists to revise their growth forecasts for the Canadian economy this year and next. A senior official at the Bank of Canada said earlier this week that lower oil prices are "likely, on the whole to be bad for Canada." Write to Chester Dawson at and Paul Vieira at Credit: By Chester Dawson And Paul Vieira
Subject: Petroleum industry; Fiscal years; Budgets
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645735100
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645735100?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Egypt Cuts Key Rates to Boost Growth; Sliding Oil Prices Ease Pressure on Arab State's Strained Finances
Author: Lohade, Nikhil
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
DUBAI--Egypt in a surprise move on Thursday cut key interest rates to stimulate an economy still struggling to recover from years of political unrest, as eased some pressure on the Arab state's strained finances.
Full text: DUBAI--Egypt in a surprise move on Thursday cut key interest rates to stimulate an economy still struggling to recover from years of political unrest, as eased some pressure on the Arab state's strained finances. Its monetary policy committee in its first meeting this year decided to cut the overnight deposit rate, overnight lending rate, and the rate of the central bank's main operation by 50 basis points each to 8.75%, 9.75%, and 9.25%, respectively. The discount rate was also cut by 50 basis points to 9.25%, the central bank said in a brief statement posted on its website. Egypt's government, led by President Abdel Fattah Al Sisi, has in recent months tried to keep inflation under check after taking some tough to ease pressure on its dwindling aid-supported foreign reserves. A sharp fall in oil prices, to that extent, has helped Egypt, a net energy importer, analysts say. "Although the slide in oil prices is unlikely to have much direct impact on domestic inflation, it has helped to ease strains in the balance of payments," Jason Tuvey, an economist at Capital Economics, said in a note to clients. Mr. Tuvey reckons the CBE cut rates amid expectations that inflation will edge back below 10% over the coming months. The focus now appears to be firmly on boosting growth and bringing investments back to the troubled country, which is also organizing an investor conference in coming months to woo investors. Write to Nikhil Lohade at Credit: By Nikhil Lohade
Subject: Central banks; Monetary policy
Location: Egypt
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645735422
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Schlumberger Cuts 9,000 Jobs as Oil-Price Ax Falls; Oil-Field Services Company Takes More Than $1 Billion In Charges
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
The world's largest oil-field service company, Schlumberger Ltd., said Thursday that it laid off 9,000 workers late last year, reducing global head count 7%.
Full text: The world's largest oil-field service company, Schlumberger Ltd., said Thursday that it laid off 9,000 workers late last year, reducing global head count 7%. The company took more than $1 billion in charges for the fourth quarter, including $300 million related to downsizing its staff of roughly 123,000. Profits for the quarter fell sharply as a glut of oil and tepid demand for fuel drove down the price of crude and demand for Schlumberger's services. Unrest in Libya and Iraq and international sanctions in Russia also took a toll on operations, the company said. Schlumberger also incurred restructuring costs of $800 million to write down its fleet of ships used to gather data on underground oil and gas reservoirs used by exploration companies. As the first major energy company to report financial results, Schlumberger is expected to set the tone for a sector hard hit by plunging crude-oil prices. The company said it anticipates a drop in spending for new oil and gas exploration this year. Schlumberger helps energy producers drill and frack wells so they can pump more fuel from the ground. So far, those energy companies have indicated they will spend 30% to 35% less in the U.S. and Canada this year, said James Wicklund, an energy analyst at Credit Suisse. Oil prices have fallen more than 55% since June to less than $50 a barrel in the U.S. and energy companies are trying to figure out where the bottom of the market is. Accurately forecasting how long oil prices will stay low is no easy task, said Angie Sedita, an analyst at UBS Securities LLC. "There was limited forward looking commentary on either North America or the International markets," she said of Schlumberger's financial filing to the Securities and Exchange Commission. "Given the early stages of the downturn we believe accurate management guidance is challenging to impossible." On Thursday, the company also said it would raise its quarterly dividend by 25% to 50 cents a share. Shares in Schlumberger closed down 2.25% at $76.63, but ticked up slightly in after-hours trade. Fourth-quarter profit dropped to $302 million, or 23 cents a share, from $1.66 billion, or $1.26 a share, a year earlier. Those results include restructuring costs. Revenue rose 6% to $12.64 billion. Excluding restructuring and other charges, profit rose to $1.50 a share in the quarter from $1.35 a share a year earlier. Analysts surveyed by Thomson Reuters were expecting $1.45 a share. Maria Armental contributed to this article. Write to Dan Molinski at Credit: By Dan Molinski
Subject: Petroleum industry; Financial performance; Corporate profits; Crude oil prices
Location: Russia United States--US Iraq Libya
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Credit Suisse Group; NAICS: 522110; Name: Securities & Exchange Commission; NAICS: 926150
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645766666
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645766666?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP Faces Up to $13.7 Billion in Fines in Deepwater Gulf Spill Case; Judge Rules Oil Company Liable on 3.19 Million Barrels of Crude That Gushed Into Waters
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
Write to Daniel Gilbert at Corrections & Amplifications An earlier version of this article incorrectly stated that a court ruling on the Gulf of Mexico oil spill took into account crude that was skimmed from the water to calculate how many barrels BP was liable for.
Full text: A federal judge ruled Thursday that BP PLC is liable for spilling just over 3 million barrels of crude into the Gulf of Mexico in the 2010 Deepwater Horizon disaster, 24% less than federal prosecutors had claimed. The ruling means that BP faces a maximum penalty of $13.7 billion under the U.S. Clean Water Act, down from the $18 billion sought by the Justice Department. The decision by Judge Carl Barbier surprised analysts following the case, coming days before BP is set to appear in his court for a related trial on how much it should pay for each barrel spilled. That tranche of the complex case, which begins on Tuesday, will determine the total fine under the Clean Water Act. Thursday's decision narrows the range of penalties BP could face, which could make a settlement more feasible, said Tom Claps, a legal analyst for Susquehanna Financial Group. But the judge is "not giving the parties a lot of time to sit down" to negotiate, he added. Both BP and the Justice Department said they are reviewing the ruling. BP has argued that its efforts to control and clean up the oil spill should result in a penalty far below the maximum. The Deepwater Horizon rig exploded on April 20, 2010, leaving 11 crew members dead and unleashing the largest offshore oil spill in U.S. history. In September, Judge Barbier ruled that BP acted recklessly leading up to the rig explosion and oil spill, exposing the company to a maximum pollution penalty of $4,300 a barrel. BP has asked that the per-barrel fine be capped at $3,000. The ruling on Thursday concluded that 4 million barrels of oil gushed from the well, and that after taking into account the crude that was recovered, BP is liable for a fine on 3.19 million barrels. The company wasn't "grossly negligent, willful, or wanton" in its efforts to control the spill, Judge Barbier wrote. BP had argued it should be liable for 2.45 million barrels, while federal prosecutors claimed a fine should be for 4.2 million barrels. BP has set aside $3.5 billion to pay for penalties under the Clean Water Act. It has already spent $43 billion on spill-related costs, including criminal and civil settlements and $14 billion for the Gulf cleanup. The ruling also has implications for Anadarko Petroleum Corp., which owned 25% of the well drilled by the Deepwater Horizon rig. Anadarko's maximum liability under the Clean Water Act had been $4.6 billion, based on the government's estimate of how much crude spilled. After Thursday's ruling, the company faces up to $3.5 billion. "Today's ruling regarding the volume doesn't change the Court's previous findings that we had no direct operational involvement," an Anadarko spokesman said. Anadarko contends it should pay no penalty under the Clean Water Act. It has set aside $90 million for a potential fine. Write to Daniel Gilbert at Corrections & Amplifications An earlier version of this article incorrectly stated that a court ruling on the Gulf of Mexico oil spill took into account crude that was skimmed from the water to calculate how many barrels BP was liable for. The court's finding referred to oil that was recovered before entering the water. Credit: By Daniel Gilbert
Subject: Oil spills; Fines & penalties; Petroleum industry; Clean Water Act-US
Location: United States--US Gulf of Mexico
People: Gilbert, Daniel
Company / organization: Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645768794
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645768794?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is p rohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Let's Rethink New Methane Policy; A new set of regulations on the oil and natural-gas industries, targeting emissions of methane are based on shoddy climate science.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
[...]methane [control] can be a pretext for interfering with and raising the costs of drilling."
Full text: Regarding your editorial (Jan. 5): The White House has announced plans to impose a new set of regulations on the oil and natural-gas industries, targeting emissions of methane. The basis is shoddy climate science, as propagated in various U.N.-IPCC reports. These claim that the global-warming potential of a methane molecule is about 50 times that of CO2, and that climate forcing from growth of atmospheric methane is about 20% of carbon dioxide's. Their estimates are too high by as much as a factor of 100. They made two basic scientific errors, as can be readily shown. They ignored the fact that the infrared absorption bands of atmospheric water vapor cover those of methane (as pointed out by my physicist colleague Dr. Tom Sheahen); one cannot absorb the same radiation twice. Further, the methane bands are located far from the peak of the surface heat emission spectrum, where there is little energy available to be absorbed. I don't know how IPCC got its numbers--but they are wrong. As your editorial states: "The real reason methane has become an obsession of the green lobby is that it sometimes leaks when extracting or transporting oil and especially natural gas. Thus methane [control] can be a pretext for interfering with and raising the costs of drilling." Fred Singer, Ph.D. Chairman Science & Environmental Policy Project Arlington, Va. Mr. Singer published early estimates of anthropogenic production of methane and its contribution to stratospheric water vapor (Nature, 1971), since confirmed by data.
Subject: Methane
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645771140
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645771140?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Looking for Value in Oil's Bargain Bin; In the Wake of Crude's Slide, Energy Veteran Sees Long-Term Value in MLPs
Author: Lauricella, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Jan 2015: n/a.
Abstract:
[...]Mr. Young sees MLPs as a way to invest without having to rely on "if you build it, they will come" business models popular elsewhere throughout the energy exploration, production and services sector. Because transporters are paid based on volume, they can benefit from a drop in oil prices as lower prices at the pump lead to greater demand for gasoline.
Full text: Ensconced in a rambling, two-story house on a woody hillside in the town of Woodstock, N.Y., far from the oil fields of Texas or North Dakota, Roger Young is hunting for bargains among stocks created by the free-falling price of crude. Mr. Young, who is 69 years old and helps oversee $8.5 billion as a portfolio manager at Miller Howard Investments, has spent more than four decades picking energy stocks. He bought and sold through the Arab oil embargo of 1973 to 1974 and the oil-price surge of 1978 and 1979. Mr. Young spent the brutal economic downturn that followed the more-than-50% collapse of oil prices in the 1980s in Houston, where the skyline was filled with empty office towers and the dry cleaners asked customers to return wire hangers to save money. In an industry that has a long history of booms and busts, "a lot of people are learning Energy 101," he says. That history shows an oversupply of oil will be followed by production cuts, and in time, a rebound in oil prices. "Once the market gets a whiff of that supply response, it tends to react before you see the bottom of supply," he says. For now, Mr. Young says, investors are fleeing even stocks with solid prospects. Energy stocks within the S&P 500 have fallen 8.3% in the past three months, and the SPDR S&P Oil & Gas Exploration and Production exchange traded fund, which holds a basket of stocks in that corner of the industry, has lost 24.9% in three months through Thursday. The psychology, he says, "is anything with energy in its name has been fair game: 'I want out.'" Before sentiment turns, Mr. Young predicts more pain to come from the current collapse in oil--the price of crude has fallen by about half since late June--especially among smaller drillers that had borrowed heavily. And there were signs of excess in places like oil-booming North Dakota, where, he says, "the price of a decent room may rival the Plaza or Waldorf." "There will be a lot more headlines to come before this plays out, and they won't be positive headlines," he says. Investors often look to the past when trying to predict the future. With oil, there is a long history of swift ups and downs, with prices driven by global economic and geopolitical events. While those forces remain intact, Mr. Young says the past few years brought significant changes to energy investing, giving him a more optimistic long-term outlook. Technology and the emergence of U.S. shale oil and natural-gas producers, he believes, have turned the business of providing energy infrastructure into a long-term growth industry, he says. Mr. Young focuses much of his time on master limited partnerships, or MLPs, which earn money largely by charging drillers to transport or store oil and natural gas, then pay out their income to shareholders. The Alerian MLP index, the benchmark for the industry, is yielding 6.1%. Among the top MLP investments for Miller Howard are Enterprise Product Partners, which returned 13.4% including dividends in 2014, Energy Transfer Equity, which returned 44.7%, and Magellan Midstream Partners, which returned 34.8%, according to the firm. But MLPs haven't escaped the recent carnage as investors have worried that lower oil prices will lead drillers to cut back on production. Some investors also worry that high-yielding MLPs could suffer along with bonds should the Federal Reserve move quicker than expected to raise interest rates. The Alerian MLP index is down 7.1% over the past three months through Thursday. Still, Mr. Young sees MLPs as a way to invest without having to rely on "if you build it, they will come" business models popular elsewhere throughout the energy exploration, production and services sector. Because transporters are paid based on volume, they can benefit from a drop in oil prices as lower prices at the pump lead to greater demand for gasoline. "You have a backlog of projects that are either just being completed or just started construction, all with contracts," he says. As a result, he said, thanks to those projects coming online and planned production increases for gas and oil, even if no new projects were started, "you would have growth of distributions for the next three years." He notes that even amid the selloff in oil, several MLP companies have announced dividend increases, and he expects more to come. The question for Mr. Young is: "What's the tipping point to make the current trajectory [for dividend increases] less steep?" And, he says, if crude prices are sustained below $75, "we'll probably have less steep growth." Having lived for many years in Houston and Denver, Mr. Young joined Miller Howard in 2008, moving to Woodstock. For 20 years, the firm has had its offices in a two-story house, once lived in by actor Lee Marvin. They soon will be moving into new offices closer to the village that will have solar power. Miller Howard's founder, Lowell Miller, has been investing in energy-related stocks since founding the firm and launching a portfolio focused on dividend-paying stocks in 1991. That strategy had a heavy focus on utility stocks including pipeline operators. The firm ended up owning its first MLP in 1997, when Kinder Morgan Energy Partners, the first major energy MLP, bought one of the firm's pipeline stocks. At Miller Howard, Mr. Young is a co-manager on MLP strategy and on energy stocks broadly, such as the broader income equity strategy portfolio. Through the end of 2014, Miller Howard's MLP strategy was up 19% a year over the past five years and 9.9% in 2014, ahead of the Alerian MLP index, which is up 16.7% a year for the past five years and 4.8% in 2014. While there is a tendency to view energy stocks as uniform, he says he learned otherwise early on during the Arab oil embargo. "It's a very, very specialized industry and certain segments can be more volatile than others," he says. The least volatile, Mr. Young says, are the transporters of energy--such as MLPs. While thinking on MLPs is negative right now, Mr. Young expects that to change. "Psychology can change through proof of the business models," he says. Write to Tom Lauricella at Credit: By Tom Lauricella
Subject: Petroleum industry; Supply & demand; Master limited partnerships; Prices; Investments; Stocks; Growth industries; Natural gas
Location: Texas North Dakota
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 15, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645771176
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645771176?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
The Cheap-Oil Reform Moment; Ending fuel subsidies is progress, but India and Indonesia need far more.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
New Delhi has since raised fuel taxes three times, which reduces consumer savings at the pump, but at least the additional tax revenue reduces India's borrowing requirements--expected to rise if the U.S. Federal Reserve raises interest rates.
Full text: Lower oil prices couldn't have come at a better time for the new leaders of India and Indonesia. Months after entering office amid sluggish economic growth and rising inflation, Narendra Modi and Joko Widodo have already capitalized on oil's price collapse by curbing subsidies that have long wreaked havoc on state balance sheets. Now comes the hard part: enacting the broader reforms to spur long-term growth. On Jan. 1 Indonesia's government stopped subsidizing gasoline for the first time in four decades. Cuts in fuel subsidies had sparked violent protests in the past, including in the waning days of the Suharto regime in 1998, but this time the streets stayed quiet. Thanks to the 50% drop in global oil prices since July, Indonesians saw prices fall 10% at the pump this month even without subsidies. The government will save nearly $20 billion, or about 13% of its annual budget. India's government saved some $5 billion by ending subsidies for diesel in October. New Delhi has since raised fuel taxes three times, which reduces consumer savings at the pump, but at least the additional tax revenue reduces India's borrowing requirements--expected to rise if the U.S. Federal Reserve raises interest rates. Indonesia and India haven't banished the subsidy demon entirely. Jakarta recently capped but maintained its subsidies for diesel, the fuel most important to mass-transit riders, small farmers and fishermen. (Gasoline mostly fuels cars owned by the affluent.) New Delhi still subsidizes cooking gas and kerosene, which are widely used in rural areas without reliable electricity. As long as those subsidies endure, so will the market distortions, smuggling and graft that come with them. And so will the interest groups, bureaucrats and parliamentarians who will push to revive subsidies when oil prices rise again. Leaders in Jakarta and New Delhi will have greater difficulty resisting that pressure if they don't shore up their economies against future price fluctuations. Both countries have young workforces and growing markets, but for ease of doing business the World Bank ranks Indonesia 114th in the world and India 142nd. Red tape deters entrepreneurship. Labor laws stifle productivity. Roads, railways, ports and power plants are inadequate. Politicians chase votes by spending more on subsidy and food-distribution boondoggles than public works. Graft is endemic. Land acquisition is a legal and political morass. Foreign investors feel unwelcome. Indonesia ranks 172nd for contract enforcement; India ranks 186th, ahead of only Angola, Bangladesh and East Timor. Jakarta shakes down energy and mining firms in the name of "resource nationalism." New Delhi limits foreign ownership and squanders apparent breakthroughs like the 2008 civil-nuclear deal with the United States. And so foreign investment stays concentrated in currency, debt and other assets most vulnerable to volatile global commodity prices and interest rates. India's Mr. Modi appears well-equipped to tackle these challenges given his executive experience, pro-business record and full control of Parliament. Indonesia's Mr. Widodo, by contrast, is a political novice with uncertain economic views and minority support in Parliament. Yet Mr. Modi shrank from some reforms last year, including his initial opportunity to pare back fuel subsidies, whereas Mr. Widodo quickly curbed subsidies and increased spending on public works. We will learn more about both leaders as they work their first full budgets through Parliament. Cheaper oil has given them an economic break and a moment to press larger reforms, if they seize it.
Subject: Interest rates; Petroleum industry; Price increases
Location: India Jakarta Indonesia
People: Suharto
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645788184
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645788184?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Lastupdated: 2017-11-21
Database: The Wall Street Journal
Asian Shares Mostly Lower, Japan Leads Declines; Markets Rattled by Volatile Overseas Session, Concerns About Oil Glut
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract: None available.
Full text: Stocks in Japan fell Friday and investors fled to the safety of Asian government bonds, after a surprise move by the Swiss National Bank rattled currencies and as oil prices weighed on sentiment. Tokyo's Nikkei Stock Average was down 1.4%, leading most Asian benchmarks lower, after the Swiss National Bank at 1.20 to the euro. "There's a degree of twitchiness among investors because the start of the year hasn't done so well," said Shane Oliver, head of investment strategy at AMP Capital. The Swiss Bank's move heightens pressure for quantitative easing from Europe next week and is putting investors' focus on how central banks will react around the world, including in Asia, he added. FXCM Inc., the biggest retail foreign-exchange broker in Asia and the U.S., said clients suffered "significant losses" that meant the broker might be in violation of capital requirements. In New Zealand, a small currency trading house Global Brokers NZ Ltd. said it would close its doors. The majority of the company's clients in Swiss franc positions were on the losing side and sustained losses far greater than their account equity, the company said. Sentiment was also low in Asia after swings in markets overseas, including in the U.S. . The euro hit its weakest in three months against the yen in Asian trade, trading as low as ¥134.70 in the morning, although it later rebounded slightly to ¥135.60. The U.S. dollar fell to as low as ¥115.86 before making up some ground to ¥116.62. In Japan, retail trade stocks fell most with store operator Seven & I Holdings Co. Ltd. down 2.5%, and Uniqlo clothing brand owner Fast Retailing Co. Ltd. off 3.6%. Both businesses have global exposure. Fast Retailing Co. said Thursday it would improve working conditions in response to allegations earlier this month of . "The unfavorable currency and crude price effects on the market are naturally causing capital flight from Japanese risk assets and toward bonds," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. Ten-year bonds in South Korea, Malaysia, Singapore and Japan all rallied. The yield on South Korea's 10-year bond slipped to as low as 2.33%. Yields move inversely to prices. Stocks in Hong Kong were down 0.7%. Australia, where large commodity producers trade, was off by 0.6% as oil prices fell overnight, erasing gains from Wednesday's rally. Light, sweet crude for February delivery, the U.S. benchmark, settled down $2.23, or 4.6%, at $46.25 a barrel on the New York Mercantile Exchange, although it later rebounded to $46.70 in Asia trade. Stocks in Shanghai were up 1.2%. The benchmark Shanghai Composite Index has now gained 10 straight weeks on expectations for more monetary easing. Corrections & Amplifications FXCM said Thursday's unprecedented volatility in the Swiss franc triggered losses that left its customers owing the retail foreign-exchange broker about $225 million and that as a result, it might be in violation of capital requirements. An earlier version of this article incorrectly reported that FXCM said it had suffered significant losses that had wiped out its equity. Jerry Tan contributed to this article. Write to Chao Deng at Credit: By Chao Deng
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645797472
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rally on IEA Comments; IEA Lowers Forecast for Supply Increases This Year
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
Much of those losses came after the 12-member Organization of the Petroleum Exporting Countries decided in November not to cut output, as it sought to protect its position in the market, threatened by the booming U.S. shale industry.
Full text: Oil prices rallied Friday in a rare respite from their six-month collapse after international energy monitors lowered their forecast for supply increases this year, potentially alleviating the growing glut of crude sloshing around the globe. Still, analysts said the new outlook was only modestly bullish and attributed the day's gains to traders buying futures to close bearish bets against the market ahead of a long U.S. holiday weekend. The U.S. benchmark contract ended the day up $2.44, or 5.3%, at $48.69 a barrel. The gains helped U.S. oil futures rise 0.7% for the week, ending seven consecutive weeks of losses, the longest such streak for since 1986. The global Brent contract rose $1.90, or 3.9%, to $50.17 a barrel on the ICE Futures Europe exchange. Crude has lost more than half of its value since last summer as a combination of ample supply and lackluster demand spooked the markets. Much of those losses came after the 12-member Organization of the Petroleum Exporting Countries decided in November not to cut output, as it sought to protect its position in the market, threatened by the booming U.S. shale industry. On Friday, , saying the production cut is expected to bolster demand for OPEC's own output. "A price recovery--barring any major disruption--may not be imminent, but signs are mounting that the tide will turn," the IEA said in its closely watched monthly oil market report. On Thursday, OPEC lowered its forecast for 2015 demand for its oil to 28.8 million barrels a day, even as it produced 30.2 million barrels in December, an increase of 140,000 barrels a day over November. Libya reduced output by 200,000 barrels last month, but Iraq more than made up for it with a 280,000-barrel increase. "The problem is that we're still facing a very substantial surplus for at least the first half of 2015," Citigroup analyst Tim Evans said. "You're still just a very long way from a tighter balance that would mean inventories stop rising or actually go down. If the next downtick in global petroleum inventories is not until July, then I don't see any reason to be long these markets today." And Libyan output remains robust despite constant instability in the country, according to a note from research consultancy JBC Energy. Based on tanker data, the country appears to be exporting about 200,000 barrels of crude a day to global markets, only about a third lower than the peak level in October and November, JBC said. The long-term direction of the market remains anyone's guess. Commerzbank said in a note that traders appear ready for a rally given the heavy selling of recent weeks, though fundamental supply-demand data would suggest further deterioration. "We can expect the huge price fluctuations to stay with us for the time being," the bank said. Amid the mixed signals, uncertainty about where oil prices are headed is increasing market volatility. This week saw crude futures whipsaw between gains of up to 6% and losses of as much as 4%. In refined products, front-month February gasoline futures rose 5.94 cents, or 4.6%, to $1.3588 a gallon on the New York Mercantile Exchange. February diesel futures ended up 4.23 cents, or 2.6%, at $1.6656 a gallon. Write to Christian Berthelsen at and Georgi Kantchev at Credit: By Christian Berthelsen And Georgi Kantchev
Subject: Supply & demand; Petroleum industry; Market positioning; Inventory; Crude oil prices
Location: United States--US
Company / organization: Name: International Energy Agency; NAICS: 928120; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645823015
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645823015?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
North Sea Region Pays Price of Oil's Tumble
Author: Williams, Selina; Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Jan 2015: B.6.
Abstract:
Without their investment, there is a risk that some of the U.K. North Sea's remaining economically recoverable resources, estimated by industry experts at between 15 billion and 16.5 billion barrels of oil and natural gas, will end up as so-called stranded assets -- hydrocarbons that are too expensive to develop.
Full text: LONDON -- BP PLC said Thursday that it would lay off about 300 people in the North Sea hub of Aberdeen, Scotland, in the biggest sign yet of the problems besetting the U.K.'s primary oil-producing region. While the world-wide slide in the price of oil has focused attention on the U.S.'s relatively new shale fields -- which are partially responsible for the global oil glut -- it is the mature, high-cost fields such as those in the North Sea that seem likely to suffer most. At prices much below $75 a barrel or so, some of the North Sea's reserves might be too expensive to develop. BP said Thursday it is still committed to the region, and that its cuts of about 200 employees and 100 contractors -- out of a total of close to 3,500 onshore workers -- are part of a cost-reduction program. "Given the well-documented challenges of operating in this maturing region and in toughening market conditions, we are taking specific steps to ensure our business remains competitive and robust," BP's North Sea president, Trevor Garlick, said in a written statement. Energy companies such as Chevron Corp., BG Group PLC and Statoil ASA are reassessing capital-spending decisions that might have helped extend the oil province's life. Last month, ConocoPhillips said after a review of its North Sea operations that it plans to cut 230 U.K. positions by March. Small companies that aim to squeeze the last drops from older oil fields are struggling to raise financing. Without their investment, there is a risk that some of the U.K. North Sea's remaining economically recoverable resources, estimated by industry experts at between 15 billion and 16.5 billion barrels of oil and natural gas, will end up as so-called stranded assets -- hydrocarbons that are too expensive to develop. About 42 billion barrels have been extracted since significant oil and gas output first began in the 1970s. The region has been important for international oil companies that view it as a good counterbalance to investments in countries with greater political or security risks, such as in Africa or the Middle East. But before the oil-price slump, margins were already tightening because of rising costs and high taxes. Rates of return on North Sea oil and gas projects are about 15%, compared with 20% to 25% for other relatively mature offshore basins in politically stable countries, according to the U.K. Treasury. Annual oil and gas production from the North Sea has fallen about 70% since its peak in 1999, to roughly 1.4 million barrels a day. High and complex tax rates, as well as 15% annual inflation in rates for drilling rigs and other equipment, have kept costs high in the North Sea. In addition, much of the infrastructure, such as pipelines and platforms, is old and requires frequent investment in maintenance. Even when oil prices were more than $100 a barrel, some 1.5 billion barrels of remaining North Sea oil were uneconomic to develop, according to consultancy Wood Mackenzie. Now, with Brent crude under $50 a barrel, a further 1.4 billion barrels currently being considered for a final investment decision could be under threat. Brent North Sea crude for February delivery fell 2.1% to $47.67 in London Thursday, down more than 50% since June. "This oil price is terrible news for the North Sea," said Craig McCallum, who previously worked at Venture Production, a company that developed difficult fields in the North Sea. "There's not a lot of new oil developments that are going to work at $50 a barrel," he said. One project awaiting sanction is the $10 billion Rosebank development led by Chevron. Rosebank could eventually yield as much as 240 million barrels of oil equivalent. Situated 80 miles northwest of the Shetland Islands, in choppy waters about 3,600 feet deep, Rosebank is considered one of the most challenging environments in which oil companies operate globally. Bertrand Hodee, head of European oil and gas research at Raymond James, estimates that even with oil priced at $100 a barrel, Chevron would get just an 8% return on the project. "Our view is that it's going to be on the drawing board for a while," he said. Chevron, which doesn't provide break-even prices for its oil projects, said it has identified changes to the Rosebank development to reduce costs. Credit: By Selina Williams and Justin Scheck
Subject: Petroleum industry; Rates of return; Natural gas; Layoffs; Crude oil prices
Location: Aberdeen Scotland United States--US United Kingdom--UK
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: BG Group PLC; NAICS: 221210; Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 6100: Human resource planning; 8510: Petroleum industry; 9175: Western Europe
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2015
Publication date: Jan 16, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645828299
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645828299?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Looking for Value in Oil's Bargain Bin
Author: Lauricella, Tom
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Jan 2015: C.1.
Abstract:
[...]Mr. Young sees MLPs as a way to invest without having to rely on "if you build it, they will come" business models popular elsewhere throughout the energy exploration, production and services sector. Because transporters are paid based on volume, they can benefit from a drop in oil prices as lower prices at the pump lead to greater demand for gasoline.
Full text: Ensconced in a rambling, two-story house on a woody hillside in the town of Woodstock, N.Y., far from the oil fields of Texas or North Dakota, Roger Young is hunting for bargains among stocks created by the free-falling price of crude. Mr. Young, who is 69 years old and helps oversee $8.5 billion as a portfolio manager at Miller Howard Investments, has spent more than four decades picking energy stocks. He bought and sold through the Arab oil embargo of 1973 to 1974 and the oil-price surge of 1978 and 1979. Mr. Young spent the brutal economic downturn that followed the more-than-50% collapse of oil prices in the 1980s in Houston, where the skyline was filled with empty office towers and the dry cleaners asked customers to return wire hangers to save money. In an industry that has a long history of booms and busts, "a lot of people are learning Energy 101," he says. That history shows an oversupply of oil will be followed by production cuts, and in time, a rebound in oil prices. "Once the market gets a whiff of that supply response, it tends to react before you see the bottom of supply," he says. For now, Mr. Young says, investors are fleeing even stocks with solid prospects. Energy stocks within the S&P 500 have fallen 8.3% in the past three months, and the SPDR S&P Oil & Gas Exploration and Production exchange traded fund, which holds a basket of stocks in that corner of the industry, has lost 24.9% in three months through Thursday. The psychology, he says, "is anything with energy in its name has been fair game: 'I want out.'" Before sentiment turns, Mr. Young predicts more pain to come from the current collapse in oil -- the price of crude has fallen by about half since late June -- especially among smaller drillers that had borrowed heavily. And there were signs of excess in places like oil-booming North Dakota, where, he says, "the price of a decent room may rival the Plaza or Waldorf." "There will be a lot more headlines to come before this plays out, and they won't be positive headlines," he says. Investors often look to the past when trying to predict the future. With oil, there is a long history of swift ups and downs, with prices driven by global economic and geopolitical events. While those forces remain intact, Mr. Young says the past few years brought significant changes to energy investing, giving him a more optimistic long-term outlook. Technology and the emergence of U.S. shale-oil and natural-gas producers, he believes, have turned the business of providing energy infrastructure into a long-term growth industry. Mr. Young focuses much of his time on master limited partnerships, or MLPs, which earn money largely by charging drillers to transport or store oil and natural gas, then pay out their income to shareholders. The Alerian MLP index, the benchmark for the industry, is yielding 6.1%. Among the top MLP investments for Miller Howard are Enterprise Product Partners, which returned 13.4% including dividends in 2014, Energy Transfer Equity, which returned 44.7%, and Magellan Midstream Partners, which returned 34.8%, according to the firm. But MLPs haven't escaped the recent carnage as investors have worried that lower oil prices will lead drillers to cut back on production. Some investors also worry that high-yielding MLPs could suffer along with bonds should the Federal Reserve move quicker than expected to raise interest rates. The Alerian MLP index is down 7.1% over the past three months through Thursday. Still, Mr. Young sees MLPs as a way to invest without having to rely on "if you build it, they will come" business models popular elsewhere throughout the energy exploration, production and services sector. Because transporters are paid based on volume, they can benefit from a drop in oil prices as lower prices at the pump lead to greater demand for gasoline. "You have a backlog of projects that are either just being completed or just started construction, all with contracts," he says. As a result, he said, thanks to those projects coming online and planned production increases for gas and oil, even if no new projects were started, "you would have growth of distributions for the next three years." He notes that even amid the oil selloff, several MLP companies have announced dividend increases, and he expects more. The question for Mr. Young is: "What's the tipping point to make the current trajectory [for dividend increases] less steep?" And, he says, if crude prices are sustained below $75, "we'll probably have less steep growth." Having lived for many years in Houston and Denver, Mr. Young joined Miller Howard in 2008, moving to Woodstock. For 20 years, the firm has had its offices in a two-story house, once lived in by actor Lee Marvin. They soon will be moving into new offices closer to the village that will have solar power. Miller Howard's founder, Lowell Miller, has been investing in energy-related stocks since founding the firm and launching a portfolio focused on dividend-paying stocks in 1991. That strategy had a focus on utility stocks including pipeline operators. The firm ended up owning its first MLP in 1997, when Kinder Morgan Energy Partners, the first major energy MLP, bought one of the firm's pipeline stocks. At Miller Howard, Mr. Young is a co-manager on MLP strategy and on energy stocks broadly, such as the broader income equity strategy portfolio. Through the end of 2014, Miller Howard's MLP strategy was up 19% a year over the past five years and 9.9% in 2014, ahead of the Alerian MLP index, which is up 16.7% a year for the past five years and 4.8% in 2014. Though there is a tendency to view energy stocks as uniform, the least volatile are transporters of energy -- such as MLPs, says Mr. Young. While thinking on MLPs is negative right now, he expects that to change. "Psychology can change through proof of the business models," he says. Credit: By Tom Lauricella
Subject: Supply & demand; Master limited partnerships; Stocks; Growth industries; Natural gas; Crude oil prices; Petroleum industry; Investment policy
Location: Texas North Dakota
People: Young, Roger
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 16, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New Y ork, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645828383
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645828383?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Fall to Erode European Energy Firms' Earnings; Profits at Energy and Utility Companies Are Forecast to Drop Sharply
Author: Evans, Peter; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract: None available.
Full text: LONDON--The is casting a long shadow both now and into the future for European energy companies, but it could provide a timely boost for other sectors as the fourth-quarter earnings season approaches. Overall earnings on the continent-spanning Stoxx Europe 600 Index are expected to have risen during the most recent quarter, led by banks, auto companies and makers of consumer durables. But profits at energy and utilities firms are forecast to decline sharply, the first meaningful evidence of the damage plunging oil prices is wreaking on major corporations. Fourth-quarter earnings at big integrated oil companies, such as BP PLC, Royal Dutch Shell PLC and Total SA, are expected to fall an average of 24% in U.S. dollar terms, according to Barclays. In the U.K., where there are a higher proportion of energy-sector earnings than the rest of Europe, the slump in oil prices could take an average of 4% off fourth-quarter earnings across FTSE 100 companies, UBS said. Executives and analysts say that might be only the start of a long period of bad news. "Lower-for-longer oil pricing adds another layer of pain with near-term earnings," said Nomura analysts in a recent note. The pain is likely to be even sharper for smaller oil companies. Explorers with fewer assets are more exposed to falling oil prices than majors like BP and Shell because they can't rely on making money from other parts of their business when times are tough. U.K.-listed Tullow Oil PLC said Thursday it was making its , of $2.7 billion before tax. Tullow in part blamed unsuccessful drilling and lower oil prices for a $600 million write-down across all its assets, as well as $1.2 billion related to ventures that now have no prospect of commercialization. Tullow's move follows Premier Oil PLC's $300 million write-down on the value of its assets. The company also is likely to postpone an investment decision on its $2 billion Sea Lion development in the Falkland Islands to next year. "Everyone in the industry is looking for cost savings," said Tony Durrant, Premier's chief executive. While energy companies are the clear losers, the fall in oil prices is proving a . Analysts say auto makers, packaged-food companies and airlines--all of which count oil as a high proportion of input costs--are first in line to benefit. Unilever PLC, the world's No. 2 consumer-goods company after Procter & Gamble Co., spends around [euro]7 billion ($8.23 billion) a year on oil-based products, according to UBS analysis. Germany's Henkel AG estimates that around [euro]4.9 billion of its annual costs have high or moderate dependence on oil prices. Consumer-discretionary companies listed on the MSCI Europe Index, which is made up of the biggest companies from the 15 largest economies in Europe, are expected to report a 16.5% increase in fourth-quarter earnings compared with a year earlier, according to FactSet. For many companies, the benefits of a long-term decline in oil prices might be just beginning. Most are hedged on oil prices for between three and six months, and some for more than a year, meaning the reduction in costs would show through only toward the middle of 2015. The shipping sector already is making gains from lower oil prices. The cost of bunker fuel--which powers ships and makes up around 30% of costs for shipping operators--has halved to below $300 a ton from $600 in September. Denmark's Maersk Line, the world's largest container-shipping company and a unit of A.P. Møller-Mærsk A/S, estimates that a fall of $100 a ton in bunker fuel adds $100 million to annual savings. It is a similar story for airlines, for which fuel also represents about 30% of costs. Airlines globally are set to spend 5.6% less on fuel this year compared with their $204 billion combined fuel bill in 2014, even as they fly more and consume more oil, the International Air Transport Association projects. The benefit for airline earnings in Europe is more muted, though, with the strong dollar in which carriers pay for fuel offsetting some of the oil-price slump. Hedging has a significant effect as well: Many European airlines lock in fuel contracts early to have certainty over costs, which negates the immediate financial benefit. Ryanair Holdings PLC, the region's biggest budget airline, said it already has hedged 90% of fuel consumption for the financial year starting in April at prices above current spot rates. Jefferies analysts said in a note this week that upgrades to forecasts for European carriers "are more pronounced two years out, as hedging rolls off, although we expect investors to take this with a good pinch more salt given the extraordinary oil-market conditions." The most-immediate benefit could be for companies selling direct to consumers. Lower prices at the gas pumps mean more to spend in stores. In the U.K., major supermarkets have slashed the price of gasoline in recent weeks. Some smaller filling stations are selling gasoline for less than £1 ($1.52) a liter for the first time since 2009. "A sustained period of low oil prices would boost gross margins and lead to stronger consumer spending and confidence," said Steven Wood, a managing director at Moody's Investors Service. Robert Wall and Costas Paris contributed to this article. Write to Peter Evans at and Selina Williams at Credit: By Peter Evans And Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645837532
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645837532?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Price Ax Falls On Schlumberger
Author: Molinski, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]16 Jan 2015: B.1.
Abstract:
The world's largest oil-field service company, Schlumberger Ltd., said Thursday that it laid off 9,000 workers late last year, reducing global head count 7%.
Full text: The world's largest oil-field service company, Schlumberger Ltd., said Thursday that it laid off 9,000 workers late last year, reducing global head count 7%. The company took more than $1 billion in charges for the fourth quarter, including $300 million related to downsizing its staff of roughly 123,000. Profits for the quarter fell sharply as a glut of oil and tepid demand for fuel drove down the price of crude and demand for Schlumberger's services. Unrest in Libya and Iraq and international sanctions in Russia also took a toll on operations, the company said. Schlumberger also incurred restructuring costs of $800 million to write down its fleet of ships used to gather data on underground oil and gas reservoirs used by exploration companies. As the first major energy company to report financial results, Schlumberger is expected to set the tone for a sector hard hit by plunging crude-oil prices. The company said it anticipates a drop in spending for new oil and gas exploration this year. Schlumberger helps energy producers drill and frack wells so they can pump more fuel from the ground. So far, those energy companies have indicated they will spend 30% to 35% less in the U.S. and Canada this year, said James Wicklund, an energy analyst at Credit Suisse. Oil prices have fallen more than 55% since June to less than $50 a barrel in the U.S. and energy companies are trying to figure out where the bottom of the market is. On Thursday, the company also said it would raise its quarterly dividend by 25% to 50 cents a share. Shares in Schlumberger closed down 2.25% at $76.63, but ticked up slightly in after-hours trade. Fourth-quarter profit dropped to $302 million, or 23 cents a share, from $1.66 billion, or $1.26 a share, a year earlier. Those results include restructuring costs. Revenue rose 6% to $12.64 billion. --- Maria Armental contributed to this article. Credit: By Dan Molinski
Subject: Petroleum industry; Financial performance; Crude oil prices; Layoffs; Sanctions; Dividends; Stock prices; Company reports; Earnings per share
Location: Russia United States--US Iraq Libya
Company / organization: Name: Schlumberger Ltd; NAICS: 213111, 213112, 334419, 334513, 511210, 541512
Classification: 3100: Capital & debt management; 6100: Human resource planning; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 16, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645843288
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645843288?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
EU Consumer Prices Fall for First Time on Record; Sixteen Member Nations Saw the Numbers Drop in December; Oil's Drop May Continue the Decline
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The National Bank of Poland said Wednesday it remained open to the possibility of a cut in its key interest rate provided the current period of deflation continues and economic growth slows, as it showed growing concern over the level of the consumer-price index for the first time in the last few months.
Full text: Europe edged closer to deflation in December, as consumer prices across the European Union fell for the first time since records began in 1997. The data released by the EU's statistics agency add to fears that Europe could face a period of deflation, after showed that consumer prices in the eurozone, comprising countries that use the euro as their currency, fell for the first time in more than five years. Eurostat on Friday said consumer prices in the 28-nation bloc fell 0.1% in December from a year earlier, and confirmed last week's data that showed prices in the eurozone were 0.2% lower in December than in the year before, as measured in the 18 countries that were using the euro in late 2013. Lithuania adopted the euro this month. Sixteen EU members experienced an annual decline in consumer prices in December, up from just four in November. And with oil prices tumbling, inflation rates around the Continent appear likely to decline further in coming months. Among many economists and central bankers, there is a widespread belief that falling prices by themselves . For that chronic condition to take root, consumers and businesses have to cut back on spending because they expect prices to fall further, with the outcome being declines in output and employment that push prices even lower. The decline in prices across the Continent as 2014 ended heightens the risk that Europe may slide into such a deflationary spiral, although most central bankers say that is unlikely. To minimize the risk of deflation, central bankers appear ready to provide more stimulus. "This possibility is sufficiently dangerous for everyone to worry about it," said Benoît Coeuré, a member of the European Central Bank's executive board, in an interview with French daily Libération. The ECB has said it would , which include cheap bank loans and purchases of asset-backed securities and covered bonds, early this year, and decide whether to do more to ensure that annual inflation moves up and closer to its target of just below 2%. Other central banks across Europe face similar challenges. Sweden's Riksbank has it would consider if the outlook for inflation were to continue to worsen, including asset buying, lending to banks, a negative main interest rate and currency market interventions. The National Bank of Poland said Wednesday it remains open to the possibility of a cut in its key interest rate provided the current period of deflation continues and economic growth slows, as it showed growing concern over the level of the consumer-price index for the first time in the past few months. Whether the current period of declining prices becomes a more damaging episode of deflation will depend in part on how long it lasts. Economists at Barclays on Friday predicted that prices in the eurozone will be below their year-earlier levels during the first half of this year. While central bankers fear the longer-term implications of falling prices, the numbers appear to be providing a support to economic growth. The decline in prices in the 12 months to December was largely due to a . Europe is an importer of energy, and economists often compare a fall in prices of oil and natural gas to a tax cut, in that it leaves consumers with more money to spend on other goods and services, many of which are produced within the bloc. Across the EU, retail sales rose by 0.8% in both October and November, boosted by pickups in spending on items other than food and gasoline. That suggests consumer spending may have picked up again in the final quarter of last year, providing an essential support to growth in the absence of other drivers. That rise in spending appears to have supported a modest rise in industrial output, which increased in November for the third straight month, led by a significant pickup in the manufacture of consumer goods. Write to Paul Hannon at Credit: By Paul Hannon
Subject: Monetary policy; Central banks; Banking; Consumer Price Index; Economic growth
Location: Europe
Company / organization: Name: National Bank of Poland; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645843402
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645843402?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
IEA Slashes 2015 Forecast Increase in Non-OPEC Oil Supply; Price Recovery May Not Be Imminent But Signs Are Mounting That Tide Will Turn, Agency Says
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
According to the IEA, OPEC production rose by 80,000 barrels a day in December to 30.48 million barrels a day, marking its eighth straight month above the group's official output target.
Full text: LONDON--The collapse in oil prices is expected to slash growth in non-OPEC oil production this year, bolstering demand for the producer group's own output, the International Energy Agency said Friday, indicating the Organization of the Petroleum Exporting Countries' strategy to defend its market share may be working. The decision taken by the oil cartel in November to abandon its traditional role of stabilizing the market and in the face of falling prices has proved divisive even within the group. Oil prices, already under pressure from surging U.S. production and sluggish demand, and are now down more than 50% since June. , following steep losses this week. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $46.86 a barrel, up 1.4%. March Brent crude on London's ICE Futures exchange rose 1.2% to $48.84 a barrel. The sharp drop in oil prices is also hitting non-OPEC producers. Companies are slashing capital expenditure and the number of rigs drilling and drilling permits in the U.S. has already decreased, suggesting that in the coming months. "A price recovery--barring any major disruption--may not be imminent, but signs are mounting that the tide will turn," the IEA said in its closely watched monthly oil market report, as it slashed its forecast for the increase in non-OPEC oil supply this year by 350,000 barrels a day. The knock-on effect of that is an expected increase of 300,000 barrels a day in demand for OPEC's oil this year to 29.2 million barrels a day. Still, oil production from the U.S. is expected to remain robust this year, with supply growth slipping by just 80,000 barrels a day, according to the IEA. Oil output from Canada and Colombia is expected to weaken slightly more, adding to the easing in supply growth. Meanwhile, OPEC's oil output continues to exceed demand projections and the group's own output ceiling of 30 million barrels a day. According to the IEA, OPEC production rose by 80,000 barrels a day in December to 30.48 million barrels a day, marking its eighth straight month above the group's official output target. Georgi Kantchev contributed to this article. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Crude oil prices; Petroleum industry; Supply & demand; Cartels
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645843587
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645843587?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Rise Sharply; Session Breaks Five-Session Losing Streak as Oil Prices Rise
Author: Driebusch, Corrie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
More broadly, the decline in energy prices has added a cautious note to a generally positive outlook for the U.S. economy as the once-booming energy sector has begun laying off workers.
Full text: U.S. stocks rose sharply Friday, snapping a five-session losing streak and capping a week that saw continued wide swings in share prices. With a rise in oil prices giving a lift to energy stocks, the S&P 500 added 26.75 points, or 1.34%, to 2019.42. The Dow Jones Industrial Average rose 190.86 points, or 1.10%, to 17511.57. The Nasdaq Composite Index gained 63.56 points, or 1.39%, to 4634.38. Much of the focus Friday was on corporate earnings reports and on oil prices. On Friday, crude oil futures rose 5.3% to $48.69 a barrel. Shares of energy companies in the S&P 500 rose 3.2%, leading the index higher. Oil prices have fallen by more than half since June on fears of oversupply. The sharp declines have weighed most heavily on the energy sector, with shares of energy companies in the S&P 500 off roughly 24% in the past six months. More broadly, the decline in energy prices has added a cautious note to a generally positive outlook for the U.S. economy as the once-booming energy sector has begun laying off workers. "Investors have been waiting for a bounce in energy shares, and we're finally seeing it," says Jonathan Corpina, senior managing partner at brokerage firm Meridian Equity Partners. "Whether that bounce is sustainable we don't know, but I think it's making investors feel a little better about this market." U.S. stocks have been under pressure in recent sessions amid heightened price swings. For much of 2014 stock prices ground higher and volatility was low. But recent weeks have seen more frequent large moves higher and lower. On Tuesday, the Dow industrials swung 424 points during the session before ending slightly lower. Stocks extended their declines on Wednesday and Thursday, dragged down by worries about global economic growth and disappointing corporate earnings. "It has been quite a confusing week as volatility picked up meaningfully," said Anastasia Amoroso, global market strategist for J.P. Morgan Asset Management, which oversees about $1.7 trillion. "The biggest source of confusion is coming from whether falling oil prices is a good thing or bad thing for a global economy and for global stocks." So far this year, the Dow has fallen 1.8% and the S&P 500 has declined 1.9%. The Dow is off 3.3% and the S&P 500 is off 3.5% from their late-December record highs. The CBOE Volatility Index, which measures expectations for swings in the S&P 500, declined 6.4% to 20.95 Friday. Still, that left the VIX above its 10-year average of around 20, and well above the index's 2014 average of 14.2. Some traders expressed frustration with the dramatic swings in recent stock-trading sessions. "It's a very scary environment where stocks can move multiple percentage points on a speculative headline," said RJ Grant, associate director of equity trading at KBW Inc. "It's very difficult to trade in this environment." The broader gains come at a time when traders described investors as more hesitant to participate in the stock market. "There's lackluster demand to buy stocks right now," said Brett Mock, managing director at brokerage JonesTrading Institutional Services LLC. He partially blames investors' concerns about global economies. European markets continued to be rattled by the decision of Switzerland's central bank to end its policy of capping the Swiss franc at 1.20 to the euro. Switzerland's blue-chip SMI benchmark fell 6%. On Thursday, the index tumbled 8.7%. Money managers said even though they were shocked by Switzerland's move, investors mainly shrugged it off. "For U.S. investors, things are looking pretty healthy from a consumer standpoint, and the Swiss National Bank news seems pretty esoteric," said Erik Davidson, chief investment officer for Wells Fargo Private Bank, which manages $190 billion. Investors are now looking ahead to Thursday's meeting by the European Central Bank. Many expect the ECB to unveil new efforts to ease monetary policy through purchases of bonds in an attempt to goose economic growth and lift inflation expectations. The Stoxx Europe 600 rose 1.1%. In commodity markets, gold futures added 1% to $1276.90 an ounce. The yield on the 10-year Treasury note climbed to 1.815% from 1.777%. Yields fall as prices rise. In corporate news, Goldman Sachs Group Inc. said its fourth-quarter net income fell 7.1% as its revenue from trading and investment banking slid. Shares declined 1.26, or 0.7%, to 177.23. Shares of Precision Castparts Corp. fell 20.09, or 9.1%, to 199.63after the maker of metal components and products said results for the December quarter were hurt by lower demand from oil and gas distribution customers. Corrections & Amplifications On Friday, crude oil futures rose 5.3% to $48.69 a barrel. An earlier version of this article incorrectly reported that they rose 2.4% to $47.37 a barrel. Write to Corrie Driebusch at corrie.driebusch@wsj.com Credit: By Corrie Driebusch
Subject: Prices; Dow Jones averages; Statistical data; Energy industry; Stock exchanges; Investments; Volatility; Securities markets
Location: United States--US
Company / organization: Name: JonesTrading Institutional Services; NAICS: 523120; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645884903
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645884903?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Inflation Slows Amid Plunge in Oil; Soft Growth in Consumer Prices Could Complicate Fed's Thinking on Interest-Rate Increases
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The Fed, whose mandate includes price stability, monitors core inflation closely for signs of whether temporary ups and downs in food and energy costs are affecting consumer price gains more broadly.
Full text: U.S. consumer prices rose at the slowest annual pace in more than five years in December and are poised to slow further in coming months amid the global plunge in oil prices. The consumer-price index, a broad gauge of inflation that measures what Americans pay for everything from coffee to gasoline and airline tickets, rose just 0.8% in December from a year earlier, the Labor Department said Friday. That was sharply slower than the 1.3% annual growth pace seen in November, and the lowest annual reading since October 2009. in coming months, Capital Economics senior U.S. economist Paul Dales said. The national average price for a gallon of regular gas was $2.08 on Friday, down $1.22 from a year earlier, . But unlike the eurozone, where potential deflation reflects a weak economy plagued by high unemployment and weak demand, "the U.S. experience is definitely going to be fleeting and temporary and overall positive for the economy," Mr. Dales said. Excluding the volatile categories of food and energy, so-called core prices rose 1.6% on the year, slowing from a 1.7% annual gain in November and 1.8% annual growth in October. Investors and economists will be watching the core for clues as to the Federal Reserve's potential timing of interest-rate increases. The Fed, whose mandate includes price stability, monitors core inflation closely for signs of whether temporary ups and downs in food and energy costs are affecting consumer price gains more broadly. The Fed is on track to raise interest rates, which have been near zero for six years, sometime this year. , , which she said should help boost consumer spending and the broader economy. But a sharp drop in core inflation, or deterioration in expectations for future inflation, could prompt officials to delay rate increases. "The behavior of core inflation over the next few months will be pivotal to the timing of Fed [rate increases], especially with wage growth ending 2014 on a softer note," Credit Suisse economist Jay Feldman said in a note to clients. If wage growth and inflation are already low, and a decline in oil prices "gets embedded in people's expectations, then it is going to be harder to hit our 2% inflation target than we may have thought," . History shows consumers tend to separate short-run inflation pressures from longer-run price factors. In the mid-1980s, the late 1990s and the early 2000s, when oil prices dropped sharply, consumers lowered their expectations for how inflation would perform in the next 12 months, according to the University of Michigan's monthly survey of consumer sentiment. But their outlook for inflation in the next five years remained quite stable, usually hovering around 3%. In the early January sentiment report released Friday, the one-year inflation expectations dropped to 2.4%--the lowest in more than five years--from 2.8% in December. The five-year expectations held at 2.8%, roughly the same rate seen over the past year. Past periods of declining oil prices also haven't dragged core prices down in a significant way. In 1986 and 1987, falling energy prices sent headline inflation lower but core prices remained on a steadier path, a pattern repeated in the late 1990s and again in the early 2000s. Today, sluggish inflation in Europe is widely seen as a signal of underlying weakness in the economy. , raising expectations that the European Central Bank will soon announce new stimulus measures. The U.S. economy, on the other hand, is in far better shape. , according to the Labor Department. , its strongest pace in 11 years. The Commerce Department will release its first official estimate for fourth-quarter GDP on Jan. 30. Forecasting firm Macroeconomic Advisers on Friday estimated the economy grew at a healthy 3.2% pace in the final three months of 2014. Consumer spending generates more than two-thirds of U.S. economic output. While wage growth remains sluggish, even-lower inflation is boosting workers' spending power. Average hourly earnings fell 0.2% in December from the prior month, but rose 0.1% in inflation-adjusted terms, . On a month-to-month basis, Friday's inflation report showed that falling energy prices helped drive prices down by a seasonally adjusted 0.4% in December, its largest one-month decline in six years. Core prices were unchanged last month from November. The sharp drops in the price of gas and fuel oil last month were partly balanced by . Prices climbed for bread, beef, dairy products and fresh vegetables, but declined for fresh fruit, butter and pork. On the whole, food prices rose 3.4% in 2014, up from the prior year's 1.1% increase. Last month also saw prices rise for medical services and shelter but decline for apparel and airline tickets. Kathleen Madigan contributed to this article. Write to Ben Leubsdorf at Credit: By Ben Leubsdorf
Subject: Inflation; Consumer Price Index; Statistical data; Price increases
Location: United States--US
People: Rosengren, Eric
Company / organization: Name: Credit Suisse Group; NAICS: 522110; Name: University of Michigan; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645884963
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645884963?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Reliance Industries Profit Falls 4.5%; Profit Declines for the First Time in More Than Two Years as Fall in Oil Prices Hurts
Author: Chaturvedi, Saurabh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
NEW DELHI--Reliance Industries Ltd. Friday reported the first decline in quarterly profits in more than two years as falling global crude oil prices hurt refining margin.
Full text: NEW DELHI--Reliance Industries Ltd. Friday reported the first decline in quarterly profits in more than two years as falling global crude oil prices hurt refining margin. Net profit for India's largest private-sector refiner in the three months to Dec. 31 fell 4.5% to 52.56 billion rupees ($845 million), from 55.02 billion rupees a year earlier. However, it was broadly in-line with analysts' expectations of 52.29 billion rupees, which was the average forecast in a poll of six brokerages by The Wall Street Journal. Sales during the quarter fell 21% to 935.28 billion rupees from 1.18 trillion rupees last year. The decline was smaller than the expectations of analysts. They had forecast revenue of 818.54 billion rupees. Reliance's weak results underscore the challenges for its main refining and petrochemicals businesses, which have been struggling to maintain profit growth due to weak overseas demand. An almost 60% decline in crude oil prices since June have further weighed on the company's profits. Refining margin, or how much the company earns by converting each barrel of crude oil into fuel products, fell to $7.3 from $7.6 last year. Growth in its exploration and production business has also been hurt by a sharp decline in production at its main KG-D6 offshore gas block. The deposit on India's east coast is the country's largest gas discovery. The company says output from the block has been falling due to geological factors, although the government has imposed penalties--currently totaling around $2.5 billion--on it for failing to meet production commitments. The matter is currently in arbitration. In recent years, Reliance has been investing in sectors such as telecommunications, retail, security, financial services, hotels and media as it seeks to diversify revenue sources and reduce dependence on the country's heavily-regulated oil and gas sector. It has also purchased stakes in shale gas assets in the U.S. Write to Saurabh Chaturvedi at Saurabh.Chaturvedi@wsj.com Credit: By Saurabh Chaturvedi
Subject: Crude oil; Petroleum industry; Corporate profits; Crude oil prices
Location: India
Company / organization: Name: Reliance Industries Ltd; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645897336
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645897336?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
RWE to Complete Dea Sale By March; RWE Agrees to Lower Price to Reflect Oil Slump
Author: Drozdiak, Natalia
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The German utility said it would divest Dea at a discount to LetterOne, a group of Russian investors led by entrepreneur Mikhail Fridman, to reflect the fall in the oil price and the changed market environment, a company spokesman said.
Full text: FRANKFURT--RWE AG said on Friday it has agreed to sell its oil and gas unit Dea to LetterOne by early March for 5 billion euros ($5.81 billion), [euro]100 million less than previously agreed, to reflect slumping oil prices. The German utility said it would divest Dea at a discount to LetterOne, a group of Russian investors led by entrepreneur Mikhail Fridman, to reflect the fall in the oil price and the changed market environment, a company spokesman said. RWE initially agreed to the sale in March last year when the price of oil was still at $110 a barrel. The price of oil has plummeted more than 50% since then, leading oil and gas majors such as BP PLC and Schlumberger Ltd to on lower profits. RWE had initially wanted to close the sale of its Hamburg-based unit by the end of 2014 but has faced setbacks in getting government consent from countries where Dea has significant operations. The German government and the European Union signed off on the deal in August. But RWE has said U.K. authorities are hesitant to give their approval because they are concerned that potential sanctions on the Russian buyers could endanger the unit's operations in the North Sea. In December, RWE's Chief Executive Peter Terium said "I think we will be able to offer a solution in which those worries are being taken care of." At the time, he also emphasized the U.K. can't stop the whole deal but only "the British part, which is just 20%." In the rejigged transaction, RWE said LetterOne would now keep Dea's U.K. activities separate from the rest of the company's business for a number of years. In the event that sanctions are imposed on the buyers, RWE said it would keep the option to repurchase Dea's U.K. business during the first year after the sale is completed. RWE has said Dea's U.K. business is worth about [euro]1 billion. The company's shares jumped 6.6% at [euro]24.00 in early afternoon trading in Frankfurt following the news. "We are on track!" said Mr. Terium. The company said it still doesn't have the letter of comfort it needs from the U.K. government but hoped that the authorities will approve the deal with this new structure. Dea has operations in 14 countries around the world. It mainly produces oil and gas in the North Sea, but also explores and develops new fields in North Africa, the Caspian and South America. The Dea sale is part of RWE's efforts to cut its [euro]31 billion debt-pile and would be booked in 2015. RWE backed its 2014 guidance of operating profit between [euro]3.9 billon to [euro]4.3 billion and recurrent after-tax profit between [euro]1.2 billion and [euro]1.4 billion. Write to Natalia Drozdiak at Credit: By Natalia Drozdiak
Subject: Euro; Petroleum industry; Corporate profits
Location: United Kingdom--UK North Sea
Company / organization: Name: European Union; NAICS: 926110, 928120; Name: RWE AG; NAICS: 221122, 221210, 221310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645897472
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645897472?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norway Sticks to Budget Plan Despite Oil Slump; Finance Minister Will Sanction Extra Fiscal Stimulus if Outlook Were to Worsen
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
Ms. Jensen said monetary policy and the exchange rate had proven to be useful "shock absorbers" for the economy so far, as had the country's sovereign-wealth fund and solid banking sector.
Full text: OSLO--The finance minister of Norway, Western Europe's biggest oil producer, said on Friday that she would sanction extra fiscal stimulus if the economic outlook were to worsen further but for now her budget plan for 2015 still holds despite the rapid drop in crude prices. Norway's oil revenues have been hit hard by a 50% drop in prices over the past six months and oil companies operating in Norway are set to reduce their capital expenditure by 15% on the year in 2015, the government's petroleum directorate said in a report on Thursday. About 1 in 11 workers in Norway are employed by businesses exposed .Siv Jensen After consultations with the head of the central bank and the prime minister on Friday--described as a "crisis meeting" in local media--Finance Minister Siv Jensen sought to downplay the need for the government to act now to support the economy. "Some are quick to use the word crisis. I want to underline that this is not a crisis," she said. Ms. Jensen said monetary policy and the exchange rate had proven to be useful "shock absorbers" for the economy so far, as had the country's sovereign-wealth fund and solid banking sector. She said Norway's unemployment was low, its employment rate was high and the economy was growing. "This is a good starting point for an economy facing an adjustment," she said. that the country could be in for a hard landing after years of healthy growth and rising levels of prosperity. Analysts had wondered ahead of the meeting on Friday whether the government might launch new measures to support the economy, such as investments in infrastructure projects. "If the situation gets worse, we are ready to present the measures that are needed, for now we think the budget is well suited to the situation," Ms. Jensen said. The budget for this year included plans to spend more of Norway's oil money, which it keeps in the world's largest sovereign-wealth fund, as well as a cut on a tax on wealth. Norway's main defense against the slump in oil has so far been monetary policy, and a lower oil price was cited by the central bank when it to 1.25% in December, and signaled a 50% chance of another cut within six months. As the oil price has fallen, the Norwegian krone has weakened to around 7.60 kroner to the dollar from 6.10 kroner last summer which has helped the competitiveness of Norway's big exporters such as the fertilizer producer Yara and aluminum producer Norsk Hydro. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Monetary policy; Petroleum industry; Central banks; Budgets
Location: Norway Western Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645905463
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645905463?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Repsol Abandons Drilling off Canary Islands; Spanish Oil Company Says Controversial Exploration Project Lacks Promise
Author: Bjork, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract: None available.
Full text: MADRID--Repsol on Friday said it would abandon drilling off the Canary Islands, ending a year-long conflict that had pitted the Spanish oil company and central government against islanders worried about the effect oil extraction may have on the environment. An exploratory well reaching more than 3,000 meters below sea level found methane and hexane gases but it "lacked the necessary volume and quality to consider future extraction," Repsol said. The company said it would seal off the well within a week and that it won't carry out a previously planned second drilling. The well closure puts a cork in a that began over a decade ago, when seismic studies first suggested there could be substantial amounts of oil off the coast of the islands of Lanzarote and Fuerteventura. Spain, which relies on imports for almost all of its oil, at the time approved a plan by Repsol to drill for oil. However, the regional government and some local governments in the Canary Islands objected. The exploration program got tangled up in the courts, resulting in its suspension. In 2012, Spain again , arguing that the country would benefit from reducing its reliance on oil imports. Regional and local governments appealed the decision, saying the proposed drilling would damage environmentally sensitive areas and disrupt tourism, but a Spanish court rejected the appeal. The head of Lanzarote's local government, Pedro San Ginés, said the Spanish government should guarantee that the well--located 60 kilometers off the coast of the island--is sealed off permanently without spills and withdraw permits to drill further exploratory wells in the area. Environmental agencies had also put up a staunch fight. An online petition against the drilling promoted by such organizations as the World Wild Fund for Nature, Oceana and Greenpeace attracted more than 200,000 signatures against the project. WWF said it "celebrated" the end of the drilling in an area frequented by whales and dolphins. The NGO, with backing from the island's governments, has proposed to turn the area where drilling took place into a sanctuary for these animals. The central government said the probability of finding oil in the area had always been low, estimated at below 20%. "In a country with such a large energy dependence I don't think it's bad to know if we have or don't have [oil]," said Soraya Sáenz de Santamaría, Spain's deputy prime minister. Write to Christopher Bjork at Credit: By Christopher Bjork
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645905593
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645905593?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Market Dances on the Edge; Brent, WTI Oil Prices Get Closer, Pointing to More Declines
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
On Friday, the International Energy Agency reported preliminary data showing excess stocks in the industrialized world in December had reached their highest level since August 2010.
Full text: Like dance partners, it is best for oil companies when the two big benchmark prices don't tread on each other's toes. That Brent and West Texas Intermediate crude prices are tripping over each other portends further price falls. Brent's premium to WTI, the main U.S. benchmark, has shrunk to less than $2 a barrel, roughly half where it started the year and far below the five-year average of about $10. Brent even traded at a discount to WTI earlier this week. That is weird, as it can make it more attractive for refiners on the Gulf of Mexico to buy Brent-linked barrels rather than WTI. This is due to the relative prices of shipping oil either across the Atlantic or down a pipe from the storage and trading hub at Cushing, Okla. Brent's premium is down across the oil-futures curve. A year ago, Brent futures for 2015 were, on average, about $15 a barrel, or around 15%, higher than WTI futures. Now, the premium is less than $3.90, or 7%. A similar trend has played out for 2016 futures. While oil prices have fallen in general, near-dated Brent futures have collapsed more sharply than those for WTI. The front-month Brent contract now trades at a discount of $10, or 17%, to the 12-month contract, versus just $7.50, or 14%, for WTI. In other words, the futures curve has steepened faster for Brent than for WTI. That is a worrying echo of a subtle change that happened in futures markets last summer. Back then, Brent's curve flipped from a situation where near-dated prices were higher than those further out to being at a discount, as they are today. That was a sign that excess oil supply was building up in the Atlantic market, and that excess worked its way back up through the Gulf Coast to the U.S. Oil stocks at Cushing bottomed out in July and started rising again; WTI tumbled soon after. On Friday, the International Energy Agency reported preliminary data showing excess stocks in the industrialized world in December had reached their highest level since August 2010. Once again, barrels in the Atlantic market are looking for a home. One obvious destination: America's refineries, displacing domestically produced barrels. Stocks at Cushing have almost doubled since July, but the tanks are still only about 40% full. Expect them to keep filling in the months ahead and, as storage options shrink, prices to take another leg down. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Futures; Price increases; International
Location: United States--US Gulf of Mexico
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645914435
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645914435?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheaper Heating Oil Fuels Billions in Savings in Northeast; Key Source of Winter Warmth Falls Along With Crude Costs
Author: Kamp, Jon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The steep decrease in prices is also largely good news for regional oil dealers, which are often small, family-owned businesses that have lost business to an expanding web of natural-gas mains for decades.
Full text: On top of the broad savings Americans are reaping from cheaper gasoline, plummeting oil prices stand to bring residents in the Northeast billions more in savings this winter when they fill up their home heating-oil tanks. An estimated 6.2 million U.S. homes rely on heating oil for seasonal warmth, the vast majority in the Northeast. The region--stretching from Maryland to Maine--accounts for about 87% of the heating fuel's use, according to federal data. The fuel is delivered by truck and pumped into storage tanks, which are often in the basement. Heating a house with oil has been much pricier than using natural gas for several years, imposing a burden on homeowners who can easily burn through 1,000 gallons of oil every winter. But as the price of crude falls world-wide, the current average price for heating oil in the U.S. has dropped $1.10 from a year ago to under $3 a gallon for the first time in more than four years, the U.S. Energy Information Administration said. Based on average wintertime consumption, a dollar-per-gallon in savings over the whole heating season could mean roughly $3 billion in savings for Northeast residents, said Chris Lafakis, a senior economist at Moody's Analytics. This translates into hundreds of dollars in savings with each heating-oil fill-up, providing some much-needed relief for people who struggle to pay energy bills. Dorothy Perkins, a 65-year-old retiree in coastal Lamoine, Maine, estimates she and husband Gary, a part-time Wal-Mart worker, had to cobble together more than $4,000 to keep their furnace humming last winter. This was despite closing off some rooms and huddling under blankets as their thermostat was set at just 60 degrees. Her sister, overwhelmed by high energy costs, had to come by temporarily with her two cats. "It was a struggle," Mrs. Perkins said. "I don't know many people that have that much money." Indeed, heating-oil costs remain a hardship for many residents in the region despite the drop. The Washington Hancock Community Agency in Maine, a nonprofit group that helps provide heating assistance, is getting as many calls as ever for help, especially as the weather turns colder, Executive Director Mark Green said. The situation in Maine is particularly acute as no state relies more on heating oil. The state, which has limited pipeline access to natural gas, has nearly two-thirds of its homes using oil and other "combustible liquids" for warmth, according to federal Census data. The steep decrease in prices is also largely good news for regional oil dealers, which are often small, family-owned businesses that have lost business to an expanding web of natural-gas mains for decades. Lower prices means paying less to fill trucks and better odds that customers can pay bills on time, said Michael Ferrante, president of the Massachusetts Energy Marketers Association, which represents heating-oil firms in the state. While federal data show natural gas remains a cheaper fuel nationwide, in pipeline-constrained Maine, gas on average is actually more expensive now for residential customers, once oil prices are converted into a comparable unit of measurement, according to Republican Gov. Paul LePage's energy office. The most recent Maine numbers show average heating-oil prices of $2.63 a gallon, down $1.18 from a year ago. . Privately held Lincoln Paper & Tissue LLC in central Maine switched to gas instead of heating oil to run drying equipment in 2012, but has the ability to switch back if oil becomes cheap enough, said Keith Van Scotter, the company's chief executive. The plant makes dyed napkins commonly sold in party stores. Elsewhere in Maine, suddenly lower oil prices may cool consumers' appetite to switch fuels, at least for now. "We saw the sign-up rate start to drop off when oil prices started to drop," said Dan Hucko, a spokesman at Iberdrola USA's Maine Natural Gas, a small utility there. Gas utilities in Massachusetts, Connecticut, New York and Pennsylvania said they haven't yet seen that effect. Mr. Lafakis, the Moody's economist, said natural gas is still a better pricing bet for homeowners over the long haul. Gas is steadily helping replace heating oil overall. For now, oil users will enjoy the ride while it lasts. "It's fantastic knowing that the price has gone down," said Mrs. Perkins, the Maine resident, who topped off with 129 gallons on Monday to take advantage of low prices. "But it's not going to stay." Write to Jon Kamp at Credit: By Jon Kamp
Subject: Natural gas; Petroleum industry; Heating; Winter; Cost control
Location: United States--US Maine Maryland
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Wal-Mart Stores Inc; NAICS: 452112, 452910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645928506
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645928506?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Slump Claims Hedge Fund Abydos; London-Based Fund Called the Bottom of the Market Too Early
Author: Fletcher, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
A September 2014 letter to investors, reviewed by The Wall Street Journal, shows that the Abydos fund lost 13.5% that month largely as a result of a fall in oil prices, which affected energy companies, such as the Canadian midcap stocks owned by the fund.
Full text: London-based Abydos Capital Management has become the latest hedge fund victimized by the slump in oil prices after calling the bottom of the market too early. The commodities equities fund, which was set up by former BlueGold founding partner Jean-Louis Le Mee in 2012 and based on London's upmarket Piccadilly, shut mid-December after large demands from investors for their money back. "We were forced to liquidate 90% of the book in six weeks to meet redemptions," Mr. Le Mee told The Wall Street Journal. "Not a pleasant experience." A September 2014 letter to investors, reviewed by The Wall Street Journal, shows that the Abydos fund lost 13.5% that month largely as a result of a fall in oil prices, which affected energy companies, such as the Canadian midcap stocks owned by the fund. That performance moved the fund, which had $130 million in assets at that time, to a 5.9% loss for the first nine months of the year. The fund had made a small loss in 2012 and a small profit the following year. Mr. Le Mee declined to disclose performance for 2014 as a whole. The letter also said Mr. Le Mee believed the selloff in oil prices was overdone and the fund had removed some short positions on Brent and WTI oil and slightly increased the fund's risk. "The correction we have just witnessed in energy is MASSIVELY overdone and we expect energy shares to make a big comeback in the latter stage of the calendar year," Mr. Le Mee wrote in the letter. Oil has tumbled to below $50 from more than $100 in early September, taking many traders and hedge fund managers by surprise. The that Brevan Howard, which is , suffered heavy losses on derivatives contracts despite correctly betting that the oil price would fall. Write to Laurence Fletcher at Credit: By Laurence Fletcher
Subject: Hedge funds; Petroleum industry; Prices; Energy industry
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645928616
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645928616?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Lobbyists Turning Down Heat on Oil Exports; Sen. Ted Cruz in Difficult Position as He's Urged to Back Off From Amendment That Could Help His Home State
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
For months, the nation's oil and natural-gas industry has been urging Congress and the Obama administration to lift the decades-old ban on oil exports, arguing that doing so would bring jobs and geopolitical leverage to the U.S. Now, however, with an energy bill being debated in Congress for the first time in years, industry officials are urging lawmakers to wait, saying they want more time to lobby before senators cast votes.
Full text: For months, the nation's oil and natural-gas industry has been urging Congress and the Obama administration to lift the decades-old ban on oil exports, arguing that doing so would bring jobs and geopolitical leverage to the U.S. Now, however, with an energy bill being debated in Congress for the first time in years, industry officials are urging lawmakers to wait, saying they want more time to lobby before senators cast votes. The issue is arising now because the Senate is debating the Keystone XL pipeline under a process in which senators are being allowed to offer a wide range of amendments on various energy issues. Sen. Ted Cruz (R., Texas), whose home state produces nearly 40% of all U.S. oil, is sponsoring an amendment to lift the export ban. The situation has set up a peculiar dilemma for an industry newly empowered with their Republican allies now controlling both chambers of Congress: The companies have a rare opportunity to strike on oil exports with the Keystone bill on the Senate floor, but fear the timing may be off for the export ban. "I don't think the issue is quite ready yet," Ryan Lance, CEO of Houston-based ConocoPhillips, said in an interview Wednesday during a visit to Washington to talk to lawmakers about oil exports, among other issues. "I don't think we've done enough advocating and educating on all the issues around crude-oil exports." The timing puts Mr. Cruz in the difficult position of either pushing his amendment, which would mean going against an industry with which he generally aligns, or backing off from an amendment he believes in and that could benefit his home state. Phil Novack, a spokesman for Mr. Cruz, said he offered the amendment because he thinks it is "good, pro-growth policy." Mr. Novack wouldn't say whether Mr. Cruz was pushing forward with his amendment: "We look forward to seeing how the legislative process plays out," Mr. Novack said. One energy lobbyist said officials in both the industry and on Capitol Hill have urged Mr. Cruz not to push for a vote. "Sen. Cruz is now reconsidering the wisdom of pressing for a vote at this time," said the lobbyist, adding that a vote now would be premature. This lobbyist said at least 35 senators don't have clear positions on the issue and may vote against the amendment for fear of being criticized for any rise in gas prices. "Senators hesitate to move around once they started voting a certain way," the lobbyist said. "Why take the risk now? The bill is not going anywhere." The Senate is scheduled to begin voting on amendments to the Keystone bill Tuesday, with a final vote expected in the next couple of weeks. Citing his administration's review process over the pipeline, President Barack Obama has vowed to veto the bill. Congress first passed laws banning oil exports in the 1970s after the Arab oil embargo sent gasoline prices skyrocketing. Companies can export refined fuels such as gasoline and diesel but not oil itself, except in limited circumstances that require a special license from the government. Energy executives are seeking to persuade lawmakers that the U.S. can afford to export crude oil now that the country is producing more oil than nearly every other country. The U.S. still imports a lot of oil, but the amount of petroleum consumed from foreign sources, 33%, is at its lowest level since 1985. More than a dozen oil companies, including ConocoPhillips, Pioneer Natural Resources and Hess Corporation, launched a coalition in October to lobby Washington to lift the ban. The coalition shares the view expressed by Mr. Lance that the Keystone bill isn't the place to do it, and isn't lobbying for a vote, according to a person involved in the effort. American Petroleum Institute President and CEO Jack Gerard, who has said repealing the export ban is one of the trade group's top goals for 2015, struck a similar tone as Mr. Lance, whose company is a member of API. "In the current construct, the direction of the leadership in the House and Senate is to keep the Keystone XL pipeline [bill] narrowly focused," said Mr. Gerard, who added: "There will come a time to have the oil-export discussion." A spokesman for Senate Majority Leader Mitch McConnell (R., Ky.), reiterated Mr. McConnell's stated pledge to allow votes on all amendments. He wouldn't comment on whether Mr. Cruz's proposal would receive a vote. Due in part to a more-than-63% increase in U.S. oil production since 2009, global oil prices have dropped by 50% in the last several months, and U.S. gasoline prices are lower than they have been in five years. The average price for a gallon of gasoline on Thursday was $2.10, according to EIA. Despite this recent change in production and plummeting gas prices, any effort to remove the ban is a political minefield that Republican leaders must navigate. Proponents of exports face a tricky calculus, partly because of the fear of returning to higher gasoline prices. Companies that operate oil refineries present additional opposition. Refiners typically align with oil producers on policy matters, but on this issue they have parted ways as their bottom lines benefit from the glut of U.S. oil. Refineries are exporting record amounts of refined products and are concerned about losing that source of profit if exported oil goes to refineries overseas. But both sides agree a vote is premature. "We think a vote is terribly premature," said Jeff Peck, a lobbyist for Washington, D.C.'s Peck Madigan Jones, which lobbies on behalf of four refineries that are opposed to exporting oil. "If the Senate is going to evaluate the controls on crude oil exports, Members should proceed in a thoughtful and deliberate way." Write to Amy Harder at Credit: By Amy Harder
Subject: Petroleum industry; Pipelines; Exports; Bills; Gasoline prices; Legislators; Lobbyists
Location: United States--US
Company / organization: Name: Congress; NAICS: 921120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645928627
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645928627?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Moody's Cuts Russia's Ratings to Brink of Junk; Ratings Firm Cites Free-Falling Ruble, Plunging Oil Prices
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
Moody's, which lowered its ratings one notch to Baa 3, said it would be reviewing the country's balance sheet, particularly its foreign-currency-reserves cushion, given the risk of oil prices falling further at a time when Russian banks' access to international markets remains blocked by international sanctions.
Full text: Moody's Investors Service on Friday cut its ratings on Russia to the brink of junk territory, and signaled possible further downgrade, citing the effect of plunging oil prices and the . The downgrade with those from Standard & Poor's Ratings Services and Fitch Ratings. Moody's, which lowered its ratings one notch to Baa 3, said it would be reviewing the country's balance sheet, particularly its foreign-currency-reserves cushion, given the risk of oil prices falling further at a time when Russian banks' access to international markets remains blocked by international sanctions. Still, Moody's noted, Russia's balance sheet "remains ostensibly very strong." Moody's lowered the government bond rating along with the country ceilings for foreign-currency debt one notch to Baa 3 and local-currency debt and deposits also one notch to Baa 2. It kept its country ceiling for foreign currency bank deposits at Ba1/Non Prime, below investment grade. The rating firm said it now expects Russia's real gross domestic product to grow around 5.5% in 2015 and 3% in 2016, bringing real growth over the 10-year period through 2018 to "virtually zero." Higher interest rates and rapidly rising inflation, Moody's warned, will further squeeze consumers' disposable incomes, while restricted access to international funding will continue to curtail banks' ability to provide credit. Due to the high level of uncertainty, consumers are likely to save, rather than spend, further hurting the country's economic recovery, Moody's said. Write to Maria Armental at Credit: By Maria Armental
Subject: Credit ratings; Banking industry; Balance sheets; Bond ratings; International finance
Location: Russia
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645955025
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Export Myths; Lifting the ban will increase U.S. supply and energy security.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The federal Government Accountability Office, Congressional Budget Office, the Brookings Institution, Aspen Institute and IHS consultants have published studies showing that more oil exports would benefit U.S. consumers.
Full text: The new Congress is set to make the biggest changes in U.S. energy policy in nearly a decade, against the backdrop of the domestic shale boom. This represents major progress, assuming that some Republicans aren't intimidated by economic myths about energy security. The first big Senate debate concerns approval of the Keystone XL pipeline, which seems likely to pass. The GOP majority also wants to speed up approvals for liquid-natural gas terminals, reduce limits on drilling, and block new regulatory roadblocks from the Administration. These are all pro-growth moves. But the Keystone debate is taking place under new Majority Leader Mitch McConnell's pledge to allow amendments, in contrast to Harry Reid's kindergarten class. Democrats naturally want to join the debate, and some of them plan to offer measures that would harm U.S. production under the false flag of reducing oil exports. One liberal target is to prevent any easing in the 39-year-old ban on oil exports. The ban makes less sense each year as U.S. production increases, with the latest estimate at 9.3 million barrels per day in 2015, up from about nine million last year. But the ban makes for good populist politics, and New York Senator Chuck Schumer is promoting an amendment requiring that any oil that flows through the Keystone XL must stay in the U.S. This makes no economic sense, starting with the fact that the oil market is global. What matters for prices are global supply and demand. To the extent more U.S. crude makes it to the global market, prices will be lower, other things being equal. All the more so given that most U.S. oil is lighter crude that can't all be processed by U.S. refiners. American refineries on the Gulf Coast were built to process heavy imported crude from the likes of Venezuela. Light crude is valuable and should be fetching a premium. Instead, U.S. producers are at the mercy of U.S. refiners, since the export ban means they have nowhere else to sell. As U.S. supplies have swelled, those refineries have had more leverage to push down prices for U.S. shale oil. While the price of Brent crude, the world benchmark, is still about $50 a barrel, producers in the Bakken Shale in North Dakota this month are averaging about $34 a barrel for light crude. Exports would allow a more efficient oil market. Opponents of lifting the ban argue that keeping U.S. oil here will enhance U.S. energy security, as if it can be stockpiled for use in an emergency. The feds already have the Strategic Petroleum Reserve, which can provide some relief in a genuine crisis. But companies are only going to drill if they can sell oil at a profit. The best guarantee of energy security is robust American production capacity. Allowing exports will at the margin provide more incentive to drill. By the way, consumers don't purchase crude oil. They buy refined products, of which the U.S. is already a net exporter. The federal Government Accountability Office, Congressional Budget Office, the Brookings Institution, Aspen Institute and IHS consultants have published studies showing that more oil exports would benefit U.S. consumers. The studies estimate drivers would realize anywhere from a 1.5-cent to a 12-cent per-gallon reduction in gasoline prices, as well as lower costs for heating and diesel fuel. The studies also show that oil exports would result in big economic and job gains, as producers plow higher returns back into production. A recent study by consultants ICF International for the American Petroleum Institute found that allowing exports would increase U.S. oil production by as much as 500,000 barrels a day by 2020, creating as many as 300,000 more jobs and adding $38 billion to GDP. To the extent it increases supply, U.S. oil exports would also provide a strategic benefit. Lower world prices put pressure on rogue regimes that are big oil producers such as Russia, Iran and Venezuela. Most liberals know all this, which betrays that their real reason for supporting the oil export ban isn't energy security. It's climate-change politics. They know the shale boom has undermined their drive for renewable fuels by providing cheap oil and natural gas. They also know that exporting U.S. oil will increase the U.S. incentive to drill, and they'd rather all that oil and gas stay in the ground. There's an inside-the-Beltway debate about the best timing for a vote to lift the export ban, and we'll leave that to the pros. The point is that allowing oil exports ought to be as much a part of the GOP energy agenda as Keystone XL, liquid-gas exports or relief from the Environmental Protection Agency. It's the kind of pro-growth policy that voters elected a GOP Congress to support.
Subject: Petroleum refineries; Energy policy; Petroleum industry; Supply & demand
Location: United States--US
People: Schumer, Charles E McConnell, Mitch Reid, Harry
Company / organization: Name: Congress; NAICS: 921120; Name: Republican Party; NAICS: 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1645956658
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645956658?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ValueAct Reports Stake in Baker Hughes; Move Comes as Oil-Field-Services Provider Works to Complete Purchase by Halliburton
Author: Stahl, George; Pollock, Lauren
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Jan 2015: n/a.
Abstract:
The roughly $15 billion San Francisco hedge fund typically likes to work behind the scenes with management rather than fight publicly like many activists. that ValueAct planned to raise up to $1.5 billion in new funds, joining a group of activist investors who are gearing up to target a fresh crop of companies.
Full text: Activist investor ValueAct Capital Management LP reported Friday a 5.1% stake in Baker Hughes, a provider of oil-field services. The timing of the stake is interesting as Baker Hughes is in an agreement to be bought by rival Halliburton Co. The cash-and-stock deal was valued at nearly $35 billion when announced in November but has fallen in recent months as the sharp decline in oil prices has pressured the valuation of many energy-related companies. ValueAct didn't indicate its motives in the that revealed its stake. Representatives from the fund and Baker Hughes were unavailable for comment. ValueAct bought the Baker Hughes stake for $1.22 billion and started buying the week after the deal was announced. It averaged a price of about $55.68 a share. Baker Hughes closed Friday at $56.56, which is about 10% below where the Halliburton deal values the stock. In November, for $34.6 billion in stock and cash. The deal came after weeks of discussions that at one point turned hostile. The agreement also contains a $3.5 billion breakup fee should the deal collapse over antitrust issues. The two companies have many overlapping businesses, such as computer-controlled horizontal drilling and hydraulic fracturing of oil and gas wells. They also drill in many of the same regions, from U.S. shale fields in Texas and North Dakota to the deep waters off the coast of Brazil. ValueAct, founded by former Fidelity stock picker Jeffrey Ubben, garnered attention in 2013 when it secured a board seat at Microsoft Corp. despite holding less than 1% of the stock, marking the first time the software giant appointed an activist shareholder to its board. The roughly $15 billion San Francisco hedge fund typically likes to work behind the scenes with management rather than fight publicly like many activists. that ValueAct planned to raise up to $1.5 billion in new funds, joining a group of activist investors who are gearing up to target a fresh crop of companies. Activist investors, who buy stakes in companies and push them to make financial or strategic changes, solidified their position as a force in U.S. markets and boardrooms in 2014, forcing deals, unseating boards and pushing for other corporate changes. David Benoit contributed to this article. Write to George Stahl at and Lauren Pollock at Credit: By George Stahl And Lauren Pollock
Subject: Shareholder activism; Acquisitions & mergers; Oil service industry; Activists; Investments
Location: United States--US
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Languageof publication: English
Document type: News
ProQuest document ID: 1645956706
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1645956706?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ValueAct Reports Stake in Baker Hughes; Move Comes as Oil-Field-Services Provider Works to Complete Purchase by Halliburton
Author: Stahl, George; Pollock, Lauren
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Jan 2015: n/a.
Abstract:
The roughly $15 billion San Francisco hedge fund typically likes to work behind the scenes with management rather than fight publicly like many activists. that ValueAct planned to raise up to $1.5 billion in new funds, joining a group of activist investors who are gearing up to target a fresh crop of companies.
Full text: Activist investor ValueAct Capital Management LP reported Friday a 5.1% stake in Baker Hughes, a provider of oil-field services. The timing of the stake is interesting as Baker Hughes is in an agreement to be bought by rival Halliburton Co. The cash-and-stock deal was valued at nearly $35 billion when announced in November but has fallen in recent months as the sharp decline in oil prices has pressured the valuation of many energy-related companies. Investors are required to disclose their stakes when they hit the 5% threshold. ValueAct didn't indicate its motives in the that revealed its stake. In an email, ValueAct's founder and chief executive, Jeffrey Ubben, wrote, "We love the combination." Representatives from Baker Hughes were unavailable for comment. ValueAct bought the Baker Hughes stake for $1.22 billion and started buying the week after the deal was announced. It averaged a price of about $55.68 a share. Baker Hughes closed Friday at $56.56, which is about 10% below where the Halliburton deal values the stock. In November, for $34.6 billion in stock and cash. The deal came after weeks of discussions that at one point turned hostile. The agreement also contains a $3.5 billion breakup fee should the deal collapse over antitrust issues. The two companies have many overlapping businesses, such as computer-controlled horizontal drilling and hydraulic fracturing of oil and gas wells. They also drill in many of the same regions, from U.S. shale fields in Texas and North Dakota to the deep waters off the coast of Brazil. ValueAct garnered attention in 2013 when it secured a board seat at Microsoft Corp. despite holding less than 1% of the stock, marking the first time the software giant appointed an activist shareholder to its board. The roughly $15 billion San Francisco hedge fund typically likes to work behind the scenes with management rather than fight publicly like many activists. that ValueAct planned to raise up to $1.5 billion in new funds, joining a group of activist investors who are gearing up to target a fresh crop of companies. Activist investors, who buy stakes in companies and push them to make financial or strategic changes, solidified their position as a force in U.S. markets and boardrooms in 2014, forcing deals, unseating boards and pushing for other corporate changes. David Benoit contributed to this article. Write to George Stahl at and Lauren Pollock at Credit: By George Stahl And Lauren Pollock
Subject: Shareholder activism; Acquisitions & mergers; Oil service industry; Activists; Investments
Location: United States--US
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Languageof publication: English
Document type: News
ProQuest document ID: 1646038687
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646038687?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Boss Says More Job Cuts Ahead; Industry Still Reacting to Crude Prices That Are Half of 2014's Peak
Author: Cook, Lynn; Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Jan 2015: n/a.
Abstract: None available.
Full text: Energy companies aren't finished shedding jobs due to crude oil prices that are half what they were about six months ago, the world's biggest oil-field-services provider warned soon after disclosing 9,000 job cuts. Paal Kibsgaard, chief executive of Schlumberger Ltd., said on Friday U.S. oil producers that focus on shale fields are worse off than rivals elsewhere because of their higher costs. "The new oil prices are clearly going to test the resilience of several North American land producers going forward," he said, citing "their ability to get financing, their ability to continue to drive efficiencies and reduce costs and their ability to maintain production at current levels." Some of the largest U.S. oil-and-gas producers have cut 2015 capital spending budgets by 20% or more. Investment bank Cowen and Co. said international firms would cut spending by 20% this year and by another 10% in 2016. Schlumberger, Halliburton Co. and Baker Hughes Inc. will need to shrink further as clients demand price cuts and dial back spending on wells, Mr. Kibsgaard said while discussing quarterly earnings for his firm that fell 82% on more than $1 billion in charges including those related to downsizing. The three companies help energy producers drill and frack their wells. Oil prices rallied Friday after the International Energy Agency said low prices were starting to prompt some producers to stop drilling. The Brent international crude benchmark rose $1.90 a barrel to $50.17, but was still down for a eighth straight week. The U.S. benchmark gained $2.44 a barrel to $48.69 on Friday, snapping a seven-week losing streak. The IEA also revised its forecast for oil-supply growth this year, slashing it by 350,000 barrels a day. The agency now expects an extra 950,000 barrels a day to be pumped around the world in 2015, compared with 1.9 million barrels a day of new oil supply in 2014. Much of that oil is coming from U.S. shale fields. "A price recovery--barring any major disruption--may not be imminent, but signs are mounting that the tide will turn," the IEA said Friday in its monthly report. The IEA's new outlook for the year indicates that the Organization of the Petroleum Exporting Countries may be succeeding in defending its market-share by not cutting oil production. U.S. oil supply will grow by 80,000 barrels less than the agency previously had forecast, and production by Canada and Colombia also will grow more slowly, the IEA said. The effect will be a 300,000 barrel a day increase in demand for OPEC crude, to 29.2 million barrels, the agency said. The oil cartel, led by Saudi Arabia, decided in November to abandon its traditional role of stabilizing the market and to maintain its output in the face of falling prices. Since then layoffs have taken hold from fields in Mexico to the U.K.'s North Sea. Thousands of energy workers already have lost their jobs. Big oil companies including BP PLC and Royal Dutch Shell PLC have just started to pare payrolls. In Canada's oil sands region, Suncor Energy Inc. axed 1,000 workers last week and U.S.-based producer Apache Corp. has said it would reduce staff by 5%. Petróleos Mexicanos, the national oil company of Mexico, hopes to save as much as $3 billion this year by cutting administrative costs, including nonunion workers, a company official said. So far Pemex, as it is widely known, has shed 1,500 contract workers, and more layoffs are expected. "Visibility into the length and degree of the downturn remains weak," said Stewart Glickman, an equity analyst at data provider S&P Capital IQ. Halliburton, the second largest oil-field-services company and a bellwether for the industry, last month said it laid off 1,000 workers outside the U.S. This past week the Houston-based company said it would downsize closer to home. Halliburton declined to quantify how many U.S. employees are being given pink slips, but analysts and investors expect details to emerge on Tuesday when the company reports financial results and gives its outlook for the year. Sarah Kent, Christian Berthelsen and Laurence Iliff contributed to this article. Credit: By Lynn Cook and Dan Molinski
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646038690
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646038690?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News -- Boon in Northeast: Cheap Heating Oil
Author: Kamp, Jon
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Jan 2015: A.2.
Abstract:
While federal data show natural gas remains a cheaper fuel nationwide, in pipeline-constrained Maine, gas on average is actually more expensive now for residential customers, once oil prices are converted into a comparable unit of measurement, according to Republican Gov. Paul LePage's energy office.
Full text: On top of the broad savings Americans are reaping from cheaper gasoline, plummeting oil prices stand to bring residents in the Northeast billions more dollars in savings this winter when they fill up their home-heating-oil tanks. An estimated 6.2 million U.S. homes rely on heating oil for seasonal warmth, the vast majority in the Northeast. The region -- stretching from Maryland to Maine -- accounts for about 87% of the heating fuel's use, according to federal data. The fuel is delivered by truck and pumped into storage tanks, which are often in the basement. Heating a house with oil has been much pricier than using natural gas for several years, imposing a burden on homeowners who can easily burn through 1,000 gallons of oil every winter. But as the price of crude falls world-wide, the current average price for heating oil in the U.S. has dropped $1.10 from a year ago to just under $3 a gallon for the first time in more than four years, the U.S. Energy Information Administration said. Based on average wintertime consumption, a dollar per gallon in savings over the whole heating season could mean roughly $3 billion in savings for Northeast residents, said Chris Lafakis, a senior economist at Moody's Analytics. This translates into hundreds of dollars in savings with each heating-oil fill-up, providing some relief for people who struggle to pay energy bills. Dorothy Perkins, a 65-year-old retiree in coastal Lamoine, Maine, estimates she and husband Gary, a part-time Wal-Mart worker, had to pay more than $4,000 to keep their furnace humming last winter. This was despite closing off some rooms and huddling under blankets as their thermostat was set at just 60 degrees. Her sister, overwhelmed by high energy costs, had to come by temporarily with her two cats. "It was a struggle," Mrs. Perkins said. "I don't know many people that have that much money." The situation in Maine is particularly acute as no state relies more on heating oil. The state, which has limited pipeline access to natural gas, has nearly two-thirds of its homes using oil and other "combustible liquids" for warmth, according to federal census data. The steep decrease in prices is also largely good news for regional oil dealers, which are often small, family-owned businesses that have lost business to an expanding web of natural-gas mains for decades. Lower prices mean paying less to fill trucks and better odds that customers can pay bills on time, said Michael Ferrante, president of the Massachusetts Energy Marketers Association, which represents heating-oil firms in the state. While federal data show natural gas remains a cheaper fuel nationwide, in pipeline-constrained Maine, gas on average is actually more expensive now for residential customers, once oil prices are converted into a comparable unit of measurement, according to Republican Gov. Paul LePage's energy office. The most recent Maine numbers show average heating-oil prices of $2.63 a gallon, down $1.18 from a year ago. Oil users will enjoy the ride while it lasts. "It's fantastic knowing that the price has gone down," said Mrs. Perkins, the Maine resident, who topped off with 129 gallons on Monday to take advantage of low prices. "But it's not going to stay." Credit: By Jon Kamp
Subject: Natural gas; Energy policy; Petroleum industry; Heating; Winter; Fuel oil prices
Location: United States--US Maine Maryland Northeastern states
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450
Classification: 3400: Investment analysis & personal finance; 8340: Electric, water & gas utilities; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Jan 17, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646105547
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646105547?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Inflation Slows Amid Plunge in Oil
Author: Leubsdorf, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Jan 2015: A.2.
Abstract:
[...]food prices rose 3.4% in 2014, up from the prior year's 1.1% increase.\n
Full text: U.S. consumer prices rose at the slowest annual pace in more than five years in December and are poised to slow further in coming months amid the global plunge in oil prices. The consumer-price index, a broad gauge of inflation that measures what Americans pay for everything from coffee to gasoline and airline tickets, rose just 0.8% in December from a year earlier, the Labor Department said Friday. That was sharply slower than the 1.3% annual growth pace seen in November, and the lowest annual reading since October 2009. The continued decline in gas prices will "almost certainly" push inflation into negative territory in coming months, Capital Economics senior U.S. economist Paul Dales said. The national average price for a gallon of regular gas was $2.08 on Friday, down $1.22 from a year earlier, according to auto club AAA. But unlike the eurozone, where potential deflation reflects a weak economy plagued by high unemployment and weak demand, "the U.S. experience is definitely going to be fleeting and temporary and overall positive for the economy," Mr. Dales said. Excluding the volatile categories of food and energy, so-called core prices rose 1.6% on the year, slowing from a 1.7% annual gain in November and 1.8% annual growth in October. Investors and economists will be watching the core for clues as to the Federal Reserve's potential timing of interest-rate increases. The Fed, whose mandate includes price stability, monitors core inflation closely for signs of whether temporary ups and downs in food and energy costs are affecting consumer price gains more broadly. The Fed is on track to raise interest rates, which have been near zero for six years, sometime this year. While inflation has undershot the Fed's 2% target for more than 2 1/2 years, Chairwoman Janet Yellen has indicated the central bank will look past the "transitory" effects of cheaper oil, which she said should help boost consumer spending and the broader economy. But a sharp drop in core inflation, or deterioration in expectations for future inflation, could prompt officials to delay rate increases. If wage growth and inflation are already low, and a decline in oil prices "gets embedded in people's expectations, then it is going to be harder to hit our 2% inflation target than we may have thought," Federal Reserve Bank of Boston President Eric Rosengren told The Wall Street Journal in an interview on Wednesday. History shows consumers tend to separate short-run inflation pressures from longer-run price factors. In the mid-1980s, the late 1990s and the early 2000s, when oil prices dropped sharply, consumers lowered their expectations for how inflation would perform in the next 12 months, according to the University of Michigan's monthly survey of consumer sentiment. But their outlook for inflation in the next five years remained quite stable, usually hovering around 3%. In the early January sentiment report released Friday, the one-year inflation expectations dropped to 2.4% -- the lowest level in more than five years -- from 2.8% in December. The five-year expectations held at 2.8%, roughly the same rate seen over the past year. Past periods of declining oil prices also haven't dragged core prices down in a significant way. In 1986 and 1987, falling energy prices sent headline inflation lower but core prices remained on a steadier path, a pattern repeated in the late 1990s and again in the early 2000s. Today, sluggish inflation in Europe is widely seen as a signal of underlying weakness in the economy. Consumer prices in the eurozone fell in December from a year earlier for the first time since 2009, raising expectations that the European Central Bank will soon announce new stimulus measures. The U.S. economy, on the other hand, is in far better shape. Unemployment fell to 5.6% in December, closing out the strongest year of hiring since 1999, according to the Labor Department. The third quarter saw gross domestic product grow at a 5% seasonally adjusted annual rate, its strongest pace in 11 years. Consumer spending generates more than two-thirds of U.S. economic output. While wage growth remains sluggish, even-lower inflation is boosting workers' spending power. Average hourly earnings fell 0.2% in December from the prior month, but rose 0.1% in inflation-adjusted terms, the Labor Department said. On a month-to-month basis, Friday's inflation report showed that falling energy prices helped drive prices down by a seasonally adjusted 0.4% in December, its largest one-month decline in six years. Core prices were unchanged last month from November. The sharp drops in the price of gas and fuel oil last month were partly balanced by a 0.3% increase in food prices from November. Prices climbed for bread, beef, dairy products and fresh vegetables, but declined for fresh fruit, butter and pork. On the whole, food prices rose 3.4% in 2014, up from the prior year's 1.1% increase. Last month also saw prices rise for medical services and shelter but decline for apparel and airline tickets. --- Kathleen Madigan contributed to this article. Credit: By Ben Leubsdorf
Subject: Central banks; Eurozone; Economic growth; Gross Domestic Product--GDP; Inflation; Consumer Price Index; Crude oil prices
Location: United States--US
Company / organization: Name: Department of Labor-US; NAICS: 926150
Classification: 1110: Economic conditions & forecasts; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Jan 17, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646105622
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646105622?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further r eproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Stocks Snap a Five-Session Losing Streak --- Energy Shares Lead Market Higher as Oil Rises at End of Volatile Week; 'It's Very Difficult to Trade in This Environment'
Author: Driebusch, Corrie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Jan 2015: B.5.
Abstract:
More broadly, the decline in energy prices has added a cautious note to a generally positive outlook for the U.S. economy, as the once-booming energy sector has begun laying off workers.
Full text: U.S. stocks rose sharply, snapping a five-session losing streak and capping a week that had continued wide swings in share prices. With higher oil prices giving a boost to energy stocks, the S&P 500 added 26.75 points, or 1.3%, on Friday to 2019.42. It fell 1.2% for the week. The Dow Jones Industrial Average rose 190.86 points, or 1.1%, to 17511.57. For the week, it was down 1.3%. The Nasdaq Composite Index gained 63.56 points, or 1.4%, to 4634.38 Friday. Much of Friday's focus was on corporate-earnings reports and oil prices. Crude-oil futures gained 5.3% to $48.69 a barrel. Shares of energy companies in the S&P 500 rose 3.2%, leading the index higher. Oil prices have fallen by more than half since June on fears of oversupply. The sharp declines have weighed most heavily on the energy sector, with shares of energy companies in the S&P 500 off roughly 24% in the past six months. More broadly, the decline in energy prices has added a cautious note to a generally positive outlook for the U.S. economy, as the once-booming energy sector has begun laying off workers. "Investors have been waiting for a bounce in energy shares, and we're finally seeing it," says Jonathan Corpina, senior managing partner at brokerage firm Meridian Equity Partners. "Whether that bounce is sustainable we don't know, but I think it's making investors feel a little better about this market." U.S. stocks have been under pressure in recent sessions amid heightened price swings. For much of 2014, stock prices ground higher and volatility was low. But recent weeks have seen more frequent large moves, both higher and lower. On Tuesday, the Dow industrials swung 424 points during the session before ending slightly lower. Stocks extended their declines on Wednesday and Thursday, dragged down by worries about global economic growth and disappointing corporate earnings. "It has been quite a confusing week as volatility picked up meaningfully," said Anastasia Amoroso, global market strategist for J.P. Morgan Asset Management, which oversees about $1.7 trillion. "The biggest source of confusion is coming from whether falling oil prices is a good thing or bad thing for a global economy and for global stocks." So far this year, the Dow has fallen 1.7% and the S&P 500 has declined 1.9%. From their late-December record, the Dow is off 3% and the S&P 500 is off 3.4%. The CBOE Volatility Index, which measures expectations for swings in the S&P 500, fell 6.4% to 20.95 Friday. Still, that left the VIX above its 10-year average of around 20 and well above the index's 2014 average of 14.2. Some traders expressed frustration with the sharp swings in recent stock-trading sessions. "It's a very scary environment where stocks can move multiple percentage points on a speculative headline," said R.J. Grant, associate director of equity trading at KBW Inc. "It's very difficult to trade in this environment." The broader gains come at a time when traders described investors as more hesitant to participate in the stock market. "There's lackluster demand to buy stocks right now," said Brett Mock, managing director at brokerage JonesTrading Institutional Services LLC. He partially blames investors' concerns about global economies. European markets continued to be rattled by the Thursday decision of Switzerland's central bank to end its policy of capping the Swiss franc at 1.20 to the euro. Switzerland's blue-chip SMI benchmark fell 6% Friday. Thursday, the index slid 8.7%. Money managers said even though they were shocked by Switzerland's move, investors mainly shrugged it off. "For U.S. investors, things are looking pretty healthy from a consumer standpoint, and the Swiss National Bank news seems pretty esoteric," said Erik Davidson, chief investment officer for Wells Fargo Private Bank, which manages $190 billion. Investors are now looking ahead to Thursday's meeting by the European Central Bank. Many expect the ECB to unveil new efforts to ease monetary policy through purchases of bonds in an attempt to goose economic growth and lift inflation expectations. The Stoxx Europe 600 advanced 1.1% Friday. In commodity markets, gold futures added 1% to $1,276.90 an ounce. The yield on the 10-year Treasury note climbed to 1.815%, from 1.777% on Thursday. Yields fall as prices rise. In corporate news, Goldman Sachs Group said fourth-quarter net income fell 7.1%, as its revenue from trading and investment banking slid. Shares declined $1.26, or 0.7%, to $177.23. Shares of Precision Castparts fell 20.09, or 9.1%, to 199.63, after the maker of metal components and products said results for the December quarter were hurt by lower demand from oil-and-gas distribution customers. Credit: By Corrie Driebusch
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 3400: Investment analysis & personal finance; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 17, 2015
column: Friday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Busi ness And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646105624
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646105624?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Boss: More Job Cuts Lie Ahead
Author: Cook, Lynn; Molinski, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Jan 2015: B.1.
Abstract:
Energy companies aren't finished shedding jobs due to crude oil prices that are half what they were about six months ago, the world's biggest oil-field-services provider warned soon after disclosing 9,000 job cuts.
Full text: Energy companies aren't finished shedding jobs due to crude oil prices that are half what they were about six months ago, the world's biggest oil-field-services provider warned soon after disclosing 9,000 job cuts. Paal Kibsgaard, chief executive of Schlumberger Ltd., said on Friday U.S. oil producers that focus on shale fields are worse off than rivals elsewhere because of their higher costs. "The new oil prices are clearly going to test the resilience of several North American land producers going forward," he said, citing "their ability to get financing, their ability to continue to drive efficiencies and reduce costs and their ability to maintain production at current levels." Some of the largest U.S. oil-and-gas producers have cut 2015 capital spending budgets by 20% or more. Investment bank Cowen and Co. said international firms would cut spending by 20% this year and by another 10% in 2016. Schlumberger, Halliburton Co. and Baker Hughes Inc. will need to shrink further as clients demand price cuts and dial back spending on wells, Mr. Kibsgaard said while discussing quarterly earnings for his firm that fell 82% on more than $1 billion in charges including those related to downsizing. The three companies help energy producers drill and frack their wells. Oil prices rallied Friday after the International Energy Agency said low prices were starting to prompt some producers to stop drilling. The Brent international crude benchmark rose $1.90 a barrel to $50.17, but was still down for a eighth straight week. The U.S. benchmark gained $2.44 a barrel to $48.69 on Friday, snapping a seven-week losing streak. The IEA also revised its forecast for oil-supply growth this year, slashing it by 350,000 barrels a day. The agency now expects an extra 950,000 barrels a day to be pumped around the world in 2015, compared with 1.9 million barrels a day of new oil supply in 2014. Much of that oil is coming from U.S. shale fields. "A price recovery -- barring any major disruption -- may not be imminent, but signs are mounting that the tide will turn," the IEA said Friday in its monthly report. The IEA's new outlook for the year indicates that the Organization of the Petroleum Exporting Countries may be succeeding in defending its market-share by not cutting oil production. U.S. oil supply will grow by 80,000 barrels less than the agency previously had forecast, and production by Canada and Colombia also will grow more slowly, the IEA said. The effect will be a 300,000 barrel a day increase in demand for OPEC crude, to 29.2 million barrels, the Paris-based agency said. The oil cartel, led by Saudi Arabia, decided in November to abandon its traditional role of stabilizing the market and to maintain its output in the face of falling prices. Since then layoffs have taken hold from fields in Mexico to the U.K.'s North Sea. Thousands of energy workers already have lost their jobs. Big oil companies including BP PLC and Royal Dutch Shell PLC have just started to pare payrolls. In Canada's oil sands region, Suncor Energy Inc. axed 1,000 workers last week and U.S.-based producer Apache Corp. has said it would reduce staff by 5%. Petroleos Mexicanos, the national oil company of Mexico, hopes to save as much as $3 billion this year by cutting administrative costs, including nonunion workers, a company official said. So far Pemex, as it is widely known, has shed 1,500 contract workers, and more layoffs are expected. "Visibility into the length and degree of the downturn remains weak," said Stewart Glickman, an equity analyst at data provider S&P Capital IQ. Halliburton, the second largest oil-field-services company and a bellwether for the industry, last month said it laid off 1,000 workers outside the U.S. This past week the Houston-based company said it would downsize closer to home. Halliburton declined to quantify how many U.S. employees are being given pink slips, but analysts and investors expect details to emerge on Tuesday when the company reports financial results and gives its outlook for the year. --- Sarah Kent, Christian Berthelsen and Laurence Iliff contributed to this article. Credit: By Lynn Cook and Dan Molinski
Subject: Supply & demand; Capital expenditures; Petroleum production; Price cuts; Industrywide conditions; Oil shale; Petroleum industry; Crude oil prices; Layoffs
Location: United States--US
People: Kibsgaard, Paal
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Petroleos Mexicanos; NAICS: 211111; Name: International Energy Agency; NAICS: 928120; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Classification: 6100: Human resource planning; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 17, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646105632
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646105632?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi Arabia's Sabic Reports Fall in Net, Hurt by Lower Oil Prices
Author: Ahmed Al Omran
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Jan 2015: n/a.
Abstract:
RIYADH--Saudi Basic Industries Corp., or Sabic, on Sunday said its fourth-quarter net profit slumped 29%, missing analyst expectations, due to lower sale prices for its petrochemical products.
Full text: RIYADH--Saudi Basic Industries Corp., or Sabic, on Sunday said its fourth-quarter net profit slumped 29%, missing analyst expectations, due to lower sale prices for its petrochemical products. It said the outlook for 2015 is contingent on oil prices that can't be predicted, posing a significant challenge for the petrochemical giant. The Middle East's largest listed firm reported a decline in fourth-quarter net income to 4.36 billion Saudi riyals ($1.16 billion) from 6.16 billion riyals a year earlier, according to a statement to the Saudi stock exchange. Revenue fell 10% to 43.4 billion riyals. Analysts at Riyadh-based NCB Capital expected Sabic to post a net profit of 6.01 billion riyals, while analysts at Cairo-based EFG-Hermes had expected a profit of 5.55 billion riyals. Chief Executive Mohammed Al Mady said the fall in net income wasn't a surprise as the company had foreseen the effect of lower oil prices on its business and called the results positive considering the current circumstances. Sabic, which is 70% owned by the government, will continue to look for investments in places where it has access to raw materials, including North America, Saudi Arabia and China, which remains a major market for the company, Mr. Al Mady said. "We are working very hard in the U.S. but it's taking time," he said. "This is very important. We don't want to do anything unless we are sure 100%." The company attributed the fall in profit to lower prices for the products it sold. The company said that decline was partly offset by lower feedstock prices. Mr. Al Mady said it would be "very difficult to judge 2015 just by looking at the crude oil situation today," but added that the company can cope and is looking at ways to protect itself from market volatility. Write to Ahmed Al Omran at ahmed.alomran@wsj.com Credit: By Ahmed Al Omran
Subject: Financial performance; Chemical industry; Corporate profits
Location: Middle East
Company / organization: Name: Saudi Basic Industries Corp; NAICS: 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646276738
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646276738?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Anadarko to Fight Oil-Spill Fine; Investor in Ill-Fated Deepwater Horizon Rig Unable to Avoid Liability
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Jan 2015: n/a.
Abstract:
When a federal judge ruled last fall on who was to blame for the 2010 Deepwater Horizon disaster, he didn't point a finger at Anadarko Petroleum Corp. But the energy company is facing a pollution penalty of as much as $3.5 billion because it owned 25% of the oil well drilled by the ill-fated rig, and would have gained a quarter of the crude it pumped if the well hadn't exploded.
Full text: When a federal judge ruled last fall on who was to blame for the 2010 Deepwater Horizon disaster, he didn't point a finger at Anadarko Petroleum Corp. But the energy company is facing a pollution penalty of as much as $3.5 billion because it owned 25% of the oil well drilled by the ill-fated rig, and would have gained a quarter of the crude it pumped if the well hadn't exploded. Now Anadarko, one of the largest U.S. energy producers, is set to battle federal prosecutors in a trial beginning Jan. 20. It will argue alongside BP PLC, which operated the well known as Macondo. A judge will determine how much each company should pay per barrel spilled. Anadarko paid BP $4 billion in 2011 to release it of any liability from third-party claims and certain environmental fines. But federal and appellate judges have held that Anadarko is still liable under the Clean Water Act. "Any penalty that is not measured in billions of dollars would go largely unnoticed at a company the size of" Anadarko, Justice Department lawyers wrote in December. Citing Anadarko's limited role as an investor in the well, the government concludes the firm should pay more than $1 billion but "well below" the maximum. A spokesman for Anadarko declined to comment and pointed to its regulatory and court filings. In those documents, the company, which has a stock-market value of about $39.73 billion, says it should pay no penalty. "Anadarko was a faultless, non-operating investor" in the Deepwater Horizon venture, its lawyers contend, and penalizing it "could be counterproductive to offshore safety." At trial, at least one Anadarko witness is expected to testify that fining the company would create an incentive for investors in a well to take a more active role. The company says that this could "confuse lines of authority, delay critical decisions and be counterproductive to safety," according to court pleadings. Anadarko has set aside $90 million to pay for any penalty. It tried to settle the case for that amount last July, but was rebuffed by the U.S. government. Mitsui & Co.'s MOEX Offshore, another Deepwater Horizon investor, with the Justice Department in 2012, including $70 million to resolve violations under the Clean Water Act. Corrections & Amplifications Anadarko faces up to $3.5 billion in potential Clean Water Act fines. An earlier version of this article incorrectly said the company faced potential fines up to $4.6 billion, but that amount was lowered last week with a court ruling. Write to Daniel Gilbert at Credit: By Daniel Gilbert
Subject: Clean Water Act-US; Trials; Energy economics; Investments; Fines & penalties
Location: United States--US
People: Gilbert, Daniel
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Languageof publication: English
Document type: News
ProQuest document ID: 1646324255
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646324255?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices to Play Into BP Fine; Drop in Crude Prices Strains Company--Which Lawyers Will Note in Court
Author: Gilbert, Daniel; Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Jan 2015: n/a.
Abstract:
[...]they plan to present evidence that BP's subsidiary is controlled by the parent and can weather the impact of a fine. Because the subsidiary "can readily access equity, capital, or borrowing from BP, it can pay the maximum penalty," lawyers for the U.S. Justice Department wrote on Dec. 19, 2014.
Full text: After its oil-well explosion in the Gulf of Mexico in 2010, BP PLC caught one lucky break: Oil prices surged and boosted its cash flow, helping it to cover billions of dollars in legal and oil-spill cleanup costs. Now BP is facing up to $13.7 billion in federal fines--about $10 billion more than it has set aside--in much less comfortable economic circumstances now that oil prices have plunged. The company is set to go to trial Jan. 20 in federal court in New Orleans over how much it must pay the U.S. government for each barrel of crude that spilled into the Gulf, in the final phase of litigation stemming from violations of the Clean Water Act. has sent prices tumbling since the summer. Crude now sells for about 40% less than it did in April 2010, when the explosion of the Deepwater Horizon rig killed 11 people and touched off the in U.S. history. The court's decision on the fines comes at a vulnerable moment for BP. Once the pride of England--BP stands for British Petroleum--the company already has had to to cover spill costs. One of its biggest bets is in suddenly hostile territory: Russia. The company is carrying $53.6 billion in debt, $21 billion more than at the time of the spill. Some analysts have been speculating that a slimmed-down BP could become a takeover target once the Deepwater Horizon litigation concludes. BP is already feeling the effects of lower oil prices. On Thursday it said it would lay off about 300 workers in Scotland, and analysts are lowering their forecasts for BP's 2014 earnings, which are slated to be released Feb. 3. The steep price decline "reduces BP's flexibility to cope with any further claims or shocks," analysts at Fitch Ratings wrote Friday. The drop "will severely dent earnings in 2015, and will likely stretch BP's credit profile beyond what is acceptable for an 'A' rating, in the short run at least." While the collapse in oil prices will crimp BP's cash flow, the company's lawyers aim to use it to their advantage. They plan to argue that the price drop has weakened BP Exploration & Production Inc., the subsidiary that is charged with the spill violations, and the court should weigh this in imposing a penalty. "We look forward to presenting our case at trial," said J. Andrew Langan, a lawyer representing BP's subsidiary. The company "should be subject to a Clean Water Act penalty at the lower end of the statutory range." BP had $30.7 billion in cash by the end of September. But the company argues that it has no obligation to lend money to its subsidiary and that the court should disregard the broader BP group's financial resources in imposing a fine. BP also argues it should get credit for leading the "largest environmental response operation in the nation's history," according to court pleadings. The company has incurred $43 billion of spill-related costs, including criminal and civil settlements and $14 billion for the Gulf cleanup. Lawyers for the government acknowledge that BP spent money that it wasn't required to, citing $846.2 million that BP paid for research into the spill, tourism promotion, and seafood testing, among other expenses, that could be deducted from the penalty. But they plan to present evidence that BP's subsidiary is controlled by the parent and can weather the impact of a fine. Because the subsidiary "can readily access equity, capital, or borrowing from BP, it can pay the maximum penalty," lawyers for the U.S. Justice Department wrote on Dec. 19, 2014. High oil prices buoyed BP as it unloaded properties to pay for spill-related costs. The company has raised more than $40 billion from selling assets since 2010, including refineries in California and Texas, and fields in the Gulf, Alaska, Colombia and the North Sea. "BP sold a hell of a lot of assets when the price of oil was a hell of a lot higher than it is now," said Richard Champion, chief investment officer at Sanlam Private Investments, which held BP shares as of December. As a result, BP made more money from the sales than it could at current prices, he added. The Deepwater Horizon disaster spurred a tangle of litigation, including class-action lawsuits filed on behalf of people, businesses and governments that contend that they were hurt by the oil spill. But the case that could be the most costly is the battle with the U.S. government over violations of the Clean Water Act. Judge Carl Barbier, a federal-district court judge in New Orleans handling the case, divided it into three parts. In the first step, to determine liability, Judge Barbier ruled in September that in an effort to cuts costs, BP acted recklessly before the drilling rig exploded. On Thursday, on the second major phase of the litigation, finding that BP didn't act irresponsibly in the wake of the accident. Judge Barbier concluded that the well leaked 4 million barrels, less than prosecutors had claimed. After subtracting the oil that was captured without spilling into the Gulf, the judge determined BP is liable for a fine on 3.19 million barrels. Now the question is how much the company must pay in pollution penalties for each of those barrels. The government is seeking a $4,300 fine for each one; BP contends that fines should be capped at $3,000 per barrel. The penalty sought by the government would be the largest by far for violating the Clean Water Act; BP calls it "a gross outlier compared to penalties in any other case or settlement." The highest penalty imposed under the act to date is the $1 billion that Transocean Ltd. paid in a 2013 settlement over the same spill. Tom Claps, a legal analyst at Susquehanna Financial Group, estimates that BP's penalty will likely total about $6 billion to $7 billion. In addition to BP's steps to clean up the spill, he says, Judge Barbier found BP bears only two-thirds of the blame for the accident, with contractors Transocean and Halliburton Co. at fault for 30% and 3%, respectively. Write to Daniel Gilbert at and Justin Scheck at Credit: By Daniel Gilbert and Justin Scheck
Subject: Petroleum industry; Cash flow; Prices; Attorneys; Environmental cleanup
Location: United States--US California
Company / organization: Name: BP Exploration & Production Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646324273
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646324273?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Start Week Deep in Negative Territory; Analysts See Little Evidence That Recovery Is in Sight
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2015: n/a.
Abstract:
In a bid to protect its market share, the Organization of the Petroleum Exporting Countries has repeatedly declined to cut its own output, which has also added to the global oil glut.
Full text: Oil prices started the week deep in negative territory on expectations that a sustained recovery is still a long way off. U.S. crude snapped a seven-week losing streak last week after bullish comments by an international energy watchdog. But analysts said they see little evidence that the combination of oversupply and sluggish demand that has pummeled prices since last summer is abating. Brent crude for March delivery fell 2.2% to about $49 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $47.56 a barrel in recent trade, down 2.3% from Friday's settlement. Over the weekend, J.P. Morgan became the to slash its forecast for oil prices this year. The bank cut its average Brent crude price forecast for this year to $49 a barrel from $82, saying that oil prices could trough in March at an average of $38 a barrel. Oil markets rallied on Friday after the International Energy Agency . The agency also said "signs are mounting that the tide will turn" for oil prices in its closely watched monthly market report. Analysts, however, said the short-term outlook remains bearish. "Despite a nearly 60% fall in oil prices since mid-2014, oil market balances remain weak, with prospects of a recovery looking dim until the latter months of 2015," Barclays analysts said in a report. The significant oil surplus, which J.P. Morgan estimates to be 1.6 million barrels a day in the 93 million barrels a day global market, comes on the heels of a boom in U.S. shale oil production. In a bid to protect its market share, the Organization of the Petroleum Exporting Countries has repeatedly declined to cut its own output, which has also added to the global oil glut. "We see significant oil oversupply with risk that Brent falls below $40 a barrel in the near term should the oil market not be able to accommodate the surplus," J.P. Morgan said. Investors this week will look to Frankfurt, where the European Central Bank is expected to . Analysts expect a weaker euro to weigh on dollar-denominated commodities like oil. Despite the bearish signals, some see light at the end of the crude tunnel. United Arab Emirates' oil minister Suhail Mohamed Faraj al-Mazrouei said on Monday that low crude oil prices are unlikely to last in the long-term. "I doubt it is going to last for very long because I'm a believer in sustainable development in the oil sector and that sustainable development cannot be achieved at the current prices," he said. Nymex reformulated gasoline blendstock for February--the benchmark gasoline contract--fell 0.8% to $1.3479 a gallon, while ICE gas oil for February changed hands at $474 a metric ton, up $1.75 from Friday's settlement. Summer Said contributed to this article. Write to Georgi Kantchev at Credit: By Georgi Kantchev
Subject: Crude oil prices; Petroleum industry; Petroleum production
Location: United States--US
Company / organization: Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: European Central Bank; NAICS: 521110; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646348902
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646348902?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
EBRD Sees Broad Hit to Growth From Oil Price Falls; Bank Sees Growth Hit by Falling Oil Prices, Sanctions and Weakening Investor Confidence
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2015: n/a.
Abstract:
Since mid-2014, falling prices for oil and other commodities have added to their difficulties.
Full text: , sanctions and weakening investor confidence will lead to a sharp contraction in Russia's economy during 2015, retarding growth in other Eastern European and central Asian economies with which it has close ties, the European Bank for Reconstruction and Development said Monday. The EBRD also slashed its growth forecast for Ukraine, saying the nation's economy is in "a precarious state" as the death toll in the eastern part of the country rises despite a cease-fire agreed by the government and pro-Russian rebels. The EBRD was established in 1991 to help countries in Eastern Europe and the former Soviet Union make the transition from centrally planned to market economies after the fall of Communism. In recent years, the growth prospects in many countries in that region have been blighted by the , which has reduced demand for their exports. Those countries have faced fresh headwinds since early 2014, with Russia's annexation of Ukraine's Crimea peninsula, and the outbreak of fighting in eastern Ukraine. Since mid-2014, falling prices for oil and other commodities have added to their difficulties. "Commodity exporters are impacted negatively, particularly the largest country in the region, Russia, where the oil price collapse is compounding the impact of already poor investor confidence, long-run structural problems and increasingly biting economic sanctions," the EBRD said. "The ensuing negative spillovers will be significant in many economies in Eastern Europe, the Caucasus and Central Asia that have strong economic ties with Russia as well as other commodity exporters." The EBRD's economists now expect Russia's economy to contract by 4.8% in 2015, having forecast in September that it would shrink by just 0.2%. Its forecast is a little gloomier than the Russia government's own estimates, which foresees a contraction of 4%. For Ukraine, the EBRD sees a contraction of 5%, having in September estimated a decline in gross domestic product of 3%. "Ukraine enters 2015 with incomplete external and fiscal adjustment, very low level of foreign exchange reserves, material external liquidity needs, uncertainty about international financial assistance and ," the EBRD said. In recent years, the EBRD has begun to invest in four countries in the Middle East and north Africa, and more recently has begun operations in Cyprus. While it expects Russia and Ukraine will experience the worst of the economic slowdown, many other parts of its regions of operation will also suffer. The EBRD cut its growth forecasts for 19 other countries, from Poland to Turkmenistan, and from Latvia to Tunisia. Over the 35 countries in which it invests, the EBRD now expects economic output to contract by 0.3% in 2015, having previously forecast growth of 1.7%. That prospect will add to concerns about the outlook for the global economy. Earlier this month, the World bank cut its growth forecast for world output to 3% from 3.4%, saying a strengthening U.S. economy and plummeting oil prices won't be enough to offset deepening trouble in the eurozone and emerging markets. Write to Paul Hannon at Credit: By Paul Hannon
Subject: International finance; Truces & cease fires; Economic growth; Gross Domestic Product--GDP
Location: Russia Union of Soviet Socialist Republics--USSR Eastern Europe
People: Nagy, Piroska
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 19, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646366560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646366560?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World's Largest Traders Use Offshore Supertankers to Store Oil; Companies Are Buying Oil Now to Sell Later When Prices Rise
Author: Kent, Sarah; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2015: n/a.
Abstract:
The opportunity to stockpile oil in such large quantities has come from the dramatic shift in the market for the commodity in recent months. Since June, prices have collapsed, tumbling by more than 50% amid soaring production from the U.S. and unwavering output from the Organization of the Petroleum Exporting Countries, at a time when global economic growth--the main determinant of demand--is slowing. According to Citigroup Inc., China's coastline storage facilities ran out of space as the country filled up strategic oil reserves last year.
Full text: The supertanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off the coast of Singapore, storing millions of barrels of oil for Vitol SA, a giant trading house. According to shipbrokers and analysts, the 3-million-barrel megaship--one of the largest in the world--is just one example of efforts by traders to turn a profit in the slumping global oil market . The strategy is simple: buy and store oil at cheap prices now , selling futures contracts to lock in the higher oil prices expected later. "It is one of the easy ways to make money and that's one of the interesting things about it from a trading perspective: It's a counter cyclical source of profit for the Vitols and Glencores and Trafiguras," said Craig Pirrong, a finance professor at the University of Houston, referring to a handful of the biggest oil traders in the world. According to shipbrokers and analysts, major traders including Vitol SA, Gunvor SA, Trafigura Beheer BV and Koch Supply & Trading Co. Ltd have chartered supertankers capable of storing a combined total of more than 30 million barrels of oil--many of them in the past few weeks. Vitol, Gunvor and Trafigura declined to comment. Koch didn't respond to requests for comment. The opportunity to stockpile oil in such large quantities has come from the dramatic shift in the market for the commodity in recent months. Since June, prices have collapsed, tumbling by more than 50% amid soaring production from the U.S. and unwavering output from the Organization of the Petroleum Exporting Countries, at a time when global economic growth--the main determinant of demand--is slowing. The oversupply has given rise to a so-called contango in the market, when the current price of a commodity is lower than prices for delivery in the future. That makes it attractive for buyers to purchase oil now at the cheaper rates, store it and strike sales agreements at a higher price in the future, locking in profits. The price difference between the March and August contracts for Brent crude oil, the international benchmark grade, is currently $6 a barrel. That is the steepest premium since an oil-price slump in 2008 and 2009. For years, oil trading houses have contended with high prices and low volatility, which have squeezed margins. Firms have responded by investing in infrastructure like oil-storage tanks, terminals and refineries to gain flexibility in trading, as well as better information about what is happening in the market. Combined with the companies' access to the physical oil market, these investments have made the trading firms uniquely well-positioned to exploit the shift in the market and store oil for a profit. Glencore PLC, a Swiss commodity-trading giant, and Trafigura Beheer, one of the world's largest independent oil traders, have both already highlighted to investors that the market's dramatic change since June is expected to bolster their profits. Onshore storage tanks are filling up fast. According to Citigroup Inc., China's coastline storage facilities ran out of space as the country filled up strategic oil reserves last year. Stocks at the U.S. storage hub at Cushing, Okla., have risen more than 20% since December, according to Genscape Inc., a data provider based in Kentucky. That means more unusual storage options, such as the ships, are becoming increasingly popular. "Because so much oil doesn't have a home right now, there is a frenzy of traders and companies looking to hire supertankers," said Halvor Ellefsen, chief executive officer of Galbraiths, a London-based shipbroker. The last time there was a similar situation, in spring 2009, more than 70 million barrels of oil were stored in tankers, according to shipbrokers. The current tanker craze may not quite reach those levels, as the disparity between current and futures prices isn't as steep at the moment. Bank of America Merril Lynch predicts the volume of oil stored on tankers could rise to 55 million barrels by the end of the second quarter. However, the potentially lucrative storage trade isn't open to everyone, nor is it risk free. It requires detailed knowledge of the way oil is moved around the world that few outside a tightknit group of oil traders possess. Making a profit depends on numerous factors, including rates for freight and storage and, ultimately, finding a buyer for the crude. "If people think the contango is some kind of magical way to make money they are incorrect," said Benoit Lioud, senior research analyst at Mercuria Energy Group, a Swiss-based trading house. "Storing big quantities of crude oil is not an easy game. It's not a game at all." Costas Paris in London and Christian Berthelsen and Nicole Friedman in New York contributed to this story. Write to Sarah Kent at sarah.kent@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Sarah Kent And Georgi Kantchev
Subject: Profits; Oil reserves; Petroleum industry; Prices
Location: Singapore
Company / organization: Name: Trafigura Beheer BV; NAICS: 324110; Name: Vitol SA; NAICS: 424710, 424720, 486910; Name: University of Houston; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646462953
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646462953?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Delta Air Lines Gains Altitude; Collapsing Oil Prices Provide a Lift
Author: Jakab, Spencer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2015: n/a.
Abstract:
[...]the final few months of last year, when the price differential vanished, Delta captured some of the extra profit between depressed U.S. benchmark crude and jet fuel, which is priced off of international varieties.
Full text: Say "delta" on Wall Street and traders will assume you mean one of two things--the resurgent airline or the jargon for rate of change. Both Delta Air Lines Inc. and the delta of analysts' expectations have been something to behold in recent months. An already strong underlying business case was supercharged by collapsing oil prices. Delta's shares are up more than threefold since the start of 2013 and by 15% since crude prices peaked last June. But competitors' shares and earnings projections have rallied even more. That isn't because investors expect bad or even mixed news from Delta when fourth-quarter results are released Tuesday. A preview the company gave on Jan. 5 shows it exceeded guidance on many measures. Analysts expect adjusted earnings per share to rise to 77 cents from 65 cents a year earlier. But unlike a rising tide that lifts all boats, a sinking crude price doesn't benefit all airlines equally. On the one hand, Delta's practice of operating older, cheaper aircraft makes it less energy efficient than peers, and should translate into a bigger bonus from cheap jet fuel. That is outweighed, though, by its hedging strategy. That includes traditional derivatives that benefit when oil prices rise, and suffer when they fall. Competitor American Airlines Group Inc. is essentially unhedged, while others such as United Continental Holdings Co. are less hedged. Nonetheless, Delta expects a $1.7 billion earnings benefit from fuel alone in 2015 compared with last year. Delta's other hedge is unique in the airline industry: In 2012, it bought an oil refinery and converted much of its output to jet fuel. That much-criticized move turned out to be pretty savvy. Until the final few months of last year, when the price differential vanished, Delta captured some of the extra profit between depressed U.S. benchmark crude and jet fuel, which is priced off of international varieties. Delta trades at a nearly 20% discount to the average multiple of enterprise value to earnings before interest, taxes, depreciation and amortization of four U.S. peers. That is too steep, given that the extent to which Delta will benefit or suffer from oil-price swings beyond the next several months is unknown. Meanwhile, its operational and financial health have kept improving impressively. Delta has plenty of room before hitting its flight ceiling. Write to Spencer Jakab at Credit: By Spencer Jakab
Subject: Earnings per share; Airlines; Financial performance; Petroleum industry; Prices
Company / organization: Name: American Airlines Group Inc; NAICS: 551114; Name: Delta Air Lines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646476704
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646476704?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Spills into Yellowstone River After Pipeline Leak; Gov. Steve Bullock Declared State of Emergency In Two Counties Near River
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Jan 2015: n/a.
Abstract:
In 2011, Exxon Mobil Corp.'s Silvertip an estimated 1,500 barrels of oil into the Yellowstone River near Laurel, Mont., about 230 miles west of Glendive.
Full text: A pipeline company said more than 50 people were working to clean up the Yellowstone River in Montana Monday afternoon in the wake of an oil spill that dumped as much as 1,200 barrels of crude near the river Saturday morning. The release was from Bridger Pipeline LLC's 12-inch Poplar line, which can carry 42,000 barrels a day of crude from the Bakken formation and runs from Canada south to Baker, Montana. Bridger Pipeline is a subsidiary of True Cos., a privately held Wyoming-based company. The company said in a statement the leak began Saturday morning and the pipeline was shut in an hour later. The release occurred about 9 miles south of the city of Glendive, which is roughly 40 miles west of the North Dakota border. Some oil reached the river, which is partially frozen in places. The Montana Department of Environmental Quality said a flyover inspection by the company spotted sheens miles away from where the initial spill occurred, including at a drinking-water intake 25 miles north of Glendive. Montana Gov. Steve Bullock has declared a state of emergency in two counties along the river. Late last year, Bridger Pipeline received a warning letter from the U.S. Department of Transportation's Pipeline and Hazardous Materials Administration, alleging that the company didn't follow proper reporting procedures when it inspected the Poplar pipeline in 2012. The agency didn't impose a fine. The company hasn't filed a response with PHMSA and didn't immediately respond to questions about the warning. In 2011, Exxon Mobil Corp.'s Silvertip an estimated 1,500 barrels of oil into the Yellowstone River near Laurel, Mont., about 230 miles west of Glendive. Federal regulators levied a $1.7 million penalty against Exxon for the incident. Write to Alison Sider at Credit: By Alison Sider
Subject: Pipelines; Petroleum industry
Location: Canada Montana Yellowstone River North Dakota
Company / organization: Name: Department of Environmental Quality-Montana; NAICS: 924110; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Department of Transportation; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 19, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646480723
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646480723?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Investor Bind: How Low Can Oil Go? As Crude Slides, Even Those Who Bet on Lower Prices Get Nervous; 'Bloody Nuts'
Author: Friedman, Nicole; Copeland, Rob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
(Hedge funds that focus on commodity markets in general have lost nearly 10% over the past three years, according to trade publication Absolute Return.) But the oil market is increasingly volatile, with U.S. prices snapping a seven-week losing streak last week before falling again in electronic trading Monday. Lately, the market has become particularly focused on a survey of drilling rigs operating in the U.S. that is released each Friday by oil-field-services company Baker Hughes Inc., which can be an early indicator of how quickly production will grow in the future.
Full text: The collapse in the oil market has been very good for Anuraag Shah. His hedge fund, Tusker Capital LLC, last spring made a bet that oil prices would fall and has since reaped big profits from their nearly 60% decline. But last Tuesday, Mr. Shah decided he had seen enough. He cashed out all of Tusker's bets against oil, walking away for the moment from a market that has already fallen 8.6% this year. Tusker, which manages roughly $100 million from Manhattan Beach, Calif., saw returns of 17% in 2014 and 10% this month alone through the middle of last week. Oil prices have plunged from north of $100 a barrel in June to less than half that level now, the victim of a growing surplus brought on by booming U.S. production and weaker-than-expected demand. As prices have careened toward six-year lows, the market has become more volatile. That has given investors opportunities to score big profits by betting on further declines. But some traders say the market has fallen too far, too fast--creating the potential for an equally sharp rebound. "It's bloody nuts," said Mr. Shah, a veteran of trading giant Louis Dreyfus Commodities BV. He isn't putting a figure on it, but after oil's historic plunge, he doesn't see much further room for bearish bets to go. "I'm not saying this is the low, but we're not going to $20 or even $30 in the next month or two." Seven months into a swoon that few saw coming, investors such as Mr. Shah are reluctant to call a bottom for oil prices. Analysts who were slow to recognize the magnitude of the decline are now competing to put out the most bearish forecasts. J.P. Morgan Chase & Co. on Monday predicted U.S. oil prices would average $46 a barrel this year, while last week, Goldman Sachs Group Inc. called for an annual average of $47.15 a barrel. For investors, this presents a quandary: Falling oil prices recently have been one of the most consistently profitable bets in commodities. (Hedge funds that focus on commodity markets in general have lost nearly 10% over the past three years, according to trade publication Absolute Return.) But the oil market is increasingly volatile, with U.S. prices snapping a seven-week losing streak last week before falling again in electronic trading Monday. On Friday, U.S. oil prices rose 5.3% to $48.69 a barrel on the New York Mercantile Exchange. The Nymex market didn't settle Monday because of the U.S. holiday. Brent, the international benchmark, on Monday declined 2.7% to $48.84 a barrel. extended their declines. The sudden realization that the world has more oil than it needs sent analysts and traders scrambling to figure out how low prices need to go to rebalance the market. Analysts estimate the global market is oversupplied by anywhere between 1 million and 2.5 million barrels of oil a day. The Organization of the Petroleum Exporting Countries decided in November rather than cut them in a bid to support the market, causing prices to plummet. Total crude-oil and fuel last week and traders are booking tankers to store oil at sea until they can find a buyer. Some energy companies have cut spending and laid off workers, but it could take months or even years for production to fall enough to erase the glut. Many money managers are staying on the sidelines, searching for clues that could mark a turning point for the market. These can range from economic growth forecasts for major oil consumers such as China, to retail gasoline prices and auto sales in the U.S., which could drive future demand. Lately, the market has become particularly focused on a survey of drilling rigs operating in the U.S. that is released each Friday by oil-field-services company Baker Hughes Inc., which can be an early indicator of how quickly production will grow in the future. The number of oil rigs operating in the U.S. has fallen for six weeks in a row. Some of these markers point to an easing in the global supply glut that has driven prices lower. On Thursday, for 2015. U.S. fuel demand has risen as prices at the pump fall. That hasn't convinced many investors to wade back into the market. "The market is quite irrational" right now, said Alessandro Gelli, an analyst at Diapason Commodities Management SA in Lausanne, Switzerland, which manages $5 billion. "It's only moving with negative news--all the positive-news aspects have been completely forgotten." Diapason has taken positions in the gasoline market that benefit from growing crude supplies, Mr. Gelli said, but he thinks it is too soon to say whether oil prices have hit their bottom. He is looking for signs that more panicky investors are piling in to bet on lower prices and for solid evidence that the supply glut will shrink, such as U.S. oil producers filing for bankruptcy. One hedge-fund manager said last week he saw little chance for a quick recovery, even if there are cuts to production. If Saudi Arabia or another producer cuts output, it would be "an entirely self-sacrificing gesture," because others would use the higher prices as an opportunity to produce more, Michael Hintze, founder of $14 billion CQS LLP, wrote in a letter to investors viewed by The Wall Street Journal. "The 'new normal' in the price of oil is a structural shift that is unlikely to be reversed over the next decade," Mr. Hintze wrote. "I believe we will have to become accustomed to a lower oil price for longer than most might think." There are some investors who see the rout in oil prices as a good long-term opportunity. Many market watchers expect prices to rise somewhat by year-end, with further gains in 2016 or 2017, even if they aren't sure when or at what level the market will turn around. MV Financial Group Inc. is planning to add commodities investments to its wealth-management assets for the first time in five years, said Katrina Lamb, head of investment strategy and research. The fund, which oversees $500 million, plans to place as much as 5% of its wealth-management assets in commodity exchange-traded funds, mostly energy funds, in the first three months of the year. "We have a nice entry point, price-wise," said Ms. Lamb, who thinks prices are unlikely to go far below $40 a barrel. But finding ways to profit in today's market can be stressful. Tariq Zahir, who oversees about $3 million as managing member of Tyche Capital Advisors, said he routinely wakes up in the middle of the night to trade during European hours. Mr. Zahir has wagered that later-dated crude contracts will rise relative to near-term contracts. "I never get sleep anymore," he said. "Instead of doing a trade and holding onto it for four or five days, sometimes we're getting out during the same session." Michael Reeber of $230 million hedge-fund firm Andalusian Capital Partners LP, said his firm is buying shares in airlines, including American Airlines Group Inc. and Jetblue Airways Corp, which stand to benefit from lower jet-fuel prices. Shares in both companies are down this year. Predicting oil prices is "a mug's game," he said, adding he had "no idea" how low oil will go. Juliet Chung and Timothy Puko contributed to this article. Write to Nicole Friedman at and Rob Copeland at Credit: By Nicole Friedman And Rob Copeland
Subject: Petroleum industry; Profits; Statistical data
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646486423
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646486423?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Spill Contaminates Montana Town's Water Supply, EPA Says; Gov. Steve Bullock Declared State of Emergency In Two Counties Near River
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
Oil from a broken pipeline has seeped into the Yellowstone River and contaminated a Montana town's water supply, the U.S. Environmental Protection Agency said Monday evening.
Full text: Oil from a broken pipeline has seeped into the Yellowstone River and contaminated a Montana town's water supply, the U.S. Environmental Protection Agency said Monday evening. The agency described the crude spill of roughly 1,200 barrels as significant. It occurred Saturday morning less than 10 miles south of Glendive, a town of about 5,000 residents which is roughly 40 miles west of the North Dakota border. "The initial results of samples taken from the City of Glendive's drinking water system indicate the presence of hydrocarbons at elevated levels, and water intakes in the river have been closed," the EPA said in a statement. Federal and state and city governments are working to secure an alternative drinking water supply for residents and to develop a plan to flush the water system, the agency said. The release was from Bridger Pipeline LLC's 12-inch Poplar line, which can carry 42,000 barrels a day of crude from the Bakken formation and runs from Canada south to Baker, Montana. Bridger Pipeline is a subsidiary of True Cos., a privately held Wyoming-based company. The company said earlier Monday that more than 50 people were working to clean up the spill. The EPA said containment structures were being placed about 30 miles downstream from the spill site. The company said in a statement that the pipeline was shut down within an hour of the leak. The Montana Department of Environmental Quality said a flyover inspection by the company spotted sheens on the river miles away from where the initial spill occurred, including at a drinking-water intake 25 miles north of Glendive. Montana Gov. Steve Bullock declared a state of emergency in two counties along the river on Monday morning. Late last year, Bridger Pipeline received a warning letter from the U.S. Department of Transportation's Pipeline and Hazardous Materials Administration, alleging that the company didn't follow proper reporting procedures when it inspected the Poplar pipeline in 2012. The agency didn't impose a fine. The company hasn't filed a response with PHMSA and didn't immediately respond to questions about the warning. In 2011, Exxon Mobil Corp.'s Silvertip an estimated 1,500 barrels of oil into the Yellowstone River near Laurel, Mont., about 230 miles west of Glendive. Federal regulators levied a $1.7 million penalty against Exxon for the incident. Write to Alison Sider at Credit: By Alison Sider
Subject: Drinking water; Pipelines; Petroleum industry; Environmental management; Water shortages
Location: Montana Yellowstone River North Dakota
Company / organization: Name: Department of Environmental Quality-Montana; NAICS: 924110; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Department of Transportation; NAICS: 926120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646489731
Document URL: https://login.ezpr oxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646489731?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Getting Laid Off Was a Blessing for This Food Entrepreneur; Fustini's Oils & Vinegars Finds Right Mix for Success
Author: Essick, Kristi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
[...]Acts looks at the varied paths people are taking in their 50s and beyond.
Full text: After a 30-year career in sales and marketing at 3M Co., Jim Milligan was laid off at age 55. It was, he says today, the "best thing that could have happened." "Ten years into my career at 3M, I started making plans to open my own business so I could be my own boss, but it took me another 20 years to actually do it," says Mr. Milligan, who now owns a chain of gourmet olive-oil and vinegar shops called Fustini's Oils & Vinegars. Losing his job, he adds, was "scary at the time, but...it forced me to make a leap." Taste for Traverse City To start, he knew he wanted to work in Traverse City, Mich., a town where he and his family had vacationed for many years. He also thought back to trips to Europe, where he enjoyed visiting shops selling products like wine, mustard and olive oil. Relatively quickly, he settled on the idea of opening a "tasting room of some kind," Mr. Milligan recalls. In particular, olive oil seemed to fit the bill. "It was just such a fast-growing market in the U.S.," he says. In May 2008, just six months after his layoff, Mr. Milligan opened the doors of the first Fustini's in downtown Traverse City. The tiny shop, which Mr. Milligan funded with $50,000 of his retirement savings, sold cold-pressed olive oils from around the world, as well as aged balsamic vinegars. "Fustini" is the Italian word for the metal urns that hold the oil until it's bottled on the spot for customers. "I just wanted to open a nice, fun little business, but after only a few months, I realized this could be much bigger," Mr. Milligan says. The company now has five stores in Michigan, including a much-expanded flagship store in Traverse City, and one shop in Maui, Hawaii. Fustini's also offers in-store cooking classes and publishes cookbooks. Sales this year will total about $3.5 million. Right Decision "It was pretty stressful at times, but I'm glad I expanded," says Mr. Milligan, who co-founded the business with his wife. (The two have since divorced; he bought her portion of the company.) "Now lots more people get to try fresh olive oils and learn to cook more healthfully." After years of 70-hour weeks, Mr. Milligan hopes to dial back to a manageable 40 hours and has hired a general manager to ease that transition. He wants to travel, play golf, spend time with his two grown daughters and get involved in philanthropic projects. "I didn't expect to be working at full tilt in my 'retirement', but I found out something about myself, which is I love the 'chase' of business," says Mr. Milligan. "Though it's a lot more fun selling olive oil than computer storage tapes." Second Acts looks at the varied paths people are taking in their 50s and beyond. The profiles are by Kristi Essick, a writer in California. You can reach her, and let us know how you're starting over, at encore@wsj.com . Credit: By Kristi Essick
Subject: Olive oil
Location: Europe California
Company / organization: Name: 3M Co; NAICS: 334417, 325412, 322230, 332216
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646518212
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646518212?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Malaysia Takes Ax to Budget Amid Oil-Price Jolt; Asia's Biggest Oil Exporter Slashes 2015 Spending Amid Sharply Lower Crude Prices
Author: Ng, Jason; Wright, Tom
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
[...]the measures announced Tuesday by Prime Minister Najib Razak amount to a significant belt tightening for Malaysia, Asia's biggest oil exporter and the world's second-largest natural gas exporter after Qatar.
Full text: KUALA LUMPUR, Malaysia--Malaysia's government said it would slash spending in 2015 by some $1.5 billion, or about 2% of its proposed outlays, the latest global oil exporter to take drastic measures in the face of sharply lower crude-oil prices. Some producers with huge foreign reserves like , even as they weather a decline in . Governments with less firepower like Russia, Venezuela and Nigeria have been forced to reduce budgets and take other measures. across most sectors of its budget. Nigeria late last year restricted foreign-currency trading to stem capital outflows. "Malaysia would be somewhere in the middle," said Rahul Bajoria, a Singapore-based economist at Barclays. While the country relies on oil and gas for about a third of its total budget revenues, the country has been able to manage its revenues and expenses without a budget blowout, he said. Still, the measures announced Tuesday by Prime Minister Najib Razak amount to a significant belt tightening for Malaysia, Asia's biggest oil exporter and the world's second-largest natural gas exporter after Qatar. The government will cut a net 5.5 billion ringgit, or $1.5 billion, from expenditures, largely by slashing grants to state-linked companies and overseas travel by government officials, as well as suspending mandatory military service program for a year. Costs for subsidizing fuel also fell sharply. The budget signals that Malaysian authorities are prioritizing stability in government finances over growth. Mr. Najib said the economy will likely expand by 4.5% to 5.5% this year, down from an earlier projection of up to 6%. The government raised its fiscal deficit target to 3.2% of gross domestic product from 3%. "We are neither in a recession nor crisis as experienced in 1997 and 2009, which warranted stimulus packages," Mr. Najib said in an address broadcast live on television. The revision assumes an average oil price of $55 a barrel for 2015 compared with $100 a barrel when Mr. Najib presented the , an estimate that could leave the government room to increase spending on infrastructure if oil recovers. The U.S. dollar has risen about 12% against the ringgit in the past six months, making the Malaysian currency one of the worst performers in Asia. Many other countries in the region, including China and Japan, are oil importers that benefit from a fall in the cost of crude. The ringgit slipped about 0.8% on Tuesday after Mr. Najib's announcement, hitting a six-year low. The decline has sparked talk in the market that Malaysia may be pondering capital controls, a replay of action it took during the 1997-98 Asian financial crisis. But Malaysian authorities have been quick to scotch such rumors, and have allowed the currency to decline. Deutsche Bank points out the depreciation makes Malaysia's exports more competitive in the global market place. Mr. Najib said the government is confident increased global demand for manufactured goods such as electronics--which make up about one-third of total exports--will help offset the decline in commodity receipts. Still, oil and gas accounts for more than a fifth of total exports, and continued low crude prices, added to , a major trading partner, are likely to continue to weigh on overall exports, the bank said. The country's trade surplus already is narrowing, and any further move in this direction could put more pressure on the ringgit. That could spell trouble for companies that have large overseas debt. Malaysia's total external liabilities stood at 70% of GDP at the end of September, and companies already are spending less on investment as servicing costs in dollar terms climb higher. Some economists think the central bank will react to the situation by reversing last year's interest rate increase. Others think the bank will stand pat, while Deutsche Bank said it believes a further rate rise is possible to ensure more capital doesn't flow out of the country and to support the ringgit. Central Bank Gov. Zeti Akhtar Aziz said Thursday that monetary policy is already "highly accommodative." The central bank last raised the overnight policy rate by 0.25 percentage points in July and has held the benchmark rate steady at 3.25% since then. Write to Jason Ng at and Tom Wright at Credit: By Jason Ng and Tom Wright
Subject: Budgets; Economic development; Recessions; Natural gas
Location: Malaysia Venezuela Russia Asia Nigeria
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646542262
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646542262?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop Again on Demand Concerns; Weak Economic Outlook Raises Worries About Demand for Crude
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
Between the IMF forecasts and Iraqi production reports, "you have a hit from demand, you have a hit on supply--a double whammy to the downside," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Abundant supply and tepid demand for oil have sent shock waves through the markets, with crude shedding close to 60% of its value since a peak in June.
Full text: Oil prices fell again Tuesday on concerns about demand for the commodity amid weak global economic growth. Prices have slumped for months as the market has become increasingly oversupplied and producers have been unwilling to cut output. While much of the global glut of crude is due to rising production, particularly in the U.S., concerns about weak demand have also weighed on the market. On Monday, the International Monetary Fund downgraded its global economic outlook, adding to worries that global oil demand will be unable to keep up with supply. "The global economy's going to continue to weaken, and crude prices are going to continue on their path to the point where we start to see production drop in the U.S.," said Matt Smith, commodity analyst at Schneider Electric SA, an energy-consulting firm. On the New York Mercantile Exchange, light, sweet crude for delivery in February fell $2.30 below Friday's settlement, down 4.7% to $46.39 a barrel. The U.S. market did not settle Monday due to a federal holiday. The February contract expired at settlement Tuesday. The most-actively traded March contract fell $2.66, or 5.4%, to $46.47 a barrel. Brent crude, the global benchmark, fell 85 cents from Monday's settlement, or 1.7%, to settle at $47.99 a barrel on London's ICE Futures exchange. Brent posted steep losses on Monday, so the drop in the Nymex price on Tuesday reflected U.S. investors catching up. Adding to the global growth concerns, China on Tuesday reported its slowest growth in a quarter century. China is the No. 2 oil consumer and the top importer of oil. Reports that Iraqi oil output hit a record in December also weighed on prices. Between the IMF forecasts and Iraqi production reports, "you have a hit from demand, you have a hit on supply--a double whammy to the downside," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. Abundant supply and tepid demand for oil have sent shock waves through the markets, with crude shedding close to 60% of its value since a peak in June. While the low prices are a and businesses in importing countries, the positive effects are being offset by weaker investment and a stronger dollar, the IMF said. "The price of oil is a shot in the arm in the short term," IMF chief economist Olivier Blanchard told The Wall Street Journal. "But it is just not enough to compensate for weakness in the world economy." The fund cut its global growth forecast for 2015 by 0.3 percentage point to 3.5%. It added that, for many oil importers outside the U.S., the boost from lower oil prices is muted by local-currency depreciation against the U.S. dollar. Oil is traded in dollars, so a strong dollar makes oil more expensive for buyers using foreign currencies. China said its economic growth in 2014 slowed to 7.4%, its weakest rate in decades. Growth in the fourth quarter was 7.3%, a bit stronger than expected, while industrial production also overshot consensus forecasts. "The China figures give a mixed sentiment to the market," Phillip Futures said in a report. "The figures display a weak current situation due to weaker GDP figures. However, with a higher industrial production, this suggests that the longer term remains positive." The short-term picture for oil, however, remains bearish as the 93 million-barrels-a-day global market continues to be oversupplied by at least 1.5 million barrels a day, analysts say. "The reason for the pullback has largely been because the economic conditions have yet to change," said Jameel Ahmad, chief analyst at FXTM. "There remains a supply surplus and until this is significantly altered, the chances of a recovery in price will be very low." Gasoline futures for February delivery fell 4.6 cents, or 3.4%, to $1.3128 a gallon. February diesel lost 3.9 cents, or 2.3%, to $1.6266 a gallon. Eric Yep and Ian Talley contributed to this article. Write to Georgi Kantchev at and Nicole Friedman at Credit: By Nicole Friedman And Georgi Kantchev
Subject: Petroleum industry; Supply & demand; Industrial production; Futures; Crude oil prices; Economic growth
Location: China United States--US
People: King, Martin Luther Jr (1929-68) Najib Abdul Razak
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Schneider Electric SA; NAICS: 335311; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646542318
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646542318?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Traders Float Bets as Price of Oil Falls
Author: Kent, Sarah; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2015: C.4.
Abstract:
The opportunity to stockpile oil in such large quantities has come from the dramatic shift in the market for the commodity in recent months. Since June, prices have collapsed, tumbling by more than 50% amid soaring production from the U.S. and unwavering output from the Organization of the Petroleum Exporting Countries, at a time when global economic growth -- the main determinant of demand -- is slowing.
Full text: The tanker TI Oceania was built to ferry vast quantities of oil across oceans, but for the next year it is expected to remain anchored off Singapore, storing millions of barrels of oil for Vitol SA, a trading house. According to shipbrokers and analysts, the 3-million-barrel megaship -- one of the largest in the world -- is just one example of efforts by traders to turn a profit in the slumping global oil market. The strategy is simple: Buy and store oil at cheap prices now, selling futures contracts to lock in the higher prices expected later. "It is one of the easy ways to make money and that's one of the interesting things about it from a trading perspective: It's a counter cyclical source of profit for the Vitols and Glencores and Trafiguras," said Craig Pirrong, a finance professor at the University of Houston, referring to a handful of big oil traders. According to shipbrokers and analysts, traders including Vitol SA, Gunvor SA, Trafigura Beheer BV and Koch Supply & Trading Co. Ltd. have chartered tankers capable of storing a combined total of more than 30 million barrels -- many of them in the past few weeks. Vitol, Gunvor and Trafigura declined to comment. Koch didn't respond to requests for comment. The opportunity to stockpile oil in such large quantities has come from the dramatic shift in the market for the commodity in recent months. Since June, prices have collapsed, tumbling by more than 50% amid soaring production from the U.S. and unwavering output from the Organization of the Petroleum Exporting Countries, at a time when global economic growth -- the main determinant of demand -- is slowing. The oversupply has given rise to a so-called contango in the market, when the current price of a commodity is lower than prices for delivery in the future. That makes it attractive for buyers to purchase oil now at the cheaper rates, store it and strike sales agreements at a higher price in the future, locking in profits. The price difference between the March and August contracts for Brent crude oil, the international benchmark grade, is currently $6 a barrel. That is the steepest premium since an oil- price slump in 2008 and 2009. For years, oil trading houses have contended with high prices and low volatility, which have squeezed margins. Firms have responded by investing in infrastructure like oil-storage tanks and refineries to gain flexibility in trading, as well as better information about the market. Combined with the companies' access to the physical oil market, these investments have made the trading firms uniquely well-positioned to store oil for a profit. Glencore PLC, a Swiss commodity-trading giant, and Trafigura Beheer, one of the world's largest independent oil traders, have both already highlighted to investors that the market's dramatic change since June is expected to bolster their profits. Onshore storage tanks are filling up fast. According to Citigroup Inc., China's coastline storage facilities ran out of space as the country filled up strategic oil reserves last year. Stocks at the U.S. storage hub at Cushing, Okla., have risen more than 20% since December, according to Genscape Inc., a data provider based in Kentucky. That means unusual storage options, such as the ships, are becoming increasingly popular. However, the trade isn't open to everyone. It requires detailed knowledge of the way oil is moved around the world. Making a profit depends onfactors including rates for freight and storage and, ultimately, finding a buyer for the crude. "If people think the contango is some kind of magical way to make money, they are incorrect," said Benoit Lioud, senior research analyst at Mercuria Energy Group, a Swiss trading house. --- Costas Paris in London and Christian Berthelsen and Nicole Friedman in New York contributed to this article. Credit: By Sarah Kent and Georgi Kantchev
Subject: Profits; Prices; Petroleum industry; Crude oil prices
Company / organization: Name: Trafigura Beheer BV; NAICS: 324110; Name: Vitol SA; NAICS: 424710, 424720, 486910
Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: En glish
Document type: News
ProQuest document ID: 1646546387
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646546387?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Investor Bind: How Low Can Oil Go?
Author: Friedman, Nicole; Copeland, Rob
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2015: C.1.
Abstract:
(Hedge funds that focus on commodity markets in general have lost nearly 10% over the past three years, according to trade publication Absolute Return.) But the oil market is increasingly volatile, with U.S. prices snapping a seven-week losing streak last week before falling again in electronic trading Monday.
Full text: The collapse in the oil market has been very good for Anuraag Shah. His hedge fund, Tusker Capital LLC, last spring made a bet that oil prices would fall and has since reaped big profits from their nearly 60% decline. But last Tuesday, Mr. Shah decided he had seen enough. He cashed out all of Tusker's bets against oil, walking away for the moment from a market that has already fallen 8.6% this year. Tusker, which manages roughly $100 million from Manhattan Beach, Calif., saw returns of 17% in 2014 and 10% this month alone through the middle of last week. Oil prices have plunged from north of $100 a barrel in June to less than half that level now, the victim of a growing surplus brought on by booming U.S. production and weaker-than-expected demand. As prices have careened toward six-year lows, the market has become more volatile. That has given investors opportunities to score big profits by betting on further declines. But some traders say the market has fallen too far, too fast -- creating the potential for an equally sharp rebound. "It's bloody nuts," said Mr. Shah, a veteran of trading giant Louis Dreyfus Commodities BV. He isn't putting a figure on it, but after oil's historic plunge, he doesn't see much further room for bearish bets to go. "I'm not saying this is the low, but we're not going to $20 or even $30 in the next month or two." Seven months into a swoon that few saw coming, investors such as Mr. Shah are reluctant to call a bottom for oil prices. Analysts who were slow to recognize the magnitude of the decline are now competing to put out the most bearish forecasts. J.P. Morgan Chase & Co. on Monday predicted U.S. oil prices would average $46 a barrel this year, while last week, Goldman Sachs Group Inc. called for an annual average of $47.15 a barrel. For investors, this presents a quandary: Falling oil prices recently have been one of the most consistently profitable bets in commodities. (Hedge funds that focus on commodity markets in general have lost nearly 10% over the past three years, according to trade publication Absolute Return.) But the oil market is increasingly volatile, with U.S. prices snapping a seven-week losing streak last week before falling again in electronic trading Monday. On Friday, U.S. oil prices rose 5.3% to $48.69 a barrel on the New York Mercantile Exchange. The Nymex market didn't settle Monday because of the U.S. holiday. Brent, the international benchmark, on Monday declined 2.7% to $48.84 a barrel. The sudden realization that the world has more oil than it needs sent analysts and traders scrambling to figure out how low prices need to go to rebalance the market. Analysts estimate the global market is oversupplied by anywhere between 1 million and 2.5 million barrels of oil a day. The Organization of the Petroleum Exporting Countries decided in November to maintain its production quotas rather than cut them in a bid to support the market, causing prices to plummet. Total crude-oil and fuel stockpiles in the U.S. hit a record high last week and traders are booking tankers to store oil at sea until they can find a buyer. Some energy companies have cut spending and laid off workers, but it could take months or even years for production to fall enough to erase the glut. Many money managers are staying on the sidelines, searching for clues that could mark a turning point for the market. These can range from economic growth forecasts for major oil consumers such as China, to retail gasoline prices and auto sales in the U.S., which could drive future demand. Lately, the market has become particularly focused on a survey of drilling rigs operating in the U.S. that is released each Friday by oil-field-services company Baker Hughes Inc., which can be an early indicator of how quickly production will grow in the future. The number of oil rigs operating in the U.S. has slid six weeks in a row. "The market is quite irrational" right now, said Alessandro Gelli, an analyst at Diapason Commodities Management SA in Lausanne, Switzerland, which manages $5 billion. "It's only moving with negative news -- all the positive-news aspects have been completely forgotten." Diapason has taken positions in the gasoline market that benefit from growing crude supplies, Mr. Gelli said, but he thinks it is too soon to say whether oil prices have hit their bottom. He is looking for signs that more panicky investors are piling in to bet on lower prices and for solid evidence that the supply glut will shrink, such as U.S. oil producers filing for bankruptcy. One hedge-fund manager said last week he saw little chance for a quick recovery, even if there are cuts to production. If Saudi Arabia or another producer cuts output, it would be "an entirely self-sacrificing gesture," because others would use the higher prices as an opportunity to produce more, Michael Hintze, founder of $14 billion CQS LLP, wrote in a letter to investors viewed by The Wall Street Journal. "The 'new normal' in the price of oil is a structural shift that is unlikely to be reversed over the next decade," Mr. Hintze wrote. "I believe we will have to become accustomed to a lower oil price for longer than most might think." There are some investors who see the rout in oil prices as a good long-term opportunity. Many market watchers expect prices to rise somewhat by year-end, with further gains in 2016 or 2017, even if they aren't sure when or at what level the market will turn around. MV Financial Group Inc. is planning to add commodities investments to its wealth-management assets for the first time in five years, said Katrina Lamb, head of investment strategy and research. The fund, which oversees $500 million, plans to place as much as 5% of its wealth-management assets in commodity exchange-traded funds, mostly energy funds, in the first three months of the year. "We have a nice entry point, price-wise," said Ms. Lamb, who thinks prices are unlikely to go far below $40 a barrel. But finding ways to profit in today's market can be stressful. Tariq Zahir, who oversees about $3 million as managing member of Tyche Capital Advisors in Laurel Hollow, N.Y., said he routinely wakes up in the middle of the night to trade during European hours. He has wagered that later-dated crude contracts will rise relative to near-term contracts. "I never get sleep anymore," he said. "Instead of doing a trade and holding onto it for four or five days, sometimes we're getting out during the same session." --- Juliet Chung and Timothy Puko contributed to this article.
Credit: By Nicole Friedman and Rob Copeland
Subject: Petroleum industry; Profits; Statistical data; Commodity prices; Crude oil prices; Investors
Classification: 9190: United States; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1646546521
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646546521?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Play Into Trial Over BP's Fines
Author: Gilbert, Daniel; Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2015: B.1.
Abstract:
[...]they plan to present evidence that BP's subsidiary is controlled by the parent and can weather the impact of a fine. Because the subsidiary "can readily access equity, capital, or borrowing from BP, it can pay the maximum penalty," lawyers for the U.S. Justice Department wrote on Dec. 19, 2014.
Full text: After its oil-well explosion in the Gulf of Mexico in 2010, BP PLC caught one lucky break: Oil prices surged and boosted its cash flow, helping it to cover billions of dollars in legal and oil-spill cleanup costs. Now BP is facing up to $13.7 billion in federal fines -- about $10 billion more than it has set aside -- in much less comfortable economic circumstances now that oil prices have plunged. The company is set to go to trial Tuesday in federal court in New Orleans over how much it must pay the U.S. government for each barrel of crude that spilled into the Gulf, in the final phase of litigation stemming from violations of the Clean Water Act. A global oil glut has sent prices tumbling since the summer. Crude now sells for about 40% less than it did in April 2010, when the explosion of the Deepwater Horizon rig killed 11 people and touched off the largest offshore oil spill in U.S. history. The court's decision on the fines comes at a vulnerable moment for BP. Once the pride of England -- BP stands for British Petroleum -- the company already has had to sell off a lot of assets to cover spill costs. One of its biggest bets is in suddenly hostile territory: Russia. The company is carrying $53.6 billion in debt, $21 billion more than at the time of the spill. Some analysts have been speculating that a slimmed-down BP could become a takeover target once the Deepwater Horizon litigation concludes. BP is already feeling the effects of lower oil prices. On Thursday it said it would lay off about 300 workers in Scotland, and analysts are lowering their forecasts for BP's 2014 earnings, which are slated to be released Feb. 3. The steep price decline "reduces BP's flexibility to cope with any further claims or shocks," analysts at Fitch Ratings wrote Friday. The drop "will severely dent earnings in 2015, and will likely stretch BP's credit profile beyond what is acceptable for an 'A' rating, in the short run at least." While the collapse in oil prices will crimp BP's cash flow, the company's lawyers aim to use it to their advantage. They plan to argue that the price drop has weakened BP Exploration & Production Inc., the subsidiary that is charged with the spill violations, and the court should weigh this in imposing a penalty. "We look forward to presenting our case at trial," said J. Andrew Langan, a lawyer representing BP's subsidiary. The company "should be subject to a Clean Water Act penalty at the lower end of the statutory range." BP had $30.7 billion in cash by the end of September. But the company argues that it has no obligation to lend money to its subsidiary and that the court should disregard the broader BP group's financial resources in imposing a fine. BP also argues it should get credit for leading the "largest environmental response operation in the nation's history," according to court pleadings. The company has incurred $43 billion of spill-related costs, including criminal and civil settlements and $14 billion for the Gulf cleanup. Lawyers for the government acknowledge that BP spent money that it wasn't required to, citing $846.2 million that BP paid for research into the spill, tourism promotion, and seafood testing, among other expenses, that could be deducted from the penalty. But they plan to present evidence that BP's subsidiary is controlled by the parent and can weather the impact of a fine. Because the subsidiary "can readily access equity, capital, or borrowing from BP, it can pay the maximum penalty," lawyers for the U.S. Justice Department wrote on Dec. 19, 2014. High oil prices buoyed BP as it unloaded properties to pay for spill-related costs. The company has raised more than $40 billion from selling assets since 2010, including refineries in California and Texas, and fields in the Gulf, Alaska, Colombia and the North Sea. "BP sold a hell of a lot of assets when the price of oil was a hell of a lot higher than it is now," said Richard Champion, chief investment officer at Sanlam Private Investments, which held BP shares as of December. As a result, BP made more money from the sales than it could at current prices, he added. The Deepwater Horizon disaster spurred a tangle of litigation, including class-action lawsuits filed on behalf of people, businesses and governments that contend that they were hurt by the oil spill. But the case that could be the most costly is the battle with the U.S. government over violations of the Clean Water Act. Judge Carl Barbier, a federal-district court judge in New Orleans handling the case, divided it into three parts. In the first step, to determine liability, Judge Barbier ruled in September that in an effort to cuts costs, BP acted recklessly before the drilling rig exploded. On Thursday, the judge ruled on the second major phase of the litigation, finding that BP didn't act irresponsibly in the wake of the accident. Judge Barbier concluded that the well leaked 4 million barrels, less than prosecutors had claimed. After subtracting the oil that was captured without spilling into the Gulf, the judge determined BP is liable for a fine on 3.19 million barrels. Now the question is how much the company must pay in pollution penalties for each of those barrels. The government is seeking a $4,300 fine for each one; BP contends that fines should be capped at $3,000 per barrel. The penalty sought by the government would be the largest by far for violating the Clean Water Act; BP calls it "a gross outlier compared to penalties in any other case or settlement." The highest penalty imposed under the act to date is the $1 billion that Transocean Ltd. paid in a 2013 settlement over the same spill. Tom Claps, a legal analyst at Susquehanna Financial Group, estimates that BP's penalty will likely total about $6 billion to $7 billion. In addition to BP's steps to clean up the spill, he says, Judge Barbier found BP bears only two-thirds of the blame for the accident, with contractors Transocean and Halliburton Co. at fault for 30% and 3%, respectively. Credit: By Daniel Gilbert and Justin Scheck
Subject: Petroleum industry; Cash flow; Prices; Environmental cleanup; Trials; Oil spills
Location: United States--US California
Company / organization: Name: BP Exploration & Production Inc; NAICS: 211111; Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 9190: United States; 4330: Litigation; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646549436
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646549436?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Encore: Planning & Living the New Retirement (A Special Report) --- Second Acts Oil and Vinegar: Right Mix for Success
Author: Essick, Kristi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Jan 2015: R.5.
Abstract: None available.
Full text: Jim Milligan Age: 62 Home: Traverse City, Mich. First/primary career: Sales and marketing executive Current path: Owner of a chain of food shops Why this path: "I stayed with the same corporation for 30 years, but I always harbored a dream of becoming an entrepreneur." After a 30-year career in sales and marketing at 3M Co., Jim Milligan was laid off at age 55. It was, he says today, the "best thing that could have happened." "Ten years into my career at 3M, I started making plans to open my own business so I could be my own boss, but it took me another 20 years to actually do it," says Mr. Milligan, who now owns a chain of gourmet olive-oil and vinegar shops called Fustini's Oils & Vinegars. Losing his job, he adds, was "scary at the time, but . . . it forced me to make a leap." To start, he knew he wanted to work in Traverse City, Mich., a town where he and his family had vacationed for many years. He also thought back to trips to Europe, where he enjoyed visiting shops selling products like wine, mustard and olive oil. Relatively quickly, he settled on the idea of opening a "tasting room of some kind," Mr. Milligan recalls. In particular, olive oil seemed to fit the bill. "It was just such a fast-growing market in the U.S.," he says. In May 2008, just six months after his layoff, Mr. Milligan opened the doors of the first Fustini's in downtown Traverse City. The tiny shop, which Mr. Milligan funded with $50,000 of his retirement savings, sold cold-pressed olive oils from around the world, as well as aged balsamic vinegars. "Fustini" is the Italian word for the metal urns that hold the oil until it's bottled on the spot for customers. "I just wanted to open a nice, fun little business, but after only a few months, I realized this could be much bigger," Mr. Milligan says. The company now has five stores in Michigan, including a much-expanded flagship store in Traverse City, and one shop in Maui, Hawaii. Fustini's also offers in-store cooking classes and publishes cookbooks. Sales this year will total about $3.5 million. "It was pretty stressful at times, but I'm glad I expanded," says Mr. Milligan, who co-founded the business with his wife. (The two have since divorced; he bought her portion of the company.) "Now lots more people get to try fresh olive oils and learn to cook more healthfully." After years of 70-hour weeks, Mr. Milligan hopes to dial back to a manageable 40 hours and has hired a general manager to ease that transition. He wants to travel, play golf, spend time with his two grown daughters and get involved in philanthropic projects. "I didn't expect to be working at full tilt in my 'retirement', but I found out something about myself, which is I love the 'chase' of business," says Mr. Milligan. "Though it's a lot more fun selling olive oil than computer storage tapes." --- Email: encore@wsj.com Credit: By Kristi Essick
Subject: Career changes
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.5
Publication year: 2015
Publication date: Jan 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: Feature
ProQuest document ID: 1646549502
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646549502?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Airlines Ponder Cheap Oil Rewards; Carriers May Pay Down Debt or Return Cash to Shareholders
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
[...]we are going to be looking at owning substantially all the aircraft we are taking delivery of," he said.
Full text: DUBLIN--U.S. airlines are enjoying the prospect of potentially being able to pay down debt ahead of plan or reward shareholders with share repurchases if low fuel prices persist through much of the year. "There is a scenario, but we have to wait a few months to see what happens, where airlines could be generating more cash than maybe they expected when they put together their plans not that long ago," United Continental Holdings Inc. treasurer Gerry Laderman said in Dublin. The airline is due to publish full-year results on Jan. 22. North American carriers are poised to earn $13.2 billion in collective profit this year, up from $11.9 billion estimated for 2014, the International Air Transport Association said in . Profit could be even higher with spot fuel prices far below the average IATA used for its projection in December. "We could potentially stand to gain a lot," American Airlines treasurer Tom Weir said. With no fuel hedges in place the carrier should see no delay in reaping the benefits of low fuel costs. American Airlines reports fourth-quarter earnings on Jan. 27. The "should, all things being equal, provide for healthier operating cash flow," he said. "2015 looks like a fairly promising year in terms of fuel being down and revenue being constant or possibly growing," he said. How will the money be allocated? "I would picture some kind of balance," Mr. Weir said. The airline last year made an extraordinary contribution to its pension plan and paid down debt, he told the Airline Economics annual financing forum in Dublin. Debt repayment would also be on the agenda of United's Mr. Laderman. He said investors may also want to be rewarded with share repurchases. "We think the U.S. airlines should continue on their path of returning cash to shareholders," Helane Backer of Cowen Securities said on Tuesday. Carriers should avoid cutting ticket prices on low fuel while travel demand remains robust, she said. U.S. carriers also could parlay their improved financial position into more attractive financing terms for new aircraft deliveries due in coming months. American Airlines has 75 jets for its mainline operations due for introduction this year with funding for all but a handful yet to be secured, Mr. Weir said. The carrier also will introduce more than 30 regional jets. "We are sizing our financing requirements now," he said. American Airlines is looking to own most of those aircraft rather than use leases to fund them to better balance its fleet, he said. "Generally speaking we are going to be looking at owning substantially all the aircraft we are taking delivery of," he said. Market stability is giving the airline plenty of financing options, he said. United is still looking to fund some aircraft deliveries this year, including Boeing 787-9 Dreamliners and 737-900ER single-aisle jets, even after raising funding last year for some 2015 handovers, Mr. Laderman said. Discussions with banks are now starting to see if they can be competitive with capital market funding, he said. Corrections & Amplifications In an earlier version of this article, Mr. Laderman's name was incorrectly spelled in the last paragraph. Write to Robert Wall at Credit: By Robert Wall
Subject: Airlines; Airline industry
Location: United States--US
Company / organization: Name: American Airlines Inc; NAICS: 481111; Name: United Continental Holdings Inc; NAICS: 481111
Product name: Boeing 787
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646568697
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646568697?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Baker Hughes Earnings Top Expectations; Oil-Field Services Company Warns of Pressure From Drop in Oil Prices
Author: Dulaney, Chels ey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
[...]oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices. Since the deal was struck, oil prices have continued their downward spiral.
Full text: Baker Hughes Inc.'s results in its December quarter easily topped Wall Street expectations, as the oil-field services company benefited from stronger-than-projected demand and cost cuts. Still, Baker Hughes Chief Executive Martin Craighead warned on Tuesday that 2015 results would likely be pressured by the recent drop in oil prices. The company said it would cut about 7,000 workers--or about 12% of its workforce--mostly during the first quarter. Shares of the company fell 1.8% Tuesday to $55.56. "When we reflect on the marketplace, the bearish sentiment that has pervaded our industry is understandable, considering the steep drop in commodity prices in recent months," Mr. Craighead said. "While market demand ended up being more resilient in the fourth quarter than many had predicted, the recent declines seen in rig counts will clearly affect results in 2015." On Friday, activist investor ValueAct Capital Management LP in Baker Hughes--an unusual move, since Baker Hughes is in an agreement by larger rival Halliburton Co. ValueAct didn't indicate its motives in the filing with the Securities and Exchange Commission that revealed its stake. The deal with Halliburton, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices. Since the deal was struck, oil prices have continued their downward spiral. For the fourth quarter ended Dec. 31, Baker Hughes reported a profit of $663 million, or $1.52 a share, up from $248 million, or 56 cents a share, a year earlier. Excluding a gain on deconsolidation of a join venture, adjusted per-share earnings were $1.44. Revenue grew 13.2% to $6.64 billion. Analysts polled by Thomson Reuters were expecting adjusted earnings of $1.07 a share on revenue of $6.41 billion. The North American segment, the company's largest geographic business by revenue, reported a 20.4% increase in revenue to $3.3 billion. Revenue climbed 13.1% in the Middle East and Asia Pacific region, and 5% in the Europe, Africa and Russia Caspian segment. Latin America revenue edged down 2%. Expenses, meanwhile, fell 4.5%. Alison Sider contributed to this report. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Oil service industry; Financial performance
People: Craighead, Martin
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Securities & Exchange Commission; NAICS: 926150; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646610490
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646610490?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Halliburton Results Beat Expectations; Oil-Field Services Company Warns 2015 Will Be Challenging
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
[...]oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices.
Full text: Halliburton Co. posted higher earnings and revenue in its December quarter but warned that 2015 will be challenging, as the oil-field services moves forward with Baker Hughes Inc. The deal with Baker Hughes, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices. Chief Executive Dave Lesar said Tuesday that Halliburton benefited from cost cuts in the latest quarter, but warned that the industry will continue to face pressure this year. Halliburton said it would likely take another restructuring charge in the first quarter for "severance and other actions." Shares of Halliburton fell 1.9% to $38.38. Halliburton, the second largest oil-field-services company and a bellwether for the industry, last month said it outside the U.S. as it seeks to reign in costs to help offset pricing pressures. In recent weeks the Houston-based company said it would downsize closer to home. Industry experts have predicted that firms like Halliburton and Baker Hughes will have to shrink further as clients demand price cuts. The merger will give Halliburton and Baker Hughes better depth and breadth while saving billions a year in costs. For the quarter ended Dec. 31, Halliburton reported a profit of $901 million, or $1.06 a share, compared with a year-earlier profit of $793 million, or 93 cents a share. Halliburton said it took a $129 million restructuring charge in the quarter to temper the weak outlook. Excluding that and a $19 million charge related to the Baker Hughes acquisition, earnings were $1.19 a share. Revenue grew 14.8% to $8.77 billion. Analysts polled by Thomson Reuters expected earnings of $1.10 a share and revenue of $8.78 billion. The company's completion and production segment reported a 20.5% revenue surge to $5.47 billion, while its drilling and evaluation revenue climbed 6.5% to $3.3 billion. Earlier Tuesday, Baker Hughes also that topped Wall Street expectations as it benefited from stronger-than-projected demand and cost cuts. Alison Sider contributed to this report. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Oil service industry; Financial performance; Corporate profits
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646633816
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646633816?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Apache CEO Steven Farris Retires; Houston Oil Company Names John J. Christmann IV Successor
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
In recent months, Apache has increased its focus on the North America region, as activist investor Jana Partners LLC pushes the company to consider a possible sale or spinoff of its international operations to focus on shale drilling in the U.S. Mr. Christmann has been appointed to the board.
Full text: Apache Corp. Chief Executive Steven Farris has retired, effective immediately, coming as the oil company's plans to downsize in response to plunging fuel prices. He is succeeded by John J. Christmann IV, 48 years old, who is currently Apache's executive vice president and chief operating officer for North America. In recent months, Apache has increased its focus on the North America region, as activist investor Jana Partners LLC pushes the company to consider a possible sale or spinoff of its international operations to focus on shale drilling in the U.S. Mr. Christmann has been appointed to the board. The news comes a week after Houston-based Apache said it was , or about 250 employees. Apache, one of the biggest energy companies in the U.S., pumps oil and gas in places from Texas to Egypt and employs about 5,000 workers around the globe. It on write-downs of its oil and gas assets resulting primarily from lower commodities prices. Last month, Apache to Woodside Petroleum Ltd. for $2.75 billion, as part of its efforts to exit international businesses. "After more than 25 years with the company and 14 years as CEO, it is time to hand over the reins to a new generation of leaders," said Mr. Farris, 66. He will continue as nonexecutive chairman until May 1. Director John Lowe, 54, will then succeed Mr. Farris as nonexecutive chairman. Under his tenure, full-year sales grew from about $4.2 billion in 2003 to $16.42 billion in 2013. Mr. Farris joined Apache in 1988 and worked as senior vice president and chief operating officer before becoming CEO in 2002. Mr. Christmann has been with Apache for 18 years and has served as vice president of business development and vice president of the Permian Region, a key production area in Texas. As vice president of Permian, he established Apache's Midland office and oversaw a doubling of production. Shares of Apache, off about 2% in light premarket trading, have been up about 30% in the past 12 months through Friday's close. Write to Angela Chen at Credit: By Angela Chen
Subject: Appointments & personnel changes; Chief executive officers; Energy industry
Location: United States--US Egypt Texas North America
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: Jana Partners LLC; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646698499
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646698499?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Norway to Award Oil and Gas Drilling Licences; Some 57 License Blocks will be Awarded in 2016, Including 34 in the Barents Sea
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract: None available.
Full text: OSLO--Norway's government said on Tuesday that it would award new oil and gas drilling licenses in 2016, including the first new areas to be opened for drilling since 1994, to encourage exploration amid low oil prices and challenging times for the oil sector. The government said that 57 license blocks will be awarded in the first half of 2016, including 34 in the southeastern Barents Sea, an Arctic area previously disputed with Russia. Five years ago, the two countries agreed to split the 175,000 square-kilometer area, ending a four-decade stalemate. "By starting petroleum activity in the southeastern Barents Sea, we are reaching a milestone in the Norwegian petroleum business," Norway's Minister of Petroleum and Energy Tord Lien said. "For the first time since 1994, we are exploring a brand new area." The opportunity to apply for new licenses is given at a time when the price of Brent oil is trading at five-year lows, at around $49 per barrel--down 55% from six months ago. Oil companies are reducing spending significantly, and the profitability for many high-cost projects off Norway is under threat. The government said it was important to award new acreage to create value for society from the Norwegian continental shelf and boost the domestic oil-field services industry. "This is especially important in today's challenging situation in the industry," it said. Some Arctic oil projects are unprofitable at current prices. Statoil and its partners delayed last summer the Johan Castberg field in the Barents Sea, estimated to hold up to 600 million barrels, citing high costs. Rystad Energy estimated that the field required an oil price of more than $80 per barrel to be profitable. "A long-term view and predictability is absolutely necessary to make sure the Norwegian shelf is still an attractive area in which to invest. This new acreage will contribute to that," said Gro Brækken, chief executive of the industry association Norwegian Oil and Gas. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646737018
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646737018?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Government Bonds Rise as Crude-Oil Prices Fall 4%; Investors Take Advantage of Earlier Pullback to Buy Haven Debt
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
Bond prices got an additional boost from the prospect that the European Central Bank will unveil a program later this week to buy government bonds in the eurozone aiming to jumpstart a stagnant economy and curb deflation risk.
Full text: Treasury bonds strengthened on Tuesday, with the yield on the 30-year bond falling to a record low, as a selloff in crude-oil prices stoked demand for haven assets. Bond prices got an additional boost from the prospect that the European Central Bank will unveil a program later this week to buy government bonds in the eurozone aiming to jumpstart a stagnant economy and curb deflation risk. Hope of fresh stimulus from the ECB has pushed up eurozone bond prices to record highs this month with yields hitting record lows. That has turned higher-yielding U.S. government bonds into an attractive bargain. "The trend is certainly towards lower rates,'' said Scott Buchta, head of fixed income strategy at Brean Capital LLC. In late afternoon trading, the yield on the 30-year Treasury bond was 2.399%, smashing the record low of 2.413% made last Thursday. The yield on the benchmark 10-year note was 1.806%, compared with 1.815% on Friday. Bond prices rise as their yields fall. The bond market was closed Monday for a public holiday. Investors had piled into ultrasafe U.S. government bonds this month, driven by an uncertain global growth outlook and deflation concerns in Europe amid slumping oil prices. The 10-year U.S. bond yield fell to the lowest level in 20 months last week and has fallen from 2.173% at the end of last year. Crude-oil prices tumbled by 4.7% on Tuesday amid persistent concerns over weak demand from Asia and Europe. U.S. oil prices have fallen more than 50% since June. The International Monetary Fund said late Monday that it has cut forecasts for global growth for this year and next. The IMF expects the world economy to expand 3.5% this year and 3.7% in 2016, both 0.3 percentage points lower than it had previously expected. Lower oil prices have raised concerns over deflation and the eurozone is perceived as the most vulnerable to get hit by persistent decline in consumer prices. Deflation boosts the value of fixed-income assets, attracting buyers who are worried about the risk. The annual inflation rate in the eurozone fell below zero last month for the first time since 2009. The U.S. annual inflation rate last month slowed to 0.8%, the lowest in more than five years. "The Treasury market continues to drift toward lower yields...on lower inflation expectations with oil's continued decline,'' said Ian Lyngen, senior government bond strategist at CRT Capital Group LLC. The ECB's monetary policy meeting due Thursday is the main focus for global investors this week, which will shape the direction of bond yields in the short term. "I suspect that U.S. Treasurys will follow German bonds after the ECB announcement," said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York. Mr. Milstein said that if the ECB announcement disappoints investors with the size of the bond buying less than market participants had hoped for, German bonds and Treasurys could sell off. "If the ECB does in fact announce a large program on the order of a trillion euros or more, then I think we get a Treasury rally,'' he said. On Tuesday, the yield on the 10-year German government bond settled at 0.397%, after closing at a record low of 0.387% on Monday, according to Tradeweb. Lower bond yields mean lower income for bond investors, and with global government-bond yields falling sharply over the past year, some investors say bond yields at these slim levels provide little value. They caution that if sentiment on the global growth outlook brightens, the bond market is vulnerable for a selloff as demand for haven bonds will diminish. U.S. Federal Reserve officials indicated last month that they are prepared to raise interest rates in 2015, seeing the impact of falling oil prices on lower inflation as transitory. Fed officials took note of weaker growth overseas, but so far this factor hasn't pushed them to reassess the timing for higher interest rates. Interest-rate futures markets show investors and traders expect the Fed to be patient, which has encouraged investors to buy bonds. Many expect the Fed to wait until late 2015 before tightening monetary policy Write to Min Zeng at Credit: By Min Zeng
Subject: Treasuries; Bond markets; Eurozone; Deflation
Location: United States--US Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language ofpublication: English
Document type: News
ProQuest document ID: 1646737130
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646737130?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Majors Show Early Interest in Mexico Bidding Round; Oil and Gas Blocks in Mexico's Gulf Hold Appeal Despite Oil-Price Drop
Author: Iliff, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Major international oil firms including Exxon Mobil Corp. and Royal Dutch Shell PLC are showing interest in the initial phase of a bidding round for exploratory oil and gas blocks in the shallow waters of the Gulf of Mexico that will be assigned by the government midyear, a top energy official said. The recent plunge in oil prices appears to not to have affected the shallow-water phase of the bidding round because of modest production costs, while a later phase involving more costly production in shale-rock formations will be trimmed back to offer only the most attractive of the so-called unconventional resources, said Juan Carlos Zepeda, head of the National Hydrocarbons Commission. The commission is overseeing what Mexico is calling "round one," since it is the first of its kind since an energy overhaul last year that ended the 76-year government monopoly on oil exploration and production by national firm Petróleos Mexicanos, or Pemex. "Even in this price environment, the round is moving forward quite well," Mr. Zepeda told journalists Monday during a tour of "data rooms" where oil companies can see seismic and other data on the areas before bidding. Among the seven companies that have been authorized into the data rooms, after paying fees, are Exxon Mobil, Chevron Corp., Shell, Ecopetrol SA and BG Group PLC, the commission said. A total of 30 companies have shown some interest in the process short of paying for entry into the data rooms, the commission said. Mr. Zepeda said the shallow-water round is in an area of the Gulf of Mexico where there already is significant oil production, and where costs are less than $20 a barrel, making them attractive even in the current environment of depressed prices. A later phase of the bidding round this year involving shale-rock formations and so-called tight oil that is complicated and expensive to extract will be trimmed back to include only the most attractive areas due falling oil prices, Mr. Zepeda said. The commission, along with the Energy Ministry, will decide by March or April which areas will be trimmed, he added. The highly anticipated bidding phase near the end of the year for blocks in the mostly unexplored deep waters of the Gulf of Mexico will go forward as planned since oil and gas there won't be produced for at least eight years, and prices will likely have recovered, Mr. Zepeda said. The Mexican legislature passed the final details of the energy overhaul last year after 10 straight years of declining oil production by Pemex. Supporters of the move argued that Mexico was running out of the "easy oil" that Pemex was best at producing and needed private expertise and money to tackle more complicated fields. Opponents said it was a sellout to multinational companies that eventually would gut Pemex. Write to Laurence Iliff at Credit: By Laurence Iliff
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16467 69861
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646769861?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Bank of Canada Seen Standing Pat; Interest-Rate Decision to Come Amid Uncertainty About Tumbling Oil Prices
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
Sliding prices have "significantly dampened" the sales outlook of Canadian energy firms and are weighing on their investment plans, according to findings from the central bank's latest quarterly survey of businesses released two weeks ago.
Full text: OTTAWA--The Bank of Canada is expected to hold its key overnight rate steady at 1% in its first policy decision of 2015 Wednesday, a decision that would mark the central bank's longest pause in 60 years. That was the unanimous forecast of the 12 primary dealers of Canadian government securities polled by The Wall Street Journal. The central bank's policy statement--and the first of its quarterly economic forecasts for the year--come amid uncertainty about the impact of lower oil prices on Canada's economy. Plunging oil prices were the key reason five of the economists surveyed joined the two who in December forecast the Bank will stay sidelined until 2016, making the minority outlook the majority view in less than two months. Canada is a net exporter of oil, and the price collapse threatens to dent hopes of Canadian policy makers who have been counting on exports and business investment to take over from debt-ridden consumers and drive economic growth. Bank of Canada Governor Stephen Poloz said in early December that lower oil prices would shave one-third of a percentage point off 2015 growth. At that time, oil was trading near $70 a barrel; prices have now slid below $50 a barrel. The central bank will update economic projections in the Monetary Policy Report which will accompany its rate statement. The primary focus is "definitely going to be oil," said Jimmy Jean, economic strategist at Desjardins Capital Markets. "There's no dancing around that." Sliding prices have "significantly dampened" the sales outlook of Canadian energy firms and are weighing on their investment plans, according to findings from the central bank's latest quarterly survey of businesses released two weeks ago. Energy sector investments account for a substantial portion of overall capital spending. Last week, Suncor Energy Inc., Canada's biggest oil-sands producer, said it would cut its 2015 capital-spending program by 1 billion Canadian dollars ($837 billion), joining a growing list of energy firms that have scaled back spending plans. Tim Lane, a deputy governor of the central bank, offered a grim preview of the potential cost when he said in a speech last week that lower oil prices are "likely, on the whole, to be bad for Canada." Some economists believe the central bank's tone will be dovish enough to open the door to rate cuts. "Don't be surprised of the Bank of Canada verbally opens the door to a rate cut in the coming statement because at this point, the growth outlook has enough clouds on it for 2015," said Avery Shenfeld, chief economist of CIBC World Markets. Even so, he said the central bank is unlikely to actually cut rates for fear of worsening record high household debt. The Bank of Canada has not raised interest rates since September 2010. Its expected stand-pat decision this week would mean it has stayed on the sidelines for four years and four months, matching its last lengthy pause between October 1950 and February 1955, according to Bank of Canada data. Write to Nirmala Menon at nirmala.menon@wsj.com Credit: By Nirmala Menon
Subject: Central banks; Monetary policy; Prices; Capital expenditures; Economic forecasts
Location: Canada
People: Poloz, Stephen
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646769864
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646769864?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Libya's OPEC Governor Kidnapped; No One Has Claimed Responsibility for the Abduction of Oil Ministry Official Samir Kamal
Author: Said, Summer; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract: None available.
Full text: DUBAI--Libya's OPEC Governor Samir Kamal was kidnapped last week in the militia-held capital of Tripoli, two officials familiar with the matter said Tuesday, as turmoil continues to ravage the north African country almost four years after the collapse of its central government. Mr. Kamal, who is also the head of the planning department at the Tripoli-based government's oil ministry, was last seen Thursday, said one official at the National Oil Corp., or NOC. "Nobody knows why [he was kidnapped]," the official said. "Some people know where he is," he added. Another NOC official confirmed that Mr. Kamal was missing, but declined to give further details. No one has claimed responsibility for his kidnapping. Kidnappings have become common in Libya, where oil fields have been seized by armed groups and control is divided between two rival governments. The member of the Organization of the Petroleum Exporting Countries has been in chaos since the toppling of former strongman Moammar Gadhafi. It loyal to an internationally recognized government and a rival administration based in Tripoli and backed by Islamist groups and politicians. The government in Tripoli, which hasn't been recognized by the United Nations, has appointed its own oil minister Mashallah Zawi, who has been challenging the internationally recognized government of Prime Minister Abdullah al-Thinni, which named Mustafa Sanallah as chairman of NOC. Samir Kamal is a member of the oil ministry run by the rival government in Tripoli that hasn't been recognized the U.N. A recovery in Libya's oil production to as high as 900,000 barrels a day has been cut short by fighting between Islamist militia and the government in eastern Libya. Libya's production capacity stands at about 1.5 million barrels a day, but disruptions have been frequent since the end of Moammar Gadhafi's. Write to Summer Said at summer.said@wsj.com and Benoît Faucon at benoit.faucon@wsj.com. Credit: By Summer Said And Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646777567
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Nigeria May Double VAT Tax Because of Oil's Drop; Finance Minister Says Government Spending Also Under Review as Oil Revenue Declines
Author: McGroarty, Patrick; Hinshaw, Drew; Akingbule, Gbenga
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
The Nigerian government's heavy reliance on revenues from oil production are raising concerns that the steep drop in prices could crimp its ability to pay for overdue infrastructure projects and fight the intensifying Islamist insurgency. "Irrespective of the monetary policy response, the economy will be subject to painful adjustments," said Nema Ramkhelawan-Bhana, an analyst at Rand Merchant Bank in Johannesburg.\n
Full text: Nigeria plans to double its value-added tax and cancel government projects if oil prices continue to slide, its finance minister said Tuesday, as Africa's top crude exporter adjusts to crashing prices. The country is reviewing some 6,000 ongoing projects to see which will be kept, delayed, or scrapped, said Finance Minister Ngozi Okonjo-Iweala: "It will be a huge exercise," she said. If oil prices continue to sink, it will also raise its value-added tax, which at 5% is among the world's lowest, to 10%, she said in an interview. Nigeria faces a test of whether it can raise revenue and cut spending as quickly as oil prices are tumbling. The collapse in global crude rates has arrived at a particularly inopportune moment for Africa's largest economy and country by population. The government earns about 80% of its income from petroleum exports. Also on Tuesday, the country's central bank kept its key interest rate on hold, betting recently imposed capital controls will be enough to arrest the damage caused by tumbling oil. The country's drop in oil income has come just as spending is rising. The country of 174 million is locked in a costly war against Boko Haram, an Islamic insurgency that has conquered a Belgium-sized swath of its northeast, forcing the military to purchase new helicopters and tanks to respond. Next month, Nigeria will hold a presidential election that looks likely to be the country's closest ever. President Goodluck Jonathan is seeking a second four-year term, trying to draw voters' attention to Nigerian economic gains: The country averaged 7% growth during his first term. But that message is being undermined by cascading oil prices, which pushed its currency, the naira, to a record low 190 to the dollar on Monday. It is against that backdrop that the country's finance ministry has been trying to build a budget that reflects a realistic assumption on where crude prices will stand. Nigeria's 2015 budget initially assumed oil would trade at $78 per barrel, a projection the finance ministry cut to $73 in November and then again to $65 in December. On Tuesday, prices for Brent crude settled just below $48 per barrel: "We don't know where the bottom is," said Ms. Okonjo-Iweala "Should it be 50? Should it be 45? Should it be 40? Is the bottom 30? I have no idea." The country, she added, will hold off on issuing a new budget with a revised oil price benchmark until crude prices stabilize. Also Tuesday, Central Bank of Nigeria Governor Godwin Emefiele said the key interest rate would remain at 13%, its level since a 100-basis point increase in November. Aside from the recent rate increase, the bank has tested less conventional measures to stem the local currency's slide. In November the bank curtailed U.S. dollar sales and . But defending the naira's peg against the dollar has been costly. The bank's foreign currency holdings have fallen to $34.5 billion from nearly $40 billion in July. The bank also lowered its target trading band for the naira in November -- a sign that the central bank wasn't able to defend Nigeria's currency at stronger levels. When those measures and the rate increase didn't check the naira's decline, the bank . It barred currency traders in December from after-hours trading and placing bets at the close of a trading session. Mr. Emefiele on Tuesday defended the extraordinary measures the bank is using to try to stem the naira's slide. "We will continue to provide liquidity for legitimate transactions, and people should stop speculative attack[s] on the Nigerian currency," he told reporters in Nigeria's capital. Mr. Emefiele, Nigeria's top banker since June, is seen as an ally of President Goodluck Jonathan. The president's re-election bid--set for Feb. 14--has been hampered by market tumult and the insurgency of militant Islamist group Boko Haram that has expanded its grip on Nigeria's impoverished northeast. Interest rate increases are often politically unpopular because they can damp economic growth. But economists cautioned that those moves can't compensate for Nigeria's core challenge: diversifying Africa's top economy away from oil revenues that fund more than 70% of the public budget. The Nigerian government's heavy reliance on revenues from oil production are raising concerns that the steep drop in prices could crimp its ability to pay for overdue infrastructure projects and fight the intensifying Islamist insurgency. In December officials acknowledged they would need to rein in spending by lowering the anticipated average oil price on which the country bases its budget to $65 from $75. "Irrespective of the monetary policy response, the economy will be subject to painful adjustments," said Nema Ramkhelawan-Bhana, an analyst at Rand Merchant Bank in Johannesburg. In the short term, the bank appears intent on allowing the fresh capital control measures time to shore up the naira, according to Ayo Salami, chief investment officer of the Africa Fund at Duet Asset Management, which manages more than $5.5 billion. "It is understandable that the bank now wants to evaluate the impact of what they have already done," he said. Still, the naira has continued to drop, hitting a fresh all-time low near 190 to the U.S. dollar on Monday. As oil prices have halved since the middle of 2014, the naira has surrendered more than 18% of its value against the dollar. The naira didn't shift much after the bank's announcement on Tuesday, partly thanks to the bank's efforts to reduce its liquidity. Josie Cox in London contributed to this article. Write to Patrick McGroarty at and Drew Hinshaw at Credit: Patrick McGroarty, Drew Hinshaw, Gbenga Akingbule
Subject: Budgets; Interest rates; Energy economics; Rebellions; Crude oil prices; State elections
Location: Africa Nigeria
People: Jonathan, Goodluck
Company / organization: Name: Boko Haram; NAICS: 813940
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646780560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646780560?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further repr oduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Analysis; Coming to Terms With the New Oil Reality; The Effect of the Sharp Drop in Oil Prices Will Last Years Past the Moment Prices Have Recovered
Author: Steinhauser, Gabriele
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
"The expectations that have governed the world for over a decade have been overturned by a new reality," says Daniel Yergin, vice chairman of energy research firm IHS and author of several books on the global oil market. Since the beginning of the year, investment banks have sharply lowered their price forecasts, with some seeing oil averaging around $50 a barrel this year, and staying close to $60 in 2016.
Full text: The sharp drop in oil prices has already roiled markets and pummeled energy companies. But its impact on oil production and climate policies is likely to last years past the moment when prices have recovered. The shale boom in the U.S., where oil production has nearly doubled over the past 10 years, and the refusal of the Organization of the Petroleum Exporting Countries to cut output, have contributed to a glut on global energy markets. At the same time, low growth in Europe and emerging markets is holding down demand, upending long-held assumptions of scarcity and ever-increasing prices. "The expectations that have governed the world for over a decade have been overturned by a new reality," says Daniel Yergin, vice chairman of energy research firm IHS and author of several books on the global oil market. Since the beginning of the year, investment banks have sharply lowered their price forecasts, with some seeing oil averaging around $50 a barrel this year, and staying close to $60 in 2016. That is about half of where prices stood last summer, squeezing margins across the oil sector. Energy producers, service providers and suppliers, such as steel companies, have started eliminating jobs and delaying projects. Just last week Royal Dutch Shell , and BP PLC laid off 300 workers at its North Sea hub in Aberdeen, Scotland. Analysts widely expect oil companies' fourth-quarter earnings to be as much as one-fifth lower from a year earlier. "At the current price, every company is cutting back and will be cutting back," says Mr. Yergin, who believes oil prices could rebalance "halfway between $50 and $100" in the second half of this year. Yet, although some companies have already delayed or even abandoned costly projects, the impact on supply will take much longer to materialize. High upfront investments in the most expensive developments, such as oil sands or deep-water rigs, mean it makes little sense for these producers to cut output just yet. a barrel, while underground mines there could break even at $35. Supply reductions big enough to push prices back to previous levels may not appear for several years, when projects that were supposed to be developed now would have come online. Meanwhile, governments in oil-producing countries--from the U.K. to Brazil and West Africa--will find themselves under pressure to create more favorable investment conditions as companies try to cut costs and preserve profits. The "new reality" in the global energy market is reducing revenues for oil-producing countries and lowering energy bills for importers. But it is affecting governments in other ways, as well. Negotiations on new measures to contain climate change are meant to culminate in a global accord at a Paris summit in December, which will aim to keep the average global surface temperature from rising more than two degrees Celsius above pre-industrial levels. Low oil prices, however, could reduce incentives for governments, their citizens and corporations, to invest in renewable-energy sources and improve energy efficiency--steps needed to implement any climate-change deal. In Europe, the oil glut also threatens to challenge governments' central argument for moving away from fossil fuels: that oil is an unreliable energy source, where supplies are limited and dependent on unstable countries. "Both elements of the narrative have turned out wrong," says Georg Zachmann, a research fellow at Brussels-based economics think tank Bruegel. Instead, governments would have done better to promote the fight against climate change--and its environmental impacts--as an end in itself, says Mr. Zachmann. This miscalculation could weaken ambitions in Europe, especially if other countries fail to commit to aggressive steps in Paris. Low prices could also help contain climate change and encourage new policies. A slowdown in new oil exploration limits future carbon-dioxide emissions, which is significant given the United Nations' assessment that using up already-known fossil-fuel reserves would push temperatures past the two-degree threshold, says David Turnbull, campaigns director at Oil Change International, a U.S.-based advocacy group. Meanwhile, with reduced fears about shortages, public scrutiny of certain projects, including the Keystone XL pipeline from Canada to the U.S., has increased. Some countries, such as India and Indonesia, have moved to cut or reduce fuel subsidies--which have artificially held up demand--while in the U.S. a growing number of politicians and economists are calling for higher gasoline taxes and a pricing system for carbon-dioxide emissions. "When the oil price is so low...you have an opportunity to make some serious changes," says Mr. Turnbull. Write to Gabriele Steinhauser at Credit: By Gabriele Steinhauser
Subject: Energy industry; Petroleum industry; Energy policy; Prices; Environmental policy; Petroleum production
Location: United States--US Europe
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economi cs
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646786601
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646786601?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Afren Reviewing Cost Base, Capital Structure; Oil and Gas Company in Discussions With Lenders to Amend Existing Facilities
Author: Razak Musah Baba
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Jan 2015: n/a.
Abstract:
The U.K.-listed oil and gas company said, as part of that process, it is in discussions with its lenders regarding amendments to its existing facilities, in addition to seeking a deferral of a $50 million amortization payment due at the end of January.
Full text: Afren PLC on Tuesday confirmed that it has been reviewing with its advisers its capital structure, liquidity and funding requirements. The U.K.-listed oil and gas company said, as part of that process, it is in discussions with its lenders regarding amendments to its existing facilities, in addition to seeking a deferral of a $50 million amortization payment due at the end of January. "Given the rapid decline in the oil price the company is also reviewing its cost base and capital expenditure plans for 2015," the company said. Afren also said it continues to be in discussions with SEPLAT Petroleum Development Co. PLC regarding a possible combination with Afren. Afren on Monday said, to allow the companies to continue their discussions, the deadline for had been extended to Jan. 30 from Jan. 19. Write to Razak Musah Baba at Credit: By Razak Musah Baba
Subject: Capital expenditures; Petroleum industry
Location: United Kingdom--UK
Company / organization: Name: Afren PLC; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646786663
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Apache CEO Steven Farris Retires; Houston Oil Company Names John J. Christmann IV Successor
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
In recent months, Apache has increased its focus on the North America region, as activist investor Jana Partners LLC pushes the company to consider a possible sale or spinoff of its international operations to focus on shale drilling in the U.S. The executive change comes a week after Houston-based Apache said it was , or about 250 employees.
Full text: Apache Corp. Chief Executive Steven Farris is retiring, effective immediately, as the oil company plans to downsize in response to plunging fuel prices. Mr. Farris is succeeded by John J. Christmann IV, 48 years old, who is Apache's executive vice president and chief operating officer for North America. Mr. Christmann has been appointed to the board. In recent months, Apache has increased its focus on the North America region, as activist investor Jana Partners LLC pushes the company to consider a possible sale or spinoff of its international operations to focus on shale drilling in the U.S. The executive change comes a week after Houston-based Apache said it was , or about 250 employees. Apache, one of the biggest energy companies in the U.S., pumps oil and gas in places from Texas to Egypt and employs about 5,000 workers around the globe. It swung to a loss in its most recently ended quarter on write-downs of its oil and gas assets resulting primarily from lower commodities prices. Last month, Apache sold its stakes in two international liquefied-natural-gas projects to Woodside Petroleum Ltd. for $2.75 billion, as part of its efforts to exit international businesses. "After more than 25 years with the company and 14 years as CEO, it is time to hand over the reins to a new generation of leaders," said Mr. Farris, 66. He will continue as nonexecutive chairman until May 1. Director John Lowe, 54, will succeed Mr. Farris as nonexecutive chairman. Under his tenure, full-year sales grew from about $4.2 billion in 2003 to $16.42 billion in 2013. Mr. Farris joined Apache in 1988 and worked as senior vice president and chief operating officer before becoming CEO in 2002. Mr. Christmann has been with Apache for 18 years and has served as vice president of business development and vice president of the Permian Region, a key production area in Texas. As vice president of Permian, he established Apache's Midland office and oversaw a doubling of production. Shares of Apache fell 3% to $60.16 Tuesday on the New York Stock Exchange and are down about 30% from a year ago. Write to Angela Chen at Credit: By Angela Chen
Subject: Appointments & personnel changes; Chief executive officers; Natural gas; Energy industry
Location: United States--US Egypt Texas North America
Company / organization: Name: Woodside Petroleum Ltd; NAICS: 211111; Name: New York Stock Exchange--NYSE; NAICS: 523210; Name: Jana Partners LLC; NAICS: 523930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646873490
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646873490?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Plug Pulled on Venezuela's Sale of Citgo; Oil Refiner Plans Debt Sale to Raise Funds for Cash-Strapped Country
Author: Dezember, Ryan; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract: None available.
Full text: A sale process for Venezuela's Citgo Petroleum Corp. has been called off, and the U.S.-based oil refiner instead plans a debt sale that would raise funds for the cash-strapped country. The auction was scrapped in recent days after several suitors submitted bids in early December, people familiar with the matter said. Citgo is now planning to raise $2.5 billion in debt instead, one of the people said. The sales process could be restarted later. Corporate auctions are rare in the immediate aftermath of such recapitalization deals, however, and the added debt could make the company less attractive to suitors too. Citgo, which operates three U.S. oil refineries and related assets from its Houston headquarters, was expected to fetch between $8 billion and $11 billion should it have been sold, analysts and people close to the sales process have said. But running a successful auction of a state-owned enterprise amid plunging oil prices was an uncertain prospect to begin with, and such deals usually take many months to be inked and closed. The debt sale, on the other hand, could serve as a more immediate source of cash for the country. The roughly 50% plunge in oil prices since this summer has pressured oil-rich Venezuela, which had already been facing cash-flow problems that have forced it to cut back on imports and caused shortages of some basic goods. Venezuela needs to sell oil at $117.50 a barrel to balance its budget, one of the highest prices among the world's petrostates, according to analysts at Deutsche Bank. Citgo is owned by Petróleos de Venezuela SA, or PdVSA, the state-owned oil company that is the country's main source of cash. Considered a crown jewel of PdVSA, Citgo had revenue of $42.3 billion and earnings before interest, taxes, depreciation and amortization--a cash-flow measure known as Ebitda--of $1.8 billion in 2013, according to July debt-offering documents. It owns refineries in Lake Charles, La., Corpus Christi, Texas, and Lemont, Ill., which have a combined processing capacity of about 760,000 barrels a day. The company also owns valuable networks of pipelines and fuel-distribution terminals in the eastern U.S. There are about 5,600 Citgo-branded gas stations in the U.S. that are independently owned and operated and weren't part of the sales process. Citgo has tapped Deutsche Bank to sell the new debt through a term loan and high-yield bonds that would allow the refiner to pay a dividend to its owners, according to the person familiar with the matter. Such a payout would be the company's second in the last year after Citgo in July sold $650 million of bonds in part to pay its owner a $300 million dividend. The proposed new debt deals were earlier reported by S&P Capital IQ LCD, a data provider. The scuttling of the auction ends a that was fraught with uncertainty over Venezuela's commitment and ability to sell the refiner at an acceptable price. Investment bank Lazard was enlisted last year to shop Citgo, which had flagged a potential deal in a bond disclosure in July. The auction continued in December despite signals from Caracas that cast doubt on its intentions. In October, for instance, Finance Minister Rodolfo Marco told a Venezuelan newspaper that, "the sale of Citgo is discarded and the president already asserted it." The auction drew interest from U.S. refiners Marathon Petroleum Corp., HollyFrontier Corp. and Valero Energy Corp., as well as private-equity firms TPG and Riverstone Holdings LLC., which teamed up to bid, according to people familiar with the process. U.S. refiners have flourished in recent years as abundant crude flowed from domestic shale formations. The recent dive in oil prices has had a mixed impact on them. While fuel demand is expected to increase from drivers taking advantage of the lowest gasoline prices in years, U.S. and international oil prices have moved closer together, which has chipped away at U.S. refiners' advantage over foreign competitors. Kejal Vyas contributed to this article. Write to Ryan Dezember at and Alison Sider at Credit: By Ryan Dezember and Alison Sider
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646874 072
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646874072?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Gain Ahead of Inventory Data, ECB Meeting; U.S. Oil Stockpiles Rise by 5.7 Million Barrels, American Petroleum Institute Says
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
Analysts expect the report to show that crude supplies rose by 2.7 million barrels in the week ended Jan. 16, while gasoline inventories rose by 800,000 barrels and stocks of distillates, including diesel fuel and heating oil, rose by 300,000 barrels, according to a Wall Street Journal survey.
Full text: Oil prices gained Wednesday but held near more-than-five-year lows as traders assessed the continued oversupply in the market. Prices have plunged more than 55% since mid-June as production has grown faster than expected while demand has remained moderate. , sending prices tumbling. Saudi Arabia reaffirmed that stance Wednesday. State-run Saudi oil company Saudi Aramco's chief executive said at the World Economic Forum in Davos, Switzerland, that he expects the oil market to eventually rebalance itself. At the same event, OPEC's secretary-general defended the group's decision not to cut output, adding that "the price will rebound and we will go back to normal very soon." The statements were mixed, said Oleg Girko, senior broker at BBSP Partners SAS. "They came out saying that they're not helping with the prices, but they think it's not going to go much lower," he said. "I think there's still some room to go down. [...] Supply is abundant, demand is quite sluggish and weak." Market participants also positioned ahead of U.S. inventory data and the European Central Bank's policy meeting Thursday. U.S. oil for March delivery settled up $1.31, or 2.8%, at $47.78 a barrel on the New York Mercantile Exchange. Brent crude, the global oil benchmark, rose $1.04, or 2.2%, to $49.03 a barrel on London's ICE Futures exchange. "The market's catching its breath," said Gene McGillian, analyst at Tradition Energy. "The market seems to need a continual slew of bad news, or bearish news, to continue to drive it lower, and we really didn't see any of that coming in today." U.S. oil stockpiles are expected to post another week of gains, which could bring total crude-oil and fuel supplies to a record high. The Energy Information Administration is scheduled to release the data on Thursday, one day later than usual, due to Monday's federal holiday. Analysts expect the report to show that crude supplies rose by 2.7 million barrels in the week ended Jan. 16, while gasoline inventories rose by 800,000 barrels and stocks of distillates, including diesel fuel and heating oil, rose by 300,000 barrels, according to a Wall Street Journal survey. The American Petroleum Institute, an industry group, said late Wednesday that its own data for the same week showed that crude supplies rose by 5.7 million barrels, while gasoline stocks gained 2.1 million barrels and distillate inventories fell by 1.8 million barrels, according to industry sources. "The abundant supply picture is showing no signs of abating," said George Johnson, executive adviser for oil and gas at KPMG. "This will continue to heap pressure on oil prices until we start seeing some significant production cutbacks." Market participants are also focusing on the ECB meeting Thursday. , posing a headwind to oil-price gains. Oil is priced in dollars, so a stronger dollar makes oil more expensive for buyers using foreign currencies. The monthslong drop in oil prices has roiled equity and currency markets and hit the economies of oil-producing nations. and lowered its growth forecast, citing the slide in oil prices. Canada is the world's fifth-largest oil producer. The country's leading oil and gas producers' group cut its forecast for Western Canadian production growth in 2015 due to lower capital spending. February gasoline futures rose 1.27 cents, or 1%, to $1.3255 a gallon. Diesel futures rose 1.98 cents, or 1.2%, to $1.6464 a gallon. Sarah Kent, Georgi Kantchev, Nirmala Menon and Chester Dawson contributed to this article. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; American dollar; Inventory; Futures
Location: Switzerland United States--US Saudi Arabia
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646915266
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1646915266?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Airbus Joint Venture Expects Slowdown in Sales of Turbopropeller Planes; ATR Says Lower Oil Price May Erode Demand for Fuel-Efficient Models
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
PARIS--The ATR plane-making joint venture between Airbus Group NV and Italy's Finmeccanica SpA expects to the pace of orders for its turbopropeller planes to drop this year as airlines slow fleet decisions amid uncertainty over future fuel costs.
Full text: PARIS--The ATR plane-making joint venture between Airbus Group NV and Italy's Finmeccanica SpA expects to the pace of orders for its turbopropeller planes to drop this year as airlines slow fleet decisions amid uncertainty over future fuel costs. Avions de Transport Regional, as ATR is formally called, reached $1.8 billion in sales last year topping the $1.62 billion of the year before, the Toulouse, France-based company said in a statement on Wednesday. ATR's turboprop planes that seat fewer than 90 passengers are more fuel efficient than regional jets, which has driven a resurgence in demand in recent years amid high fuel costs. Fuel represents about 30% of airline costs. That benefit has eroded after oil costs have fallen by more than 50% since June with some airlines preferring to use . "It may impact the industry. It may slow down some orders," Chief Executive Patrick de Castelbajac told reporters. Boeing Co., the world's largest commercial airplane maker, and No. 2 Airbus have argued that lower fuel costs for their most fuel-efficient jets. Investors worry, though, that , which have commanded a premium, may weaken. "I am not overly concerned," Mr. Castelbajac said. Planes are bought for 20 years and fuel prices will likely rebound, he said. Political turmoil in Russia also has affected business amid sanctions and a slump in travel demand in the region, he said. Mr. de Castelbajac said order intake this year should roughly match deliveries. Production should reach more than 90 planes, a high for the business, and ramp up further to more than 100 next year. "That is something we need to do," Mr. de Castelbajac said. Deliveries have already risen by 60% over the past five years. ATR sales reached $1.8 billion last year topping 2013's figure of $1.62 billion, the Toulouse, France-based company said. The company expects revenue to reach $2 billion this year. Demand last year was dominated by the larger ATR 72-600, with 133 firm orders last year, with the smaller ATR 42-600 clinching deals for 27 planes. The company's backlog of planes yet to be delivered grew to 280 turboprops at the end of last year, with a list price value of $6.8 billion. Counting options the backlog exceeded 400 planes, Mr. de Castelbajac said. ATR continues to study development of a new, 90-seat turboprop, the chief executive said. The program, which has been in progress for years, remains stuck on the drawing board, with Airbus not ready to invest in a new plane. Mr. de Castelbajac said the company will work on improving its current planes, including boosting seat count to 78 passengers on the ATR 72. Write to Robert Wall at Credit: By Robert Wall
Subject: Airlines; Airline industry; Air travel
Location: Italy
Company / organization: Name: Avions de Transport Regional; NAICS: 336411; Name: Finmeccanica SpA; NAICS: 336411; Name: Boeing Co; NAICS: 336411, 336413, 336414; Name: Airbus Group NV; NAICS: 336411, 336412, 336413
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646967203
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/16469672 03?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Russia to Cut 2015 Budget by Around 10% Following Decline in Oil Price; Government Will Use Reserves to Cover Expected Budget Shortfall, Deputy Premier Says at Davos
Author: Cowley, Matthew
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
Speaking on a panel organized by The Wall Street Journal at the World Economic Forum in Davos, Mr. Dvorkovich said the government is less susceptible to swings in oil prices than before because of the reserves that have been built up in recent years.
Full text: Russia's government will cut its budget by around 10% this year, and maybe by as much as 15%, as a result of the , and it will also use reserves to cover some of the expected budget shortfall, Deputy Prime Minister Arkady Dvorkovich said Wednesday. Speaking on a panel organized by The Wall Street Journal at the World Economic Forum in Davos, Mr. Dvorkovich said the government is less susceptible to swings in oil prices than before because of the reserves that have been built up in recent years. "A few years ago we decided to establish a macro framework where dependence on oil price is lower than before," Mr. Dvorkovich said. This year was an exception as "no one expected prices to go down so sharply," he said. In the first quarter, the government decided that banking stability was a key priority, which is why some of the funds from the reserves were put into recapitalizing the banking system, he said. The government will "use some of the reserves for fiscal" matters as well, he said. The deputy prime minister also noted that stability in the oil market is key to providing some . The ruble lost around 41% of its value against the dollar in 2014, hit by Western sanctions, capital flight and falling oil prices. Write to Matthew Cowley at Credit: By Matthew Cowley
Subject: Petroleum industry; Energy policy; Prices; Oil reserves
Location: Russia
Company / organization: Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1646989902
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Stree t Journal
Bank of Canada Shocks With Rate Cut "Insurance" Against Oil Slump; First Rate Cut Since the Recession
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
OTTAWA--Canada's central bank delivered a shock interest-rate cut Wednesday, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth.
Full text: OTTAWA--Canada's central bank delivered a shock interest-rate cut Wednesday, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth. The Bank of Canada, which had been widely expected to hold rates steady before raising them later in the year or in early 2016, cut its benchmark overnight rate by a quarter percentage point to 0.75%--the first cut to the rate since April 2009, when the economy was mired in recession. Sliding oil prices , which the central bank said it expects will recover to around $60 in the medium term, will erode growth and inflation for Canada, it said in a statement announcing the interest-rate cut. It lowered its growth forecast for the first half of 2015 to 1.5%, and to 2.1% for the full year from 2.4%. The bank offered no signals ahead of time that it might change course on rates, and the news was greeted with shock in Canada, where some exporters cheered the accompanying fall in the currency and the cost of borrowing money. But that potential fall in debt costs will likely stoke fears that the Canadian consumer, already the most overleveraged among major economies, could borrow more, a risk the bank highlighted on Wednesday. Canada's central bank made the move as the European Central Bank is readying a proposal for a quantitative-easing program of [euro]50 billion (US$58 billion) a month aimed at stimulating growth. Slower global growth and demand for energy, especially in emerging markets like China, is weighing heavily on crude prices because production is surging, especially in North America. While other economies, including that of the U.S., will get a boost from lower energy prices that may stimulate consumers to spend more, the slump will be "unambiguously negative" for Canada, the Bank of Canada said. Unlike the U.S., Canada is a net exporter of oil, with energy extraction and related industries accounting for a much bigger share of the economy. Around 11% of Canada's GDP stems from direct and indirect energy activities, according to government data. The Canadian central bank's rate cut is a marked policy divergence from the U.S. Federal Reserve, which is widely expected to start raising rates this year. Other central banks that have recently cut rates include those of Denmark, Egypt, India, Romania and Turkey. Bank of Canada Governor Stephen Poloz acknowledged at an Ottawa news conference that the move had surprised markets, but suggested that wasn't a factor in the decision. "The market consequences will be what they are," he said. Last week, Timothy Lane, the bank's deputy governor, after delivering a speech titled "Oil Prices and their Impact on the Economy," told a trade group in Madison, Wis., that there wouldn't be any "drastic" changes in the Bank of Canada's policy outlook. The Canadian dollar fell sharply Wednesday, dropping 1.8% from late Tuesday, moving to 81.29 U.S. cents in late trading from 82.55 U.S. cents Tuesday, according to data provider CQG. Canada's main stock benchmark gained on the rate cut, but a global bump in oil prices accounted for the biggest part of the index gain, with the S&P/TSX closing up 1.8% and the heavily weighted energy group rising 3.2%, following higher crude prices in New York trading. Interest-rate sensitive financial and industrial groups, which may benefit from a boost in domestic and export economic activity resulting from rate cut, also gained. Many here welcomed the drop in the Canadian dollar. For Canada's large mining industry, the dollar's fall helps to offset lower commodities prices, given those prices are denominated in U.S. dollars. "Absolutely, that is good news for us," said George Ogilvie, the CEO of Ontario-based miner Kirkland Lake Gold Inc. At current levels, the fall in the Canadia dollare against the U.S. dollar will add some $31 million this year to Kirkland's balance sheet. But while rate cuts are typically good news for indebted companies, the heavily leveraged Kirkland Lake isn't taking too much comfort from Wednesday's news. "What we've seen in the past is sometimes the bank makes a rate cut but the private and commercial lenders don't pass them on to general public" and companies, Mr. Ogilvie said. In the manufacturing hubs of Quebec and Ontario, a weaker dollar has been viewed as a support for exports, which have recently started to regain some of the ground lost during the recession and its aftermath. But a weaker currency amounts to a double-edged sword for some companies, since so much of their input costs are in U.S. dollars. "When our dollar falls, the cost of our inputs increases," said Trevor Welch, president and general manager of Textile Manufacturing Co. Ltd., a Toronto-based producer of braided goods such as skate laces and cords for clothing such as hoodies. "The upside is that when it comes time to sell our goods internationally, we are more competitive--at least in the U.S. market," Mr. Welch said. That market accounts for 10% to 25% of the company's sales, depending on the year, he estimates. Textile Manufacturing, which will mark its 100th anniversary next month, is actively looking for new U.S. customers. "We're in the game again," said Mr. Welch, in reference to the weaker Canadian dollar. Still, there is "considerable uncertainty about the speed" of recovery in non-energy exports, the central bank said in its statement. And those gains are unlikely to outweigh the drag of lower oil prices, especially on business investment, which has been led by the resource-rich countries. Reaction in Calgary, the hub of the country's energy industry, was muted since the rate cut isn't expected to reverse the direction of global oil prices. "The feeling in the corporate community overall is that it's not going to do a heck of a lot. The key challenge is a lower global oil price. The interest rate cut won't alleviate the pain created by lower oil prices," Adam Legge, president of the Calgary Chamber of Commerce, said in an interview. In a review of its industry forecasts, the Canadian Association of Petroleum Producers, an industry group, estimates a 33% decline in capital spending in 2015 and a projected slowdown in growth of oil production from its prior forecast of about 65,000 barrels a day in 2015 and 120,000 barrels a day in 2016. According to the review, capital investment in Western Canada, including the oil sands, will total $46 billion in 2015, down 33% from $69 billion invested in 2014. The new 2015 forecast for total Western Canadian oil production is 3.6 million barrels a day, about 150,000 barrels a day higher than total 2014 production of 3.5 million barrels a day, with a similar rate of growth expected in 2016. Alistair MacDonald, Rita Trichur and Chester Dawson contributed to this article. Write to Nirmala Menon at nirmala.menon@wsj.com Credit: By Nirmala Menon
Subject: Central banks; Canadian dollar; Monetary policy; American dollar; Prices; Commercial credit; Recessions; Federal Reserve monetary policy; Economic growth
Location: United States--US Canada
People: Poloz, Stephen
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: Group of Seven; NAICS: 926110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647057024
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647057024?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canadian Dollar Tumbles After Bank of Canada Cuts Rates; Bank's Policy Action Intended to Provide Insurance Against Risks of Lower Oil Prices
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
The unexpected rate cut created a great deal of volatility across all Canadian financial assets, said Blake Jespersen, managing director of foreign exchange at BMO Capital Markets.
Full text: OTTAWA--The Canadian dollar slumped to its lowest point in over five years after the Bank of Canada's Wednesday, a decision that saw the greenback breach two key psychological barriers and come within a hair's breadth of a third. The U.S. dollar pieced the C$1.2100 and C$1.2200 levels, spiking to an intraday high of C$1.2395, and was most recently at C$1.2334, up sharply from C$1.2114 at Tuesday's close, according to data provider CQG. Those are levels unseen since April 2009, when the economy was mired in recession. The Bank of Canada lowered its benchmark overnight rate by a quarter point to 0.75%, its first reduction since April 2009, bringing an end its longest rate pause in almost 60 years. The central bank said it took action as "insurance" against the potential economic toll of , a key Canadian export, and became the first Group of Seven monetary authority to take such action in response to the oil plunge. All major forecasters had predicted the central bank would keep . The predominant view was that its next policy move would be to raise rather than cut rates. The unexpected rate cut created a great deal of volatility across all Canadian financial assets, said Blake Jespersen, managing director of foreign exchange at BMO Capital Markets. "It was a very dramatic and surprising move by the Bank of Canada," he said. "Now everybody is readjusting forecasts, both for interest rates and the currency in Canada." There is "definitely a risk" that the central bank "could ease further" if oil prices stay below the $60 a barrel mark it used in making its latest economic projections, said Bank of America Merrill Lynch economist Emanuella Enenajor. BMO's Mr. Jespersen said the Canadian dollar seems to have downward bias in light of the oil plunge and the potential for more rate cuts. "We could easily see C$1.2500 and potentially C$1.3000 in this environment," he said. The European Central Bank's is the next major event for financial markets. After the shocks from the Bank of Canada, and from the Swiss National Bank, which last week removed its currency cap, "I'm not sure how much more stress these markets can take," Mr. Jespersen said. Write to Don Curren at Credit: By Nirmala Menon
Subject: Central banks; Canadian dollar; Monetary policy; Recessions
Location: United States--US
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: Group of Seven; NAICS: 926110; Name: Swiss National Bank; NAICS: 521110; Name: European Central Bank; NAICS: 521110; Name: Bank of America Merrill Lynch; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647057042
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647057042?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Middle East Oil Producers Could See $300 Billion Export Loss; IMF Says Large Cash Reserves Are Helping the Countries Absorb Impact of Falling Oil Price
Author: Talley, Ian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
[...]the impact of the lower oil price on overall economic activity and growth in these countries is going to be much smaller than the impact on their budgets or on their balance of payments," he said.
Full text: Oil export losses for major Middle East crude producers are likely to total $300 billion this year but large cash buffers are allowing the countries to absorb most of the impact of falling oil on their economies, the International Monetary Fund said Wednesday. Those cash reserves are why the IMF only marginally cut its economic outlook for Saudi Arabia, Qatar and other Gulf Cooperation Council countries in its latest report on the region. The fund forecast the regional economy to expand by 3.4% this year, 1.1 percentage point lower than it expected last October. Crude exporters in the region rely on the oil income to fund a major share of their economies and had assumed much higher oil prices in their government budgets. The more than 50% fall in oil prices translates into export losses worth more than one-fifth of their gross domestic products. But those countries had built up substantial buffers that they are now using to offset their export losses and keep cash flowing into their economies. "While there will indeed be some reduction in terms of government spending this year compared to what they were planning, it will be done in a measured way," said Masood Ahmed, head of the IMF's Middle East and Central Asia Department. "As a result, the impact of the lower oil price on overall economic activity and growth in these countries is going to be much smaller than the impact on their budgets or on their balance of payments," he said. Still, the countries will need to cut spending and overhaul their budgets to protect against long-term damage to their economies. The fall in prices also increases the urgency of governments to fuel greater diversity in their economies, Mr. Ahmed said. Write to Ian Talley at Credit: By Ian Talley
Subject: Budgets; Petroleum industry; Prices
Location: Qatar Saudi Arabia Middle East
Company / organization: Name: Gulf Cooperation Council; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647057557
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647057557?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Oil Producer Group Trims 2015 Growth Forecast; Western Canadian Output Pegged at 3.6 Million Barrels a Day
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
CALGARY, Alberta--Canada's leading oil and gas producers' group on Wednesday trimmed its annual growth forecast for Western Canadian output to 3.6 million barrels of oil a day, citing the rapid drop in global prices for crude.
Full text: CALGARY, Alberta--Canada's leading oil and gas producers' group on Wednesday trimmed its annual growth forecast for Western Canadian output to 3.6 million barrels of oil a day, citing the rapid drop in global prices for crude. The Canadian Association of Petroleum Producers new estimate is down from its previous target but up from production levels in 2014. It also projected a 33% decline in capital spending to 46 billion Canadian dollars (US$37.4 billion) as companies put the brakes on drilling wells and developing new oil-sands projects. "No question, the effects on the industry are sharp," CAPP President Tim McMillian said in a statement. "These are challenging times and Canadians across the country will see or feel the impacts," he said. Crude-oil prices have fallen more than 55% from a peak in June due to surging supply and weak demand. In trading Wednesday on the New York Mercantile Exchange, U.S. oil futures for March delivery rose 75 cents, or 1.6%, to $47.22 a barrel. Western Canadian oil production in 2015 will continue to grow at about 150,000 barrels per day from last year--about 65,000 barrels a day fewer than previously forecast--with a similar gain expected in 2016, the industry lobby said, a result of investment in oil-sands projects that will come online over the next couple of years. The country's oil and gas industry is centered in Western Canada, mostly in the province of Alberta, where the oil sands are located. CAPP now pegs the output from Canada's oil sands at 2.3 million barrels per day, up from 2.1 million barrels per day in 2014. It expects conventional oil production in Western Canada to be flat at 1.3 million barrels a day. Spending on conventional oil and gas will fall to C$25 billion from C$33 billion last year and expenditure on oil-sands projects will decline to C$21 billion from C$36 billion in 2014, CAPP said. The total number of wells drilled in Western Canada is projected to drop 30% to 7,350, it said. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Petroleum industry; Oil reserves; Capital expenditures; Petroleum production; Oil sands
Location: United States--US Western Canada
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647115463
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647115463?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Falling Oil Prices Worry Bank Investors; Questions About Loans to Energy Firms Dominate Conversation During Earnings Blitz
Author: Steinberg, Julie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
Citigroup Inc. and Bank of America Corp. have emphasized that loans to energy companies make up only a small portion of their commercial credit, and are confined mostly to large, multinational companies with solid credit ratings, many of them based in North America or the U.K. Bank of America said in filings that about 6% of its commercial-credit exposure is to energy companies.
Full text: The prolonged slide in oil prices is increasingly scaring bank investors and worrying analysts, even as executives caution it is too early to gauge its impact. The topic has dominated the conversation during the fourth-quarter earnings blitz for the financial industry, especially for regional banks that typically lend more to small and midsize energy-related companies. On Comerica Inc.'s earnings call last week, roughly three-quarters of the questions from analysts centered on energy. Such loans compose about 7% of the bank's portfolio, or $3.5 billion. In a report Tuesday, analysts at Standard & Poor's said they are reviewing banks "with large concentrations in energy-related loans" and said that falling oil prices could result in "negative rating actions" for those banks. At least two banks say they have built up reserves to cushion the potential blow from energy losses. Meanwhile, regional banks' stocks are taking a hit: Shares are down more than 20% on average since June 20, 2014--the date of oil's most recent peak--at 13 banks whose energy loans comprised 5% or more of the bank's overall loan portfolio during the third quarter, according to FactSet Research Systems and data provided by Keefe, Bruyette & Woods. The list includes banks located in Texas, Oklahoma and Louisiana. Investors are "panicking," said Brady Gailey, an analyst with Keefe, Bruyette & Woods, adding that he and other bank analysts are increasingly hearing from jittery investors about how much stock to hang onto. His view: "It's going to take a while for losses [at the banks] to flesh out, but it's something we're very concerned about." Plummeting oil prices hold a special fear for bankers who remember the mid-1980s, when oil prices dropped more than 50%. In Texas alone, about 700 banks and thrifts failed between 1986 and 1990. Many bank executives and regulators say a number of measures have been put in place to protect against such widespread losses. Over the past few days, bank executives on earnings calls have sought to assuage investors about the health of their loan portfolios. On Wednesday, Fifth Third Bancorp said it has $2 billion in energy-related loans that comprise about 2% of the bank's total loans. Kevin Kabat, chief executive at the Cincinnati, Ohio-based regional lender, said in an interview that he believes the bank is "very well positioned." "While there will be stress within that portfolio, nothing is overly concerning at this point," he said. As part of lending agreements, banks often require energy borrowers to hedge production to guarantee a minimum price for the oil and gas they produce as a means of ensuring their loans will be repaid. The vast majority of Fifth Third's energy customers are hedged through 2015, executives said. At Dallas-based Comerica, Chief Financial Officer Karen Parkhill said on an earnings call that while more than 95% of the loans are secured, Comerica in the fourth quarter increased its reserve against its energy portfolio by 60 basis points. She said the bank's customers are "generally well-hedged." SunTrust Banks Inc., which also reported earnings last week, has built a reserve of funds within its wholesale banking sector "to address uncertainty in the energy sector," Chief Financial Officer Aleem Gillani said last week. On Tuesday, Regions Financial Corp. said energy-related loans comprised 4.3% of its total loans outstanding as of Dec. 31, or $3.4 billion. The Birmingham, Ala., bank said 41% of its clients were hedged through 2015 and an additional 17% through 2016. Grayson Hall, the bank's chief executive, said on a call with analysts Tuesday that Regions isn't "seeing any adverse impacts yet" in its energy loans and that the bank hadn't felt the need to set aside a special reserve to cushion that portfolio. Jonathan Camarda, a wealth manager at Camarda Wealth Advisors, a firm with about $230 million in assets under management in Fleming Island, Fla., said he wants regional banking exposure for clients "to be a minimum" as a result of the depressed oil prices. He says some clients in recent weeks have sold positions in Regions. But he said "a greater proportion of clients has stayed in" so far. Big banks are also seeking to reassure investors. Citigroup Inc. and Bank of America Corp. have emphasized that loans to energy companies make up only a small portion of their commercial credit, and are confined mostly to large, multinational companies with solid credit ratings, many of them based in North America or the U.K. Bank of America said in filings that about 6% of its commercial-credit exposure is to energy companies. Citigroup said that about 11% of its commercial-credit exposure is to energy-related companies. At Wells Fargo & Co., Chief Financial Officer John Shrewsberry said last week on an earnings call that the bank is examining loans on a "name-by-name basis" as well as their risk ratings. J.P. Morgan Chase & Co. last week said it has some minor oil exposure, but Chief Executive James Dimon on an earnings call said oil volatility "isn't going to be a big deal" because the bank is large and diversified. Joseph Stieven, president of St. Louis-based Stieven Capital Advisors, which invests in financial institutions, said he has stepped up conversations with management teams at various banks to assess how prepared they are for a continued drop in oil prices. Mr. Stieven says he is asking about if banks plan to modify loans for their customers, how diversified their energy lending portfolios are and what prices they are "stress-testing" oil at in various scenarios. He has discussed these issues with 10 banks, he said. Many banks recalculate loans each spring and fall. Some bank analysts are more sanguine about the resilience of the industry. "There are likely to be higher oil-related losses, but the industry is better able to absorb those losses than at any other time in decades," said CLSA analyst Mike Mayo. "We're not on the cusp of a big disaster right now," he said. Christina Rexrode and Emily Glazer contributed to this article. Corrections & Amplifications Regions Financial Chief Executive Grayson Hall said the bank isn't "seeing any adverse impacts yet" in its energy loans. An earlier version of this article incorrectly attributed the remarks to finance chief David Turner. Write to Julie Steinberg at Credit: By Julie Steinberg
Subject: Banking industry; Executives; Regional banks; Prices; Investments; Loans; Bank portfolios
Company / organization: Name: Comerica Inc; NAICS: 522110, 551111; Name: Fifth Third Bancorp; NAICS: 522110, 522120, 551111; Name: FactSet Research Systems Inc; NAICS: 511140; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647193212
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647193212?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eni CEO: Companies Shouldn't Overreact to Oil's Downturn; At Davos, Descalzi Says Steep Cuts in Investment Could Lead to Price Spikes in Future
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
The slump in oil prices could cause the oil industry to cut expenditure by 10% to 15% this year, but companies should be wary of overreacting to the cyclical downturn and risking a price spike in the future, the chief executive of Italian oil company Eni SpA said Wednesday.
Full text: The slump in oil prices could cause the oil industry to cut expenditure by 10% to 15% this year, but companies should be wary of overreacting to the cyclical downturn and risking a price spike in the future, the chief executive of Italian oil company Eni SpA said Wednesday. Claudio Descalzi, speaking at the World Economic Forum in Davos, warned that steep cuts in investment now could lead to price spikes in the coming years to $150 or even $200 a barrel. Eni itself intends to reduce its costs this year, he said, though the company will press on with all its planned projects in Africa, where costs are relatively low. He didn't detail how much the company is planning to cut back. The oil industry needs a "central bank" to prevent wild swings in the market, he added, a role historically filled by the Organization of the Petroleum Exporting Countries. Amid the recent slump, OPEC has said it is no longer interested in playing that role, refusing to cut output in order to hold on to market share instead. Write to Sarah Kent at Credit: By Sarah Kent
Subject: Petroleum industry; Price increases
Location: Africa
People: Descalzi, Claudio
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647193387
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647193387?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canadian Central Banker: Rate Cut Is Insurance Policy Against Falling Oil Prices; Adds The Cut Wasn't Meant to Signal Anything 'Drastic' Was Going On
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Jan 2015: n/a.
Abstract:
[...]we decided that it was appropriate to take out some insurance against that downside risk in the form of a lower interest-rate profile," Mr. Poloz told reporters.
Full text: In a new conference, Canada's top central banker depicted his as an insurance policy against . Bank of Canada Governor Stephen Poloz said that while lower crude prices were a setback to the economy, the move wasn't meant to signal that anything "drastic" going on, nor was there a risk of deflation if he hadn't cut rates. He said that, without the lower rates, the economy's return to full capacity would have been delayed by at least a year, and inflation would be driven significantly below the central bank's 2% target, which it found "unacceptable." "Accordingly, we decided that it was appropriate to take out some insurance against that downside risk in the form of a lower interest-rate profile," Mr. Poloz told reporters. Central banks typically cut rates to stimulate the economy and boost inflation during a slowdown. But Canada has been an outlier on the inflation front. Its inflation rate is the highest in the industrialized world, and rate watchers were expecting the Bank of Canada's next move, when it came, to be a hike. Mr. Poloz's surprise cut pivoted the central bank in another direction entirely, and came even though the full impact of the oil-price drop isn't yet known. The Bank of Canada cut its benchmark overnight rate by a quarter-point to 0.75%, the first such move since April 2009, when the economy was in recession. The rate cut ended the central bank's longest stay on the sidelines in almost 60 years. Mr. Poloz acknowledged that lower rates may encourage Canadians to borrow more and add further to record household debt, but added that concern was overshadowed by projected declines in incomes and employment from the oil-price shock. Canada is a net oil exporter, with about 11% of gross domestic product stemming from direct and indirect energy activities, according to government data. The central bank chief wouldn't be drawn into saying if he would cut rates again if oil prices stay below the $60 level that the Bank of Canada used to make its latest economic projections, saying he couldn't be quite so precise. But he didn't rule out the possibility. "The world changes fast, and if it changes again, we have the ability to take out more insurance, or on the reverse, to reduce how much insurance we have taken out," he said. Write to Nirmala Menon at nirmala.menon@wsj.com<mailto:nirmala.menon@wsj.com> Write to Nirmala Menon at Credit: By Nirmala Menon
Subject: Central banks; Monetary policy; Recessions; Economic growth; Gross Domestic Product--GDP
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 21, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647204903
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647204903?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices Worry Regional-Bank Investors; Questions About Loans to Energy Firms Dominate Conversation During Earnings Blitz
Author: Steinberg, Julie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
In a report Tuesday, analysts at Standard & Poor's said they are reviewing banks "with large concentrations in energy-related loans" and said that falling oil prices could result in "negative rating actions" for those banks. SunTrust Banks Inc., which also reported earnings last week, has built a reserve of funds within its wholesale banking sector "to address uncertainty in the energy sector," Chief Financial Officer Aleem Gillani said last week.
Full text: When Keith Cargill, Texas Capital Bancshares Inc.'s chief executive, began his call with analysts Wednesday afternoon, the first question out of the gate tackled the issue on everyone's mind: How are you reacting to the plunge in oil prices? Mr. Cargill became the latest regional-bank official to face off with increasingly worried analysts and investors about the slide, which has dominated fourth-quarter earnings season even as the executives caution it is too early to tell the impact of the energy swoon. Mr. Cargill said the Dallas-based bank was going "loan by loan" to determine its vulnerabilities and has examined half its approximately $950 million energy portfolio so far, focusing first on clients with the most risk. He said the conversations are happening "in real time" and that "we don't see any big issues today," but said downgrades of loans are inevitable, even if they don't result in losses. Other executives have been similarly grilled. On Comerica Inc.'s earnings call last week, roughly three-quarters of the questions from analysts centered on energy. Such loans compose about 7% of the bank's portfolio, or $3.5 billion. In a report Tuesday, analysts at Standard & Poor's said they are reviewing banks "with large concentrations in energy-related loans" and said that falling oil prices could result in "negative rating actions" for those banks. At least two banks say they have built up reserves to cushion the potential blow from energy losses. Meanwhile, regional banks' stocks are taking a hit: Shares are down more than 20% on average since June 20, 2014--the date of oil's most recent peak--at 13 banks whose energy loans comprised 5% or more of the bank's overall loan portfolio during the third quarter, according to FactSet Research Systems and data provided by Keefe, Bruyette & Woods. The list includes banks in Texas, Oklahoma and Louisiana. The KBW Regional Banking Index was down 7% through Tuesday from June 20, according to FactSet. Investors are "panicking," said Brady Gailey, an analyst with Keefe, Bruyette & Woods, adding that he and other bank analysts are increasingly hearing from jittery investors about how much stock to hang on to. His view: "It's going to take a while for losses [at the banks] to flesh out, but it's something we're very concerned about." Plummeting oil prices hold a special fear for bankers who remember the mid-1980s, when oil prices dropped more than 50%. In Texas alone, about 700 banks and thrifts failed between 1986 and 1990. Many bank executives and regulators say a number of measures have been put in place to protect against such widespread losses. Over the past few days, bank executives on earnings calls have sought to assuage investors about the health of their loan portfolios. On Wednesday, Fifth Third Bancorp said it has $2 billion in energy-related loans that comprise about 2% of the bank's total loans. Kevin Kabat, chief executive at the Cincinnati, Ohio-based regional lender, said in an interview that he believes the bank is "very well positioned." "While there will be stress within that portfolio, nothing is overly concerning at this point," he said. As part of lending agreements, banks often require energy borrowers to hedge production to guarantee a minimum price for the oil and gas they produce as a means of ensuring their loans will be repaid. The vast majority of Fifth Third's energy customers are hedged through 2015, executives said. At Dallas-based Comerica, Chief Financial Officer Karen Parkhill said on an earnings call that while more than 95% of the loans are secured, Comerica in the fourth quarter increased its reserve against its energy portfolio. She said the bank's customers are "generally well-hedged." SunTrust Banks Inc., which also reported earnings last week, has built a reserve of funds within its wholesale banking sector "to address uncertainty in the energy sector," Chief Financial Officer Aleem Gillani said last week. On Tuesday, Regions Financial Corp. said energy-related loans comprised 4.3% of its total loans outstanding as of Dec. 31, or $3.4 billion. The Birmingham, Ala., bank said 41% of its clients were hedged through 2015 and an additional 17% through 2016. Grayson Hall, the bank's chief executive, said on a call with analysts Tuesday that Regions isn't "seeing any adverse impacts yet" in its energy loans and that the bank hadn't felt the need to set aside a special reserve to cushion that portfolio. Jonathan Camarda, a wealth manager at Camarda Wealth Advisors, a firm with about $230 million in assets under management in Fleming Island, Fla., said he wants regional banking exposure for clients "to be a minimum" as a result of the depressed oil prices. He says some clients in recent weeks have sold positions in Regions. But he said "a greater proportion of clients has stayed in" so far. Big banks are also seeking to reassure investors. Citigroup Inc. and Bank of America Corp. have emphasized that loans to energy companies make up only a small portion of their commercial credit and are confined mostly to large, multinational companies with solid credit ratings, many of them based in North America or the U.K. Bank of America said in filings that about 6% of its commercial-credit exposure is to energy companies. Citigroup said that about 11% of its commercial-credit exposure is to energy-related companies. At Wells Fargo & Co., Chief Financial Officer John Shrewsberry said last week on an earnings call that the bank is examining loans on a "name-by-name basis" as well as their risk ratings. J.P. Morgan Chase & Co. last week said it has some minor oil exposure, but Chief Executive James Dimon on an earnings call said oil volatility "isn't going to be a big deal" because the bank is large and diversified. Joseph Stieven, president of St. Louis-based Stieven Capital Advisors, which invests in financial institutions, said he has stepped up conversations with management teams at various banks to assess how prepared they are for a continued drop in oil prices. Mr. Stieven says he is asking whether banks plan to modify loans for their customers, how diversified their energy lending portfolios are and what prices they are "stress-testing" oil at in various scenarios. He has discussed these issues with 10 banks, he said. Many banks recalculate loans each spring and fall. Some bank analysts are more sanguine about the resilience of the industry. "There are likely to be higher oil-related losses, but the industry is better able to absorb those losses than at any other time in decades," said CLSA analyst Mike Mayo. "We're not on the cusp of a big disaster right now," he said. Christina Rexrode and Emily Glazer contributed to this article. Corrections & Amplifications Regions Financial Chief Executive Grayson Hall said the bank isn't "seeing any adverse impacts yet" in its energy loans. An earlier version of this article incorrectly attributed the remarks to finance chief David Turner. Write to Julie Steinberg at Credit: By Julie Steinberg
Subject: Banking industry; Prices; Investments; Loans; Bank portfolios; Regional banks
Company / organization: Name: Comerica Inc; NAICS: 522110, 551111; Name: Texas Capital Bancshares Inc; NAICS: 551111; Name: Fifth Third Bancorp; NAICS: 522110, 522120, 551111; Name: FactSet Research Systems Inc; NAICS: 511140; Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647261319
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647261319?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Low Oil Prices Affecting Maersk Oil Business, Helping Global Trade Volumes; Maersk CEO Andersen Sees Oil Prices as a Plus for European Economy
Author: Berman, Dennis K
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
Nils S. Andersen, the chief executive of shipping and infrastructure company Maersk Group, sounded a cautiously optimistic tone about the company's prospects in the face of falling oil prices.
Full text: Nils S. Andersen, the chief executive of shipping and infrastructure company Maersk Group, sounded a cautiously optimistic tone about the company's prospects in the face of falling oil prices. Maersk has significant operations in oil exploration, drilling and transport, and the recent drop in global prices has hit the company, Mr. Andersen said in an interview at the World Economic Forum in Davos, Switzerland. But he cautioned that those same price drops were helping the company's own shipping costs, while also unlocking global demand for trade of goods. "The global demand for containers should go up," Mr. Andersen said. "As we see it, low oil prices should help the European economy generally." He added that "there was still reason to expect growth in India." Overall, he said, "the oil price drop is seen as too negative." Write to Dennis K. Berman at Credit: By Dennis K. Berman
Subject: Supply & demand; Petroleum industry; Prices
Location: Switzerland India
Company / organization: Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647261527
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647261527?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Suncor Executive Says Growth Plans Based on Bullish Crude Price Outlook; Chief Financial Officer Alister Cowan Sees Oil Bouncing Back to $90 to $100 a Barrel
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
A senior Suncor Energy Inc. executive said Wednesday the company won't delay its biggest long-term growth projects because it expects crude oil prices to double from current levels within the next three to four years.
Full text: A senior Suncor Energy Inc. executive said Wednesday the company won't delay its biggest long-term growth projects because it expects crude oil prices to double from current levels within the next three to four years. "In the longer term, oil is going to go back to $90-$100," Alister Cowan, the oil sands producer's chief financial officer, told investors attending a Canadian Imperial Bank of Commerce conference in Whistler, British Columbia, saying that prices would rebound to that level "probably in three years or four years' time." That bullish outlook echoes recent comments by CEO Steve Williams, who has said he also expects oil prices to climb back to the lofty levels of last summer. U.S. oil for March delivery traded on the New York Mercantile Exchange settled Wednesday at $47.78 a barrel. Oil prices have tumbled more than 55% since June, with the steepest decline following the Organization of the Petroleum Exporting Countries' rejection of calls to trim output at a meeting on Nov. 27. "Our long-term expectation is for an average oil price in the $90 to $100 range," Mr. Williams told The Wall Street Journal after the OPEC meeting. Since then, Canada's largest oil company by production volume has joined many other North American energy producers in slashing its budget and payroll to cope with the rapid crude price decline. Last week, Suncor said it would shave 1 billion Canadian dollars ($810 million) from its budget and lay off 1,000 contract workers. But the Calgary-based company pledged to move ahead with its largest growth projects--the Fort Hills oil sands mine in northern Alberta and the Hebron oil field off the coast of Newfoundland--and said production would rise to as much as 585,000 barrels of oil equivalent per day this year, up from 525,000 to 570,000 barrels of equivalent a day in 2014. Mr. Cowan told investors Suncor has enough cash on its balance sheet to fund its stakes in both Fort Hills and Hebron through their planned startups in 2017. "We have the strength to complete our growth projects, so yes we will be growing as a business even in this time of volatile commodity prices," he said. If prices do remain closer to $45 per barrel for the next two to three years, Mr. Cowan said Suncor would consider slowing investment in its large-scale projects, but not canceling them altogether. "You don't want to cancel or delay big projects in the middle," Mr. Cowan said. "We've been there before at Suncor. We know what it costs us--it's multi hundreds of millions of dollars. We're not going to go there again," he said. Speaking at the same conference, the financial chief of oil sands rival Canadian Natural Resources Ltd. said he didn't expect oil prices to recover beyond $65 per barrel for the foreseeable future. "Are we going back to $100 oil? Not currently (in) our view. Are we going back to $60-$65 oil? That has some potential," said CNRL Chief Financial Officer Corey Bieber. Both Mr. Cowan of Suncor and Mr. Bieber of CNRL said their companies would consider acquiring weaker oil and gas producers if an opportunity arose. Suncor has a 40.8% stake in the C$13.5 billion Fort Hills oil sands surface mine, along with partners Total SA, which owns 39.2%, and Canadian diversified miner Teck Resources Ltd., with a 20% share. The company also owns 22.7% of the Hebron project off the coast of Newfoundland, along with 36% share owner Exxon Mobil Corp., 26.7% stakeholder Chevron Corp. and two other minority partners. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Crude oil prices; Petroleum industry; Energy economics
Location: British Columbia Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: New York Mercantile Exchange; NAICS: 523210; Name: Canadian Imperial Bank of Commerce; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647267821
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647267821?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Slide as Supplies Grow; U.S. Energy Information Administration Report Shows Domestic Supplies Rose Sharply
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
U.S. crude inventories rose by 10.1 million barrels in the week ended Jan. 16, the U.S. Energy Information Administration said Thursday, more than the 2.7-million-barrel build that analysts surveyed by The Wall Street Journal had expected.
Full text: Oil prices slid Thursday, nearing recent lows, as U.S. crude-oil supplies hit their highest January level in more than 80 years. U.S. crude inventories rose by 10.1 million barrels in the week ended Jan. 16, the U.S. Energy Information Administration said Thursday, more than the 2.7-million-barrel build that analysts surveyed by The Wall Street Journal had expected. "The build was huge," said Carl Larry, analyst at Oil Outlooks & Opinions. Crude supplies now total 397.9 million barrels, the highest January level on record in weekly EIA data going back to August 1982. In monthly data, stockpiles haven't exceeded that level in any January since 1931, according to the EIA. U.S. crude oil for March delivery fell $1.47, or 3.1%, to $46.31 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 51 cents, or 1%, to $48.52 a barrel on ICE Futures Europe. Both contracts settled above the near-six-year settlement lows they reached last week. Oil prices have plunged more than 55% since June as ample supplies have overwhelmed demand and producers have been unwilling to cut output. Last week's increase in U.S. crude supplies was largely due to an unexpectedly big drop in refinery utilization, analysts said. Refineries ran at 85.5% of capacity in the week, down from 91% the prior week, meaning they bought less crude to process into gasoline and other fuels. "That's an enormous cut in runs," said Donald Morton, senior vice president at Herbert J. Sims & Co. "We've cut now almost 9% in refinery utilization in the last two weeks--that's a lot. That's a huge number." The drop in utilization was due to both scheduled maintenance and unscheduled outages, Mr. Larry said. More refineries will begin scheduled maintenance in the coming months, he said. "A lot of refineries that had to go down unplanned are probably going to stay down through spring maintenance," he said. Gasoline supplies rose by less than expected in the week, and stocks of distillates, including heating oil and diesel fuel, unexpectedly fell. Still, the total amount of crude oil and fuel in storage hit a new weekly record, according to data going back to 1990. "At this rate, we'll have more than adequate supplies going into the summer driving season, which will benefit the consumer," said Andy Lipow, president of Lipow Oil Associates. The national retail price of gasoline Thursday, according to AAA, and the motor club expects it to fall below $2 a gallon by the end of the month. Oil prices slid earlier in the day after the European Central Bank announced the launch of a large-scale . ECB President Mario Draghi said Thursday the central bank will buy a total of EUR60 billion ($69 billion) a month in assets. Weak European economic growth was one reason oil prices plunged nearly 50% in 2014. The ECB's new program is "obviously beyond done in an environment of slow or no growth," said John Kilduff, founding partner at Again Capital. "That obviously argues for a poor demand environment for crude oil and for refined products." However, the stimulus program could eventually shore up the European economy, improving demand in the future, analysts said. The dollar rose against other major currencies after the announcement, and oil prices fell. Oil is traded in dollars, so a strong dollar poses a headwind for oil prices by making the commodity more expensive for buyers using foreign currencies. "This dollar strength that we get from [the ECB decision] should put downward pressure once again on crude oil," Mr. Kilduff said. Gasoline futures settled up 0.53 cent, or 0.4%, at $1.3308 a gallon. Diesel futures fell 0.85 cent, or 0.5%, to $1.6379 a gallon. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum refineries; Petroleum industry; Central banks; Crude oil; Presidents; Crude oil prices; Gasoline prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647280440
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647280440?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017 -11-21
Database: The Wall Street Journal
World News: Canada Cuts Interest Rate, Citing Oil Prices
Author: Menon, Nirmala
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]22 Jan 2015: A.7.
Abstract:
Canada's central bank delivered a shock interest-rate cut Wednesday, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth.
Full text: OTTAWA -- Canada's central bank delivered a shock interest-rate cut Wednesday, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth. The Bank of Canada, which had been widely expected to hold rates steady before raising them later in the year or in early 2016, cut its benchmark overnight rate by a quarter percentage point to 0.75% -- the first cut to the rate since April 2009, when the economy was mired in recession. Sliding oil prices, which the central bank said it expects will recover to around $60 in the medium term, will erode growth and inflation for Canada, it said in a statement announcing the interest-rate cut. It lowered its growth forecast for the first half of 2015 to 1.5%, and to 2.1% for the full year from 2.4%. The bank offered no signals ahead of time that it might change course on rates, and the news was greeted with shock in Canada, where some exporters cheered the accompanying fall in the currency and the cost of borrowing money. But that potential fall in debt costs will likely stoke fears that the Canadian consumer, already the most overleveraged among major economies, could borrow more, a risk the bank highlighted on Wednesday. Canada's central bank made the move as the European Central Bank is readying a proposal for a quantitative-easing program of 50 billion euros (US$58 billion) a month aimed at stimulating growth. Slower global growth and demand for energy, especially in emerging markets like China, is weighing heavily on crude prices because production is surging, especially in North America. While other economies, including that of the U.S., will get a boost from lower energy prices that may stimulate consumers to spend more, the slump will be "unambiguously negative" for Canada, the Bank of Canada said. Unlike the U.S., Canada is a net exporter of oil, with energy extraction and related industries accounting for a much bigger share of the economy. Around 11% of Canada's GDP stems from direct and indirect energy activities, according to government data. The Canadian central bank's rate cut is a marked policy divergence from the U.S. Federal Reserve, which is widely expected to start raising rates this year. Other central banks that have recently cut rates include those of Denmark, Egypt, India, Romania and Turkey. Bank of Canada Governor Stephen Poloz acknowledged at an Ottawa news conference that the move had surprised markets, but suggested that wasn't a factor in the decision. "The market consequences will be what they are," he said. Last week, Timothy Lane, the bank's deputy governor, after delivering a speech titled "Oil Prices and their Impact on the Economy," told a trade group in Madison, Wis., that there wouldn't be any "drastic" changes in the Bank of Canada's policy outlook. The Canadian dollar fell sharply Wednesday, dropping 1.8% from late Tuesday, moving to 81.29 U.S. cents in late trading from 82.55 U.S. cents Tuesday, according to data provider CQG. In the manufacturing hubs of Quebec and Ontario, a weaker dollar has been viewed as a support for exports, which have recently started to regain some of the ground lost during the recession and its aftermath. But a weaker currency amounts to a double-edged sword for some companies with significant input costs in U.S. dollars. Canada's main stock benchmark gained on the rate cut, but a global bump in oil prices accounted for the biggest part of the index gain, with the S&P/TSX closing up 1.8% and the heavily weighted energy group rising 3.2%, following higher crude prices in New York trading. Interest-rate sensitive financial and industrial groups also gained. --- Alistair MacDonald, Rita Trichur and Chester Dawson contributed to this article. Credit: By Nirmala Menon
Subject: Central banks; Recessions; Economic conditions; Economic growth; Crude oil prices; Monetary policy; Interest rates
Location: United States--US Canada
People: Poloz, Stephen
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Classification: 9172: Canada; 1120: Economic policy & planning; 3500: Foreign exchange administration
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.7
Publication year: 2015
Publication date: Jan 22, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647298593
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647298593?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Crash Makes for Crazy Logic at Davos; Eni Chief Looks to OPEC for Succor
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
High oil prices have also boosted efforts to limit oil consumption, with three out of every four new cars now subject to fuel-efficiency standards, according to fellow panel member Fatih Birol of the International Energy Agency.
Full text: Other than a cocktail soiree hosted by the Swiss communist party--yes, one does exist--the last thing you might expect at Davos is an executive extolling the virtues of a cartel. Yet at a World Economic Forum this week, Claudio Descalzi, head of Italian oil major Eni SpA, called on the Organization of the Petroleum Exporting Countries to stabilize crude prices. He reasoned that plunging prices will deter investment, setting up a supply shortfall that could lead prices to hit $200 a barrel within five years (Brent trades at $49 now). "We need a central bank of oil" like the Federal Reserve, Mr. Descalzi said. At the opposite end of the stage, OPEC Secretary General Abdalla Salem el-Badri respectfully disagreed with the idea that the group should cut output to support prices: "This is not logic." The debate is anything but academic. It cuts to the heart of why --and may be headed lower still. Mr. Badri rightfully said that it is odd to cut the lowest-cost barrels of oil, such as OPEC's, to keep prices high to support production from higher-cost sources like U.S. shale. For example, the cash cost to extract a barrel in Saudi Arabia is just $4, Deutsche Bank estimates, compared with $16 in the Permian basin (costs incorporating reinvestment needs are much higher). Even odder is the spectacle of the head of a cartel giving a lesson on the need to respect market forces. After all, OPEC exists to support and stabilize prices to keep consumers addicted and suppliers fed. Its problem is that it struggles to do just that. Real oil prices have been, on average, much more volatile since OPEC was formed in 1960 than in the 50 years before that. And while triple-digit oil brought windfalls for producers, the current crash demonstrates that it also represented a failure for OPEC in unleashing the genie of shale. The topsy-turvy panel showed the extent to which the oil market has been upended. In the shale industry, OPEC faces a fragmented, technologically innovative rival fueled by deep capital markets. High oil prices have also boosted efforts to limit oil consumption, with three out of every four new cars now subject to fuel-efficiency standards, according to fellow panel member Fatih Birol of the International Energy Agency. For the cartel, very high prices encourage more supply and less demand. So, unlike the Fed--or most of the Davos crowd--some OPEC members, Saudi Arabia chief among them, aren't that averse to a crash. Credit: By Liam Denning
Subject: Crude oil prices; Cartels; Petroleum industry; Oil consumption
Location: Saudi Arabia
People: Birol, Fatih
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: World Economic Forum; NAICS: 926110; Name: International Energy Agency; NAICS: 928120; Name: Deutsche Bank AG; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647370019
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647370019?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
United Vows to Put Oil-Price Savings into Debt Reduction, Share Buyback; Airline Expects To Expand Capacity Less than GDP Growth, Regardless of Oil Prices
Author: Carey, Susan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
United Continental Holdings Inc., despite being stung by fuel-hedge losses as oil prices have tumbled, is benefiting from the decline in its No. 1 expense, and could be in a position if its cash flow further improves to accelerate its planned share buyback, the company said Thursday.
Full text: United Continental Holdings Inc., despite being stung by fuel-hedge losses as oil prices have tumbled, is benefiting from the decline in its No. 1 expense, and could be in a position if its cash flow further improves to accelerate its planned share buyback, the company said Thursday. The airline also said it would continue to keep its capacity growth at less than the increase in gross domestic product, regardless of fuel prices. That is a capacity discipline strategy that has served United and the rest of the major U.S. airlines well in recent years, allowing them to boost fares and jettison money-losing routes. "We will only grow the airline as demand dictates," Jeff Smisek, the chief executive, said on a conference call after the company released its fourth-quarter results. Chicago-based United, the No. 2 U.S. carrier by traffic, said it plans to keep its capacity flat in the first quarter and raise it 1.5% to 2.5% for the full year. But the major driver of the modest growth will be the installation of new, slimmer seats on its jetliners, which slightly increases the number of seats per aircraft, and by making network changes that help it keep its planes aloft for more minutes a day and fly more miles on average. United returned $320 million to shareholders last year through share repurchases, as part of its $1 billion share buyback plan. Of the $680 million left to go, "if cash flows come in better than expected...we can accelerate that," said John Rainey, the chief financial officer. He said the company also could use some cash to buy airplanes rather than financing them, which is another form of debt reduction. The company pared its annual capital expenditure guidance to $2.7 billion to $2.9 billion in the next three to four years, compared with the prior range of $2.8 billion to $3 billion annually. He said United isn't interested at this point in paying a dividend, because it believes its stock isn't trading at fair value, hence the company's market capitalization being dwarfed by some of its competitors. The buyback is the change to repurchase stock at low prices, Mr. Rainey said. United said domestic demand decelerated in the last two months of 2014. Jim Compton, the vice chairman and chief revenue officer, said it was broad-based, not confined to specific sectors. Asked if United is seeing weakness among its corporate clients in the energy industry, which is reeling from oil's decline, he said United is seeing only "small impact" so far. Nevertheless, fourth-quarter corporate revenue grew 4%, with particular strength from the technology and health-care industries, Mr. Compton said. United's fourth-quarter net profit fell to $28 million, or seven cents a share, from $140 million or 37 cents a year ago. But excluding a thicket of items in the latest period, the company earned $461 million, or $1.20 a share. Analysts had been expected earnings per share of $1.21, excluding items. Revenue was flat at $9.3 billion. Among the latest one-time items, totaling $433 million, were severance covering some of the 2,500 flight attendants who took voluntary separations from the company and continuing costs related to the integration of the United and Continental subsidiaries, which combined in a 2010 merger. The company also incurred $225 million in hedge losses, including about $80 million from closing certain hedge positions in the first quarter. United said it paid $2.83 a gallon in fuel in the fourth quarter, including 25 cents of cash-settled hedge losses. In the current quarter, it expects to pay $1.96 to $2.01 a gallon for fuel, including 21 cents a gallon in hedge losses. It guided investors Thursday to a first-quarter hedge loss of about $190 million and said its existing 2015 hedge positions beyond the current quarter were in a loss position of $680 million as of last week. Nevertheless, the company, which has been on a major cost-cutting diet for the past year, is making progress. It expects its unit cost, excluding fuel and employee profit-sharing, to be flat in the current quarter. Mr. Rainey, the CFO, said United achieved $380 million in annual nonfuel savings last year and productivity was up for the sixth consecutive quarter in the December 30 period. On an annual basis, 2014 was a big turnaround, with $1.1 billion of net profit, compared with $571 million in 2012. United achieved a 12.9% return on invested capital last year and its stock rose 77%. Executives said the company is expected to report a pretax margin of between 5% and 7%, excluding one-time items, in the current quarter. United shares were up 3.9% in midday training, to $71.91. --Angela Chen contributed to this article. Write to Susan Carey at Credit: By Susan Carey
Subject: Securities buybacks; Stock prices; Financial performance; Earnings per share
Location: United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Continental Airlines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647370156
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647370156?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Precision Castparts Posts Weak Results on Low Oil Demand, Deferred Shipments; Industrials Company Signaled Earnings for This Year and the Following Year May Be Below Projections
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
Alongside some other aerospace and defense companies--including B/E Aerospace Inc. and Huntington Ingalls Industries Inc.--it has targeted the oil and gas sector as a growth market where it could apply its advanced engineering technology, a move that places it at a. In addition, Mr. Donegan said further aerospace reductions may occur, since the company's visibility to the customer is limited.
Full text: Precision Castparts Corp. said Thursday that falling demand for oil, extended equipment maintenance problems and deferred shipments from aerospace customers led to weak results in the December quarter. The results missed analyst expectations, and the Portland, Ore.-based industrials company signaled that earnings for the year ending in March and the following year may come in below projections. Precision forecast earnings per share from continuing operations in the range of $12.80 to $12.90, below analyst estimates of $13.32. Next year's earnings could come in below the company's previously projected $15.50 to $16.50 range, PCP said. The company "faced some real challenges" in its oil and gas markets, said Chief Executive Mark Donegan, adding that "we cannot predict when this market will recover." Precision Castparts generated a quarter of its sales in the most recent year from the energy and power markets. Alongside some other aerospace and defense companies--including B/E Aerospace Inc. and Huntington Ingalls Industries Inc.--it has targeted the oil and gas sector as a growth market where it could apply its advanced engineering technology, a move that places it at a. In addition, Mr. Donegan said further aerospace reductions may occur, since the company's visibility to the customer is limited. For its third quarter ended Dec. 28, the company posted a profit of $445 million, or $3.11 a share, up from $433 million, or $2.96 a share, a year earlier. Revenue edged up 5.2% to $2.46 billion. Analysts had called for earnings of $3.17 a share on revenue of $2.48 billion. The stumble in Precision Castparts' energy business follows a prolonged period of market underperformance that analysts have attributed to destocking by aerospace customers and confusion among investors over its financial targets. Shares of Precision, off about 3% in light premarket trading, have been down about 23% in the past 12 months through Wednesday's close. Write to Angela Chen at Credit: By Angela Chen
Subject: Earnings per share; Acquisitions & mergers; Stock prices; Energy industry
Company / organization: Name: Huntington Ingalls Industries Inc; NAICS: 336611; Name: B-E Aerospace Inc; NAICS: 336413
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647370219
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647370219?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Gasoline Heads Toward $2, the Benefits Start to Trickle Down; Consumers Step Up Spending and Debt Reduction, but Oil Patch Faces a Big Pinch
Author: Timiraos, Nick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
Gas prices are below $2 a gallon in 27 states. Since 1980, gas prices have only once seen a bigger six-month decline.
Full text: Gas prices appear headed below a nationwide average of $2 a gallon in coming days, one of the swiftest declines on record and one that is beginning to ripple through the U.S. economy in ways both familiar and unpredictable. Restaurants and bars are seeing their best sales growth in years. Americans are driving more--and buying bigger cars and trucks. Consumer confidence is sitting at an 11-year high, with lower-income households showing the biggest improvement. And some households are using the savings at the pump to get caught up on debts. But the drop in oil prices is also testing the nation's booming energy sector, spurring layoffs and cutbacks. The speed of the decline, which partly reflects a deteriorating outlook for global demand, has unsettled Wall Street, putting stock and bond investors--already uneasy over sluggish global growth--on the lookout for clues that the U.S. might be hurt more than previously thought. Still, for the nation as a whole, economists generally say the benefits of cheaper gas will outweigh those costs. "To the extent you're seeing weakness, it's very concentrated and somewhat dramatic," said Tim Duy, an economics professor at the University of Oregon. "It's more evident than the additional spending power that any one family is going to have, which will be spread fairly thinly," even though in the aggregate, "it will end up being a significant positive." Average pump prices--$2.04 a gallon Thursday--are now down more than 40% since last June, when they stood near $3.68 a gallon, according to the auto club AAA. Gas prices are below $2 a gallon in 27 states. Since 1980, gas prices have only once seen a bigger six-month decline. That came during the 2008 financial crisis and was driven almost wholly by a collapse in demand, while the current slowdown has stemmed from both higher supply and weaker global demand. The drop in gas prices comes amid an economic expansion that has shown signs of acceleration. Job growth last year ran at its best pace in 15 years, and the economy during the third quarter expanded at a 5% seasonally adjusted annual rate, its strongest pace in 11 years. "Lower gasoline prices should provide some relief in the near term for many households who live paycheck to paycheck," particularly against a backdrop of weak wage growth and rising housing and health insurance costs, Howard Levine, chief executive of Family Dollar Stores Inc., said recently. Mr. Levine told analysts this month that while Family Dollar's typical shopper is "still struggling," customer traffic at the discount retailer notched its strongest growth in two years last month, punctuated by its highest ever sales for a single day on Christmas Eve. Falling gas prices benefit lower- and middle-income households more than top earners because energy costs account for a higher share of their income. The bottom fifth of earners spent around 12% of their after-tax income on gas last year, compared with around 3% for the top fifth of earners, according to Wells Fargo. If prices remain at current levels, the lowest-income households will spend around 8.3% of their income on gas this year, compared with around 2% for the highest-income households. "Most restaurants depend on what's happening with the middle class, and with gas prices down so much, we are seeing across-the-board increases" in sales, said David Barr, chairman of Your Pie, a fast-casual pizza chain with stores in four southern states. "Anything in quick-service dining is seeing quite a bit of the benefit," said Mr. Barr, who also owns 23 KFC chicken franchises. To be sure, lower oil prices have a thorny underside for Texas, North Dakota and other regions where higher energy prices unleashed a boom in drilling, thanks to advanced extraction techniques from shale-oil formations. Field-service companies are cutting jobs and drill-rig counts are falling. "This is what I hate about this industry, frankly, is these brutal cycles we have to go through," said Martin Craighead, chief executive of oil-field services company Baker Hughes Inc., in an earnings call on Tuesday. The company said it was cutting 7,000 jobs world-wide, or 12% of its workforce. High-yield bond issuance from energy companies, meanwhile, has jumped to $189 billion outstanding, from $89 billion in 2010, according to Wells Fargo. The energy sector accounts for around 14% of outstanding corporate bonds, and rising defaults could lead to greater financial volatility and increased borrowing costs for some companies. One question now is whether, following the deep recession of 2007-09, more Americans will use any windfall at the pump to reduce debt, shore up savings or spend more on discretionary items. For Wendy Zona of Johnson City, Tenn., the lower prices have been "a great benefit for my family--one we definitely weren't counting on." Her husband, a restaurant manager, drives his Ford Escape an hour each way to work and spends around $75 on gas every week, down from around $140 last summer. She isn't making big plans, however, for the savings. Ms. Zona, 44 years old, who has an office job at a car dealership, says most of it will cover medical expenses from her gallbladder surgery that required a long hospital stay late last year. She also has a son in college. "We've got lots of other bills to dig out from under," she said. If crude-oil prices remain at $50 a barrel, it would result in per capita savings of roughly $575--or nearly $1,325 per U.S. household--on gas over the coming year relative to last year's spending, according to an estimate prepared for The Wall Street Journal by ClearView Energy Partners. That is up from its most recently published estimate of $380 made at the beginning of December, when oil prices stood near $75 a barrel. The larger figure doesn't include an average $100 in savings relative to 2013 spending that consumers booked from cheaper gas last year. Through last week, pump prices have declined for 16 straight weeks, breaking the record set in 2008, according to the Energy Information Administration, whose records date to 1990. The EIA said prices on Monday averaged $2.07 a gallon. Prices last fell below $2 in November 2008 and remained below that mark for around six months. Adjusted for inflation, gas prices fell below $2 a gallon in 1986 and remained below that level for the better part of the next 17 years. If history is any guide, consumers will spend around 25% of any gas savings within six months, and around two-thirds within one year, said Mark Zandi, chief economist at Moody's Analytics. Some of the increased savings are beginning to show up in gauges of economic performance and consumer sentiment. Data from the Federal Reserve showed that credit-card balances declined in November at their fastest pace in a year. The nation's personal saving rate fell for the fifth straight month to its lowest level all year, at 4.4%, according to separate data from the Commerce Department. When gas prices fell by a similar magnitude in 1986, the saving rate fell from 9.3% in March to 6.4% by year end. Retail sales in December excluding gasoline rose 5.1% from a year earlier on a seasonally adjusted basis, compared to a 4.1% gain in 2013. Sales at restaurants and bars rose 8% from a year earlier, the best growth rate in seven years. Vehicle miles driven in the year ended November rose to a six-year high, the Federal Highway Administration said Tuesday, though they are still 1.3% below their 2007 peak. And sales of trucks and sport utility vehicles, up 10% over the past year, are increasing faster than sales of passenger cars, which are up 2%, according to researcher Autodata Corp. Write to Nick Timiraos at Credit: By Nick Timiraos
Subject: Cost control; Households; Petroleum industry; Statistical data
Location: United States--US
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: Family Dollar Stores Inc; NAICS: 452112, 452990; Name: University of Oregon; NAICS: 611310
Product name: Ford Escape
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647381506
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647381506?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
At Davos, CEOs Eagerly Await Boost From Oil Price Drop; For Some Companies Lower Oil Prices Mean Savings and a Revenue Boost
Author: Mattioli, Dana; Berman, Dennis
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract: None available.
Full text: DAVOS--Low oil prices have roiled oil exploration and production companies, but chief executives from a wide swath of the global economy, gathered here for the annual World Economic Forum are looking forward to a boost from the drop. Oil prices are down more than 50% since June, amid a supply glut partly due to booming American shale-oil production. In November, the Organization of the Petroleum Exporting Countries chose to maintain its output levels, saying it wouldn't risk market share as non-OPEC producers, from the U.S. to Russia, continue to pump flat out. That has slammed big oil firms and companies that provide services for the sector. A number of big companies, from ConocoPhillips to BP PLC, have signaled they will be cutting back capital spending. On Thursday, OAO Lukoil Holdings President Vagit Alekperov said in an interview here that the Russian oil giant was cutting its 2015 investment plan by 10%, or $1.5 billion, in response to low oil prices. But for companies that make oil-based products or serve customers who are now spending less on gasoline, lower prices are translating into saving or promising to boost revenue from consumers with more discretionary cash. Nils Andersen, the chief executive of the Maersk Group, the Danish shipping and infrastructure conglomerate, also runs significant operations in oil exploration, drilling and transport. Mr. Andersen says lower oil prices have hit the company, but expects to see benefits: Lower crude will help bring the company's own shipping costs down, while also unlocking global demand for trade of goods. "Global demand for containers should go up," Mr. Andersen said. "As we see it, low oil prices should help the European economy generally." Sealed Air Corp. which makes packaging products such as Bubble Wrap and food packaging, started seeing its resin costs decrease in December, said Chief Executive Jerome Peribere. Prices for the U.S.-based company's oil-based products declined again in January, he said. "The low oil costs will help us offset negative currency swings," said Mr. Peribere. A strong dollar has hit some U.S. companies whose overseas revenue is now valued less in dollar terms. Historically, gasoline prices and consumer spending have been closely intertwined. When prices at the pump are expensive, consumers tend to cut back on spending elsewhere to offset the rise. When gas prices come down, retailers often see upticks in sales. "It's got to help," said Richard Gelfond, chief executive of IMAX Corp., the U.S.-Canadian movie theater firm. "People drive to the movies and will now have extra money in their pockets that they can spend on entertainment," Mr. Gelfond said. France's L'Oréal SA, the world's largest cosmetic company, said the decline in oil prices "puts a lot of money into the pockets of our consumers." U.S.-based medical supplier Henry Schein Inc. uses oil-based products in everything from rubber gloves, one of its top-selling products, to face masks and tray covers. It also ships orders to customers globally. Chief Executive Stanley Bergmansaid he expects to see lower costs "ripple through the supply chain" because of the lower cost of oil. He also expects fees on shipping products to decrease. Write to Dana Mattioli at and Dennis Berman at Credit: By Dana Mattioli and Dennis Berman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647391388
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647391388?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada's Harper Calls Central Bank Rate Cut Appropriate; Prime Minister Notes Crude Oil Prices Fall Would Pose Headwinds For Economy
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
OTTAWA--Canadian Prime Minister Stephen Harper said the Bank of Canada's surprise interest-rate cut this week was "appropriate," noting the deep decline in crude-oil prices would pose significant headwinds for the economy.
Full text: OTTAWA--Canadian Prime Minister Stephen Harper said the Bank of Canada's surprise interest-rate cut this week was "appropriate," noting the deep decline in crude-oil prices would pose significant headwinds for the economy. Speaking at an event on Thursday, the Canadian leader said he has confidence in the central bank--which conducts policy independent of the government--and its actions. The central bank on Wednesday with a 25-basis-point cut to its benchmark policy rate, to 0.75%, saying the move was meant to act as an insurance policy against tumbling oil prices. The Bank of Canada said the 50%-plus decline in the price of crude oil was "unambiguously negative" for the Canadian economy. Mr. Harper said he remained upbeat on the Canadian economy, as the Bank of Canada has guided for 2%-plus growth this year and in 2016, and reiterated his government's long-held pledge to record a balanced budget this year. Economists have warned that a budget balance could prove difficult as plunging crude prices weigh on corporate and household incomes, and in turn tax revenue. "We live in a world of volatility," said Mr. Harper about the uncertainty over crude-oil prices. "These things are creating some shocks and will impact us, but they are not going to throw us off our fundamental growth plan." Mr. Harper said Canada's monetary policy remains among the most restrictive in the developed world. Earlier Thursday, the European Central Bank launched an aggressive to combat ultralow inflation and Denmark's central bank also cut its main policy rate for the second time in a week. The Bank of Canada's rate cut sparked worries Canadians would add to their elevated debt loads, which are at record levels. Mr. Harper said Canadians should think carefully about their financing decisions, as the current level of low rates won't continue indefinitely. Mr. Harper faces re-election later this year, with his Conservatives attempting to win a fourth-straight mandate. His party has recently taken a slim lead in public-opinion polls, partly on the strength of his leadership following terror-inspired attacks that killed two Canadian soldiers in Quebec and Ottawa. As for Canada's role in Iraq, Mr. Harper said he doesn't expect a combat role for the Canadian military currently stationed there. Senior military officers that Canadian special forces exchanged fire with Islamic State militants last week, marking the first time western ground troops reportedly fought with the extremist group. Canadian military personnel are tasked with helping advise Iraqi forces in their fight against Islamic State militants. "And if those guys fire at us, we will fire back." Write to Paul Vieira at Credit: By Paul Vieira
Subject: Central banks; Monetary policy; Prices
Location: Canada
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647431647
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647431647?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Caution Emerges on Gold Stocks; Mining Shares Have Surged as Oil Has Fallen
Author: Hoyle, Rhiannon
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
Thursday morning in New York, spot gold rose as high as $1305 in response to confirmation that the European Central Bank will buy large amounts of government debt to pump money into the economy in order to create growth, boost prices and forestall deflation.
Full text: SYDNEY--As gold trades near a five-month high, some big investors who have turned to miners of the safe-haven metal to place their bullish bets are turning cautious. Stocks of companies that dig up gold have been among the world's top performers. As of the close of trading on Wednesday, the NYSE Arca Gold Miners Index was up about 25% so far this year, compared with a roughly 1% drop in the S&P 500. Spot gold was up nearly 9% year to date here on Thursday. Investors use stocks as a way to double down, betting both that gold will rally and that the individual companies will perform well as they benefit from lower costs, including cheaper energy prices. But many money managers say they have now pared back their holdings or stepped to the sidelines. Drivers of gains such as uncertainty in the global economy and volatile moves in currencies are set to fade, they say. "The current hot topics of European quantitative easing and the Swiss franc will become history in a week's time, and gold will top out," said Neil Gregson, a fund manager at J.P. Morgan Asset Management, overseeing US$2.5 billion in natural-resources investments. "When it does, I think these gold stocks are going to fall back very aggressively." Mr. Gregson was buying gold throughout all of last year. The metal now accounts for about 20% of his portfolio, up from about 13%, but he says he has stopped buying and is waiting before taking his next move. "Gold is certainly at the forefront of our discussions because every day it doesn't fall, the sector seems to go up another percent or two," he said. "The thing is, it's now a trade--a very crowded trade." Investors like Mr. Gregson say the rally is running out of steam given the recovery in the U.S. economy and the likelihood that the Federal Reserve will raise interest rates. The metal is typically bought in times of distress; it generates no yield, so increases in rates on safe securities such as U.S. Treasury debt tend to weigh on the price. Gold rallied to a five-month high of US$1,305 an ounce earlier this week, but then pulled back below US$1,295. Thursday morning in New York, spot gold rose as high as $1305 in response to confirmation that the European Central Bank will buy large amounts of government debt to pump money into the economy in order to create growth, boost prices and forestall deflation. Some investors see gold as a better store of value than currencies or government bonds during periods of monetary easing. A benchmark index for gold-mining stocks in Australia--second only to China among gold-producing countries--has risen 28% since the start of 2015, but slipped Thursday after reaching a 10-month high intraday earlier. Last week, money flowed out of the world's biggest gold exchange-traded funds--typically considered to be less reactive to swings in price--implying some fatigue among investors. Many fund managers say they can't see a more substantial rally in gold stocks without a further jump in gold prices. Ric Ronge, senior resources fund manager at Pengana Capital, said he expects the market to become increasingly volatile after the sharp rally of recent weeks. "Now is certainly the opportunity to trade it around a little bit: Buy when they're low and sell when they're higher," said Mr. Ronge. "It is going to be a bumpy ride." To be sure, the continued rise in gold-mining indices suggests few investors are dumping shares in any big way. After years spent in the shadow of gold, as investors chose to buy the metal itself, rather than firms that produce it, miners last year sprung back into favor, driven by stronger earnings and cuts to mining costs, and helped toward year-end by falling oil prices. In Australia, investors became increasingly upbeat on the sector after a fall in the local currency meant miners were earning more for each ounce of gold they produced. "I remain positive on the sector in the short- to medium-term," but cashing in on some of the profits made during the rally is "a logical step," said Market Matters investment advisor Alexander Aguilan. The company advises private investors and self-managed pension funds on behalf of Shaw Stockbroking, one of Australia's largest independent stockbrokers. He said he has cut his holdings in gold stocks, including Australia's largest listed gold miner, Newcrest Mining Ltd. Others are simply keeping their powder dry. "It has had a great run, but you really have to wonder if it's sustainable," said Matt Riordan, a Sydney-based portfolio manager at Paradice Investment Management, which has a total of around 8 billion Australian dollars (US$6.5 billion) in assets under management. He has held his exposure steady throughout, but says he's now "very cautious" on the outlook for the sector. "We just aren't convinced gold is out of the woods," he said. Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com Credit: By Rhiannon Hoyle
Subject: Gold markets; Investment advisors; Mutual funds; Stock exchanges; Prices
Location: United States--US Australia
Company / organization: Name: NYSE Arca; NAICS: 523210; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647432924
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647432924?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Statoil Tightens Its Belt as Oil Prices Plunge; Like Peers, Norwegian Oil Firm Is Likely to Spend More Money Than It Brings In This Year
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract: None available.
Full text: GUDRUN PLATFORM, North Sea--Amid years of high oil prices, Statoil ASA spent $2.67 billion on developing the Gudrun field--a relatively small reservoir of crude buried more than 2 miles under the sea floor here. But since Statoil approved the development in 2010, crude prices have fallen by 30%. Oil only started flowing last year, and the field is just barely profitable, according to Statoil projections from when the field was approved, and adjusted for current oil and currency prices. That new math is threatening final investment decisions for several similar fields in nearby waters. "It's challenging" to make such projects profitable in today's low-price environment, said Statoil's projects director, Anders Opedal. "We just have to work very hard" to cut costs, he said. Statoil's dilemma underscores a problem shared by much of the oil industry: how to cope with international crude trading under $50 a barrel for the first time in nearly six years. Amid years of higher prices, companies pushed out into smaller, costlier fields to boost reserves. Statoil sat on plans to move ahead with Gudrun for years, until technological advances--and higher oil prices--made it worth the costs. For projects still on the drawing board, Statoil and others will either have to abandon or delay them, or cut costs aggressively to keep them profitable. Statoil says earlier rounds of cost cutting--initiated months before oil's precipitous fall-- have helped cushion the company. It started cutting last February, citing rapidly rising industry costs. The company vowed last February to cut costs by $1.3 billion by 2016, mainly by drilling faster and reducing engineering hours and red tape, and has also said it would shed over 1,000 jobs--including 500 of its 9,000 employees in Norway-- by the end of 2016. The recent fall in prices, though, is squeezing Statoil, the world's 20th largest producer by output and 67% owned by the Norwegian government. As long as oil prices stay below $90 per barrel, the company has to borrow money to pay its dividends and capital expenditure, according to Oslo-based Sparebank1 Markets. If oil averages $60 a barrel this year, Statoil would need to borrow 56 billion kroner ($7.3 billion) to meet those obligations, the bank estimates. Statoil declined to comment on Sparebank1 Markets' estimates. U.S. crude oil for March delivery traded at $46.31 a barrel Thursday on the New York Mercantile Exchange. Brent, the global benchmark, traded at $48.52 a barrel on ICE Futures Europe. Statoil's current debt stands at 86.8 billion kroner, up from 30.2 billion kroner three years ago. According to Citi, Statoil's capital expenditure and dividend commitments are set to outstrip cash flow by 23% in 2015. Citi data show the world's other major oil companies are all going to spend more money than they bring in this year. Statoil's gearing--or debt as a percentage of its capital--was 19% at the end of the third quarter, and the company has said it can afford to bring that number up to 30%. For the last five years, Statoil has reduced capital expenditure by selling more than $20 billion worth of assets, including its gasoline retail arm, its share of the Shah Deniz field in Azerbaijan, stakes in several Norwegian offshore fields and acreage in the southern part of the natural gas-rich Marcellus Shale formation in the U.S. The cost-cutting "must be intensified," said Arne Sigve Nylund, the company's director of development and production in Norway. A Statoil employee for 32 years, Mr. Nylund has seen oil prices everywhere from below $20 per barrel to above $140 per barrel. Statoil and its peers must adapt, he said. "We've seen a higher cost level and reduced profitability," Mr. Nylund said. "The way I see it, we will see a more margin-focused business, with much more focus on costs." The Gudrun field, discovered in 1975, is projected to produce for 20 years. At the time it was approved five years ago, Statoil estimated that the field would need oil prices of $56.70 per barrel to be profitable. Statoil declined to comment on the field's current profitability. But a recently stronger dollar has pushed that so-called break-even price closer to $45 a barrel--just a few dollars below today's prices. "Gudrun is a very deep reservoir," said Arne Bjørndal, the field's platform chief. "It's a high-pressure, high-temperature field." Amid gale-force winds and rain hammering the main deck of the platform, Mr. Bjørndal points in the direction of a nearby field. Gina Krog, another complicated project, which was approved in 2012, with a break-even price of $77 per barrel. That is now $61, adjusted for the stronger dollar. First production is set for 2017. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647461962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647461962?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Leak of Oil-Well Wastewater Taints River in North Dakota; State Says Bakken Shale Region Pipeline Leak of 3 Million Gallons Is Biggest-Ever Spill of 'Brine'
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Jan 2015: n/a.
Abstract:
In North Dakota, about 2.7 million gallons of wastewater have been collected from Blacktail Creek in a rural area about 15 miles north of Williston, N.D. The cleanup effort has been complicated by winter weather that has made it more difficult to track the spread of the contamination and pump out the wastewater from the ice-covered creek, said Dave Glatt, chief of the state health department's environmental section.
Full text: Salty wastewater from oil wells has contaminated a creek and flowed into the Missouri River after a huge pipeline leak in North Dakota, state officials said Thursday. The state said the leak of 3 million gallons is its biggest-ever spill of "brine," which in addition to high concentrations of salt often contains trace amounts of heavy metals that can be radioactive. Such spills, which can kill vegetation and ruin farmland, have been increasing in Western North Dakota as the state has become a leading oil producer, pumping more than a million barrels of crude a day from the Bakken Shale. Briny wastewater is extracted from deep underground along with oil and gas and must be disposed of, usually by injecting it back into the ground at separate wells drilled specifically for that purpose. The state is investigating the cause of the leak, which doesn't currently pose a threat to public health or drinking water, North Dakota officials said. The area where the spill occurred is sparely populated and officials in surrounding Williams County said they weren't concerned about the impact on water supplies, which are miles downstream from the area affected. The Bakken region also is cleaning up from an unrelated oil spill over the weekend in the Yellowstone River, a tributary of the Missouri. An oil pipeline under the river burst, releasing about 960 barrels of crude near Glendive, Mont., and contaminating the local water-treatment plant. In North Dakota, about 2.7 million gallons of wastewater have been collected from Blacktail Creek in a rural area about 15 miles north of Williston, N.D. The cleanup effort has been complicated by winter weather that has made it more difficult to track the spread of the contamination and pump out the wastewater from the ice-covered creek, said Dave Glatt, chief of the state health department's environmental section. The wastewater leak was first detected two weeks ago when the Texas-based pipeline operator, privately held Summit Midstream Partners LLC, said that an "undetermined amount" of brine had spilled out of the line, which was installed in June. The company's "full and undivided attention is focused on minimizing and remediating any environmental impacts, ensuring cleanup efforts, and addressing the needs of impacted landowners, regulators and government officials," said Jonathan Morgan, a Summit spokesman. The Summit Midstream pipeline collects water from 40 well pads and ships it to a disposal facility operated by a third party, the company said. The state has faced a number of challenges handling the surge in wastewater, ranging from spills by tanker trucks and ruptured pipelines to storage tanks filled with the salty water that have been struck by lightning. About 20,000 miles of gathering pipelines crisscross North Dakota, including those carrying wastewater to disposal sites, according to state data. In 2013, North Dakota's state legislature voted down a bill that would have required flow meters and pressure cutoff devices on wastewater pipelines. But state regulators have proposed tightening rules on the disposal of lightly radioactive well waste. Write to Chester Dawson at Corrections & Amplifications Summit Midstream Partners LLC told North Dakota regulators an "undetermined amount" of briny wastewater had spilled out of a pipeline when the company first detected a leak earlier this month. An earlier version of this article incorrectly quoted the company as saying an "undermined amount." (Jan. 23, 2015) Credit: By Chester Dawson
Subject: Pipelines; Petroleum industry; Oil spills; Public officials; Creeks & streams
Location: Missouri River
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 22, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647740566
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647740566?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Leak of Oil-Well Wastewater Taints River in North Dakota; State Says Bakken Shale Region Pipeline Leak of 3 Million Gallons Is Biggest-Ever Spill of 'Brine'
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
In North Dakota, about 2.7 million gallons of wastewater have been collected from Blacktail Creek in a rural area about 15 miles north of Williston, N.D. The cleanup effort has been complicated by winter weather that has made it more difficult to track the spread of the contamination and pump out the wastewater from the ice-covered creek, said Dave Glatt, chief of the state health department's environmental section.
Full text: Salty wastewater from oil wells has contaminated a creek and flowed into the Missouri River after a huge pipeline leak in North Dakota, state officials said Thursday. The state said the leak of 3 million gallons is its biggest-ever spill of "brine," which in addition to high concentrations of salt often contains trace amounts of heavy metals that can be radioactive. Such spills, which can kill vegetation and ruin farmland, have been increasing in Western North Dakota as the state has become a leading oil producer, pumping more than a million barrels of crude a day from the Bakken Shale. Briny wastewater is extracted from deep underground along with oil and gas and must be disposed of, usually by injecting it back into the ground at separate wells drilled specifically for that purpose. The state is investigating the cause of the leak, which doesn't currently pose a threat to public health or drinking water, North Dakota officials said. The area where the spill occurred is sparely populated and officials in surrounding Williams County said they weren't concerned about the impact on water supplies, which are miles downstream from the area affected. The Bakken region also is cleaning up from an unrelated oil spill over the weekend in the Yellowstone River, a tributary of the Missouri. An oil pipeline under the river burst, releasing about 960 barrels of crude near Glendive, Mont., and contaminating the local water-treatment plant. In North Dakota, about 2.7 million gallons of wastewater have been collected from Blacktail Creek in a rural area about 15 miles north of Williston, N.D. The cleanup effort has been complicated by winter weather that has made it more difficult to track the spread of the contamination and pump out the wastewater from the ice-covered creek, said Dave Glatt, chief of the state health department's environmental section. The wastewater leak was first detected two weeks ago when the Texas-based pipeline operator, privately held Summit Midstream Partners LLC, said that an "undermined amount" of brine had spilled out of the line, which was installed in June. The company's "full and undivided attention is focused on minimizing and remediating any environmental impacts, ensuring cleanup efforts, and addressing the needs of impacted landowners, regulators and government officials," said Jonathan Morgan, a Summit spokesman. The Summit Midstream pipeline collects water from 40 well pads and ships it to a disposal facility operated by a third party, the company said. The state has faced a number of challenges handling the surge in wastewater, ranging from spills by tanker trucks and ruptured pipelines to storage tanks filled with the salty water that have been struck by lightning. About 20,000 miles of gathering pipelines crisscross North Dakota, including those carrying wastewater to disposal sites, according to state data. In 2013, North Dakota's state legislature voted down a bill that would have required flow meters and pressure cutoff devices on wastewater pipelines. But state regulators have proposed tightening rules on the disposal of lightly radioactive well waste. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Pipelines; Petroleum industry; Oil spills; Public officials; Creeks & streams
Location: Missouri River
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647480628
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647480628?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Death of King Unlikely to Alter Saudi Oil Policy; Kingdom Is Likely to Continue to Pump Crude in Face of Glut
Author: Gold, Russell; Friedman, Nicole; Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
Traditionally, the kingdom's top decision-making body on oil is the Supreme Council for Petroleum and Minerals, which is led by the king and includes senior royal family members, ministers including Mr. al-Naimi and top industry executives.
Full text: Saudi Arabia has charted a long-term course to drive down oil prices and maintain its major share of the global market--and a change of who is on the throne in Riyadh won't likely alter this course, energy experts said. Even after , the kingdom is likely to continue to pump crude in the face of a global glut, which has helped push prices down by more than 55% since last June. Surrounded by unrest and uncertainty in the Middle East, Saudi Arabia is protecting itself by exploiting its big advantages--huge oil reserves and low-cost crude production, said Sarah Emerson, principal of ESAI Energy LLC in Boston. "They need to make sure they have enough market share for not just tomorrow but 2040 and 2060 and beyond to ensure longevity," Ms. Emerson said. The Saudis embarked on this new strategy in reaction to the U.S. oil boom, and it is a new status quo that won't change under a new king, she said. That doesn't mean that in the short term, oil traders won't be nervous about the ascension to the throne of the new king, Salman, or that oil markets won't be volatile. , down 21 cents, or 0.4%, at $46.10 a barrel on the New York Mercantile Exchange. Investors who had bet on lower prices likely closed out positions on the chance that the king's death could lead to a change in Saudi Arabia's stance, said Nader Naeimi, a fund manager in Sydney, at AMP Capital, which oversees more than $120 billion in assets. "Given how far oil has fallen, markets are increasingly responsive to any kind of news that may be positive for prices," he said. "Whether it is going to be durable isn't clear for now." Some investors don't think the new Saudi king will affect the policy of the Organization of the Petroleum Exporting Countries. "I don't think it should have an impact on the oil price," said Pierre Andurand, chief investment officer of $450 million London hedge fund Andurand Capital Management LLP, whose fund posted large gains in 2014 betting on lower oil prices. The country's current strategy has the backing of its powerful oil minister, Ali al-Naimi, so investors and traders will be watching for the possibility that a change of oil ministers could be afoot. Some Saudi experts say it is unclear if the behind-the-scenes power struggle over who has influence over King Salman is finished and whether the kingdom's princes have coalesced around him. Mr. al-Naimi, 79, has headed the oil ministry since 1995, during which time he has become one of the most closely watched figures in global oil markets. He has previously said he had hoped he could dedicate more time to King Abdullah University of Science and Technology, where he serves as chairman. "Despite efforts in Riyadh to make everything appear smooth, there are some big questions out there," said Simon Henderson, director of the Gulf and Energy Policy Program at the Washington Institute. King Salman, in his previous capacity as crown prince, said in a speech on behalf of the late monarch earlier this month that the kingdom would continue to deal with the challenge posed by falling crude prices with a "firm will." Traditionally, the kingdom's top decision-making body on oil is the Supreme Council for Petroleum and Minerals, which is led by the king and includes senior royal family members, ministers including Mr. al-Naimi and top industry executives. But the Supreme Council hasn't issued any statement on oil prices for months and key decisions have recently been made by Mr.al-Naimi, with the backing of the late king. Saudi industry officials have said that King Salman is likely to retain the long-standing oil minister at least in the short term. Traditionally incoming kings have chosen to appoint new ministers to lead key ministries like oil. If the king opts for finding a successor the best-suited candidates to replace him are likely to be the chief executive of the state-owned giant Saudi Aramco Khalid Al-Falih or Salam's own son Prince Abdulaziz bin Salman, the current deputy oil minister who attends most OPEC meetings. The world's top oil exporter, however, has never chosen a royal to serve as oil minister. Last year, the secretive kingdom saw an unusually high level of internal debate over how to respond to oil's downturn. In early October, the country's representative to OPEC surprised attendees at a New York seminar . But as the oil-price slide accelerated, Prince Abdulaziz worried to colleagues that the kingdom's budget couldn't bear lower prices long, people familiar with the matter said. Saudi Arabia controls more than 15% of the world's proven oil reserves and vies with Russia and the U.S. for the title of biggest petroleum producer in the world. As American companies have pumped soaring amounts of oil from shale, Saudi Arabia's exports to the U.S. have fallen, dropping to 25.6 million barrels a month in October. But it remained the third-largest supplier to the U.S. after Canada and Mexico, according to the U.S. Energy Information Administration. After oil prices began dropping from their triple-digit peak in late June, traders looked to Saudi Arabia to cut production to prop up prices, as it did in the 1980s. But in November, the Organization of the Petroleum Exporting Countries voted to keep pumping the same amount of oil, and that isn't likely to change soon, said Amy Myers Jaffe, an energy observer at the University of California Davis. "Not only did the Saudis signal a smooth transition, they are transferring power to a faction that tends to feel that the alliance with the U.S. should be a priority," she said. "Whatever succession issues may hit the royal family one day...we aren't at that moment in time." Summer Said, Shani Raja and Eric Yep contributed to this article. Write to Russell Gold at , Nicole Friedman at and Lynn Cook at Credit: By Russell Gold, Nicole Friedman and Lynn Cook
Subject: Petroleum industry; International markets; Executives; Crude oil prices
Location: United States--US Riyadh Saudi Arabia Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New Y ork, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647484252
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647484252?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia, OPEC Jostle to Meet China Oil Demand; Glut of Crude Fuels Rivalry Between the Major Producers
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract: None available.
Full text: BEIJING--Warming ties between China and Russia are giving a big boost to Chinese imports of Russian oil, to the chagrin of OPEC nations jockeying for a slice of China's market. Faced with falling prices and lower demand from the U.S., oil-exporting nations are increasingly putting their hopes in China's still-robust demand for crude. But Saudi Arabia and other big producers like Venezuela have seen such sales drop as Moscow's isolation from the West over Ukraine prompts it to turn to Beijing. The adds a measure of uncertainty to OPEC's oil policies, which boosted prices in global oil markets after the news early Friday, though analysts say the kingdom is unlikely to change its strategy and reduce production. That is despite a global glut of crude that is fueling new rivalry between OPEC and Russia for China's market--as well as among OPEC nations themselves. Officials of the Organization of the Petroleum Exporting Countries, which declined to cut oil production last year, reasoned that maintaining high production levels would protect market share in crucial importing nations. But Chinese customs data released Friday show that China's crude imports from some big OPEC nations have plummeted, while imports from Russia surged 36% in 2014. Meanwhile, imports from Saudi Arabia fell 8% and those from Venezuela dropped 11%. As American companies have pumped soaring amounts of oil from shale, U.S. imports of Saudi Arabia's crude oil and petroleum products have also fallen, dropping to 25.6 million barrels a month in October, from more than 42 million barrels a year earlier. The changing pattern in China's imports is one result of Russian President Vladimir Putin turning to China as an economic lifeline as Moscow is shunned by the West over the Ukraine crisis. That has tilted in China's favor the relationship between two countries that for decades have jousted for influence in Asia. For its part, Beijing wants to make sure Russia's economy doesn't deteriorate further as that could threaten stability on China's borders, security scholars say. In addition, buying more of its oil from Russia helps China lessen dependence on seaborne imports from the Middle East, which it fears are susceptible to supply disruptions. An early sign of the thaw came in May, when Mr. Putin and Chinese President Xi Jinping sealed a long-hobbled deal for Russia to supply China hundreds of billions of dollars in natural gas. Since then, Chinese banks have come through with loans for Russian companies ailing under U.S.-imposed sanctions and Russia has even signaled it might be willing to accept a Chinese stake in one of Russia's biggest new oil fields. Security analysts and some western diplomats say the governments remain wary of each other. Russian crude shipments to China reflect a marriage of necessity as Moscow seeks to tap new markets for its oil, but doesn't mean leaders have overcome decades of mistrust. But Messrs. Xi and Putin have strived to appear warm during frequent bilateral meetings, smiling as they have toasted to the relationship with a shot of Chinese baijiu. The rise in Russian imports to China comes as OPEC members themselves are competing for bigger roles in Asia as demand from the U.S., for years their biggest market, has dwindled as the result of the North American shale-oil boom. In the past year, Saudi Arabia and Iraq--OPEC's biggest oil producers--have slashed prices for Asian buyers, a move viewed by many commentators as a tactic to gain market share as global consumption shifts east. Asia demand accounts for roughly 70% of Saudi crude exports, according to the U.S. Energy Information Administration. A closed-door meeting in November between Saudi Arabia's Oil Minister Ali al-Naimi and senior oil officials from Russia, Venezuela, and Mexico illustrated the oil-producing cartel's growing concern over Russia's role. When Russia rejected a suggestion that non-OPEC members participate in a move to cut production and prop up prices, Saudi Arabia abandoned any plans to rein in its output, opting instead to fight to maintain its position in the market, according to people familiar with Saudi thinking. OPEC declined to comment. Of course, OPEC nations, and in particular Saudi Arabia, will continue exporting huge amounts of crude oil to China over the long run. Domestic oil production in China has plateaued even as demand continues to rise. Saudi Arabia remains China's largest source of imported crude. Nevertheless, China's "diversification toward Russia has been a concern" for Saudi Arabia, said Sushant Gupta, an analyst at energy consultancy Wood Mackenzie. "They want to protect the market share in the growing-demand regions of Asia." The new data show Saudi Arabia's market share in China fell versus Russia's last year. Russian oil accounted for about 11% of Chinese imports in 2014, versus about 9% a year earlier, while Saudi Arabian crude fell to roughly 16% of total Chinese crude imports from 19% a year earlier. For poorer countries, such as Venezuela, whose economy is highly dependent on oil sales, the shift in Chinese imports adds to the pain from falling oil prices, said James Henderson, a senior research fellow at the Oxford Institute for Energy Studies. Venezuelan President Nicolás Maduro traveled to Beijing this month as part of a world-wide tour seeking aid, during which he said he secured $20 billion in unspecified Chinese investment, although analysts say that isn't nearly enough to cushion the impact of oil's fall. And the rise in Chinese imports of Russian crude will continue. The flow of Russian crude to China will surpass 50 million tons annually by 2020, from more than 30 million tons in 2014, forecasts Wood Mackenzie's Mr. Gupta. Portions of that will flow through Central Asia, a region where Chinese companies have built a huge presence, eager to tap growing energy trade. But the region of former Soviet republics remains deeply intertwined with Russia, another reason for China to worry about Moscow's economic health. In September, China's Kunlun Energy, a subsidiary of PetroChina Co., reported a foreign-exchange loss of nearly $65 million following a devaluation of the tenge, Kazakhstan's currency. China has concerns that increased volatility in Moscow could pose challenges for Chinese interests in Central Asia, said Niklas Swanstrom, director of the Stockholm-based Institute for Security & Development Policy. While Russia has long wanted to sell more crude to China, its government and companies have been far less willing over the years to welcome Chinese investment in its oil and gas fields. Even that is beginning to change. When President Putin visited Beijing in November, chiefs of China National Petroleum Corp., China's biggest producer of oil, and Russia's Rosneft laid the groundwork for CNPC to take a stake in Rosneft subsidiary ZAO Vankorneft, which is developing one of Russia's biggest new oil fields. Sarah Kent, Summer Said and Yang Jie contributed to this article. Write to Brian Spegele at Credit: By Brian Spegele
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647501000
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Prices Slide to Six-Year Low; Death of Saudi King Unlikely to Alter Saudi Oil Policy
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
Saudi Arabia, the world's largest oil exporter and the second-largest crude producer after Russia, has set the tone for policy by the Organization of the Petroleum Exporting Countries, which failed to agree on a plan to reduce output at its November meeting and isn't scheduled to meet again until June. [...]in China, the preliminary HSBC China Manufacturing Purchasing Managers Index rose to 49.8 in January, compared with a final reading of 49.6 in December, HSBC Holdings PLC said Friday.
Full text: U.S. oil prices declined to a new six-year low on Friday as investors bet that a change in Saudi Arabia's leadership was unlikely to alter the kingdom's policy of continuing to pump crude despite falling prices. A rally in the dollar also weighed on prices, and a closely watched gauge of China's economic activity continued to signal contraction, even as it showed slight improvement, leading some investors to fret about lower demand for oil. The U.S. benchmark ended the day down 72 cents, or 1.6%, at $45.59 a barrel, a six-year low, after rallying as much as 3% late Thursday . The global Brent benchmark ended the day up 27 cents, or 0.6%, at $48.79 a barrel, after gaining more than 2% late Thursday. Both contracts lost ground for the week, with the U.S. one falling 7.2%, much of that after U.S. oil inventory data on Thursday showed an unexpected increase of 10.1 million barrels in the week ended Jan. 16. Even as oil prices have plummeted more than 55% since last June amid rising global supplies and weak demand, Saudi Arabia has kept output steady in a bid to protect its market share rather than cut production to shore up prices. Traders speculated that stance could change after King Abdullah's death was announced late Thursday, but the new king quickly made clear he would maintain existing policy and . Saudi Arabia, the world's largest oil exporter and the second-largest crude producer after Russia, has set the tone for policy by the Organization of the Petroleum Exporting Countries, which failed to agree on a plan to reduce output at its November meeting and isn't scheduled to meet again until June. "People quickly assessed the changeover in leadership in Saudi Arabia right now does not portend any change in their oil policy," said Eugene McGillian, senior analyst with brokerage Tradition Energy in Stamford, Conn. Meanwhile, the dollar continued to climb Friday, extending a rally since last spring that has seen it gain 17% against a basket of global currencies in the ICE Dollar Index. Analysts cited the dollar's continued gains Friday as a factor in weakening oil prices; a stronger dollar weighs on oil by making it more expensive for buyers using foreign currencies. And in China, the preliminary HSBC China Manufacturing Purchasing Managers Index rose to 49.8 in January, compared with a final reading of 49.6 in December, HSBC Holdings PLC said Friday. Still, the gauge of manufacturing activity remains below 50, indicating shrinking output. China is the world's second-largest oil consumer after the U.S., and traders closely watch economic activity there for signals about demand. In refined products, gasoline futures for February delivery gained 1.71 cents, or 1.3%, to settle at $1.3479 a gallon. February diesel gained 0.88 cent, or 0.5%, to end at $1.6467 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Petroleum industry; Purchasing managers index; Economic activity
Location: United States--US China Saudi Arabia
Company / organization: Name: HSBC Holdings PLC; NAICS: 523120, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647501034
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Overheard: Royal Roils Oil
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
"There appears to be broad support within the ruling family for the current policy," according to Raad Alkadiri, a managing director at IHS Energy.
Full text: Even rumors about the health of Saudi Arabia's king sets hearts racing in the oil market. And, indeed, oil futures jumped a few percentage points when news of King Abdullah's death broke late Thursday. Yet there seems little real basis for this. A successor was announced simultaneously. And it is unclear why this would cause Saudi Arabia to abandon its current oil strategy and reduce production. "There appears to be broad support within the ruling family for the current policy," according to Raad Alkadiri, a managing director at IHS Energy. "Moreover, there is no cacophony from the rest of OPEC demanding immediate change. So there is no immediate pressure, inside or outside, for a policy change," he says. Indeed, cutting output now would simply support prices to the benefit of Saudi Arabia's higher-cost rivals. As if to emphasize why the kingdom should hold the line, U.S. energy officials announced that America's commercial stockpile of crude oil had hit its highest level for this time of year in at least 80 years--roughly as long as Saudi Arabia has existed.
Subject: Petroleum industry
Location: United States--US Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647501249
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647501249?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Death of King Won't Alter Saudi Oil Policies
Author: Gold, Russell; Friedman, Nicole; Cook, Lynn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]23 Jan 2015: C.1.
Abstract:
Saudi Arabia controls more than 15% of the world's proven oil reserves and vies with Russia and the U.S. for the title of biggest petroleum producer in the world.
Full text: Saudi Arabia has charted a long-term course to drive down oil prices and maintain its major share of the global market -- and a change of who is on the throne in Riyadh won't likely alter this course, energy experts said. Even after the death of King Abdullah, announced early Friday Saudi time, the kingdom is likely to continue to pump crude in the face of a global glut of crude, which has helped push prices down by more than 55% since last June. Surrounded by unrest and uncertainty in the Middle East, Saudi Arabia is protecting itself by exploiting its big advantages -- huge oil reserves and low-cost crude production, said Sarah Emerson, principal of ESAI Energy LLC in Boston. "They need to make sure they have enough market share for not just tomorrow but 2040 and 2060 and beyond to ensure longevity," Ms. Emerson said. The Saudis embarked on this new strategy in reaction to the U.S. oil boom, and it is a new status quo that won't change under a new king, she said. That doesn't mean that in the short term, oil traders won't be nervous about the ascension to the throne of Crown Prince Salman, or that oil markets won't be volatile. Crude-oil futures rebounded in Asia early Friday, trading at $47.10 a barrel, up from a settlement price of $46.31 a barrel on the New York Mercantile Exchange Thursday. Brent crude on London's ICE Futures exchange was up 84 cents to $49.36 a barrel. Investors who had bet on lower prices likely closed out positions on the chance that the king's death could lead to a change in Saudi Arabia's stance, said Nader Naeimi, a fund manager in Sydney, at AMP Capital, which oversees more than $120 billion in assets. "Given how far oil has fallen, markets are increasingly responsive to any kind of news that may be positive for prices," he said. "Whether it is going to be durable isn't clear for now." The country's current strategy has the backing of its powerful oil minister, Ali al-Naimi, so investors and traders will be watching for the possibility that a change of oil ministers could be afoot. Some Saudi experts say it is unclear if the behind-the-scenes power struggle over who has influence over King Salman is finished and whether the kingdom's princes have coalesced around him. "Despite efforts in Riyadh to make everything appear smooth, there are some big questions out there," said Simon Henderson, director of the Gulf and Energy Policy Program at the Washington Institute. Saudi Arabia controls more than 15% of the world's proven oil reserves and vies with Russia and the U.S. for the title of biggest petroleum producer in the world. As American companies have pumped soaring amounts of oil from shale, Saudi Arabia's exports to the U.S. have fallen, dropping to 25.6 million barrels a month in October. But it remained the third-largest supplier to the U.S. after Canada and Mexico, according to the U.S. Energy Information Administration. After oil prices began dropping from their triple-digit peak in late June, traders looked to Saudi Arabia to cut production to prop up prices, as it did in the 1980s. But in November, the Organization of the Petroleum Exporting Countries voted to keep pumping the same amount of oil, and that isn't likely to change soon, said Amy Myers Jaffe, an energy observer at the University of California Davis. --- Shani Raja and Eric Yep contributed to this article. Credit: By Russell Gold, Nicole Friedman and Lynn Cook
Subject: Royalty; Energy policy; Crude oil
Location: Saudi Arabia
People: Abdullah, King of Saudi Arabia
Classification: 9178: Middle East; 1520: Energy policy
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 23, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647594786
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
GE Profit Boosted by Industrial Unit but Drop in Oil Creates Ripple Effect; Company Braces for Deepening Trouble to Come in Oil and Gas Business
Author: Mann, Ted; Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
[...]work continues on GE's biggest priorities for the year: completing the $17 billion purchase of the energy assets of Alstom SA, and splitting off GE Capital's consumer finance business, Synchrony Financial, as one of the largest steps toward reducing the size of the lending arm, executives said.
Full text: General Electric Co.'s oil and gas business managed to blunt the hit from plunging prices of crude, but the company is bracing for deepening trouble in the months ahead. In the final three months of 2014, orders fell 10% in GE's oil and gas business, including a 72% decline in orders for such drilling equipment as blowout preventers. The company said it hasn't yet had to negotiate lower prices for its backlog of orders. But customers are starting to call, as they look to curtail projects, lay off workers and trim costs. "That's to come in 2015," Chief Financial Officer Jeff Bornstein said. For the past decade, GE Chief Executive Jeff Immelt has built a sizable oil and gas operation, which accounted for 17% of its industrial revenue last year. Plunging oil prices have led GE executives to warn of a drop in both revenue and profit this year at the once fast-growing unit. Mr. Immelt said he had received some initial letters about the pricing of previously booked orders for GE's oil exploration and production equipment, though so far the company hasn't faced an onslaught of demands for a drop in prices. "This is early days," he said. The 6% revenue decline in its oil and gas business last quarter over a year earlier was offset by better results in other parts of its industrial portfolio, such as jet engines, power-generation equipment and locomotives. Industrial revenue climbed 6% over a year-earlier as the Fairfield, Conn.,-based company continued a multiyear effort to wean itself off earnings from its massive financial arm, GE Capital, and returned focus to its heavy-industry core. For the quarter ended Dec. 31, GE's earnings rose to $5.15 billion from $3.21 billion. Revenue climbed 4% to $42 billion. Shares of GE were up less than 1% to $24.48 at 4 p.m. Friday in New York Stock Exchange trading. Meanwhile, work continues on GE's biggest priorities for the year: completing the $17 billion purchase of the energy assets of Alstom SA, and splitting off GE Capital's consumer finance business, Synchrony Financial, as one of the largest steps toward reducing the size of the lending arm, executives said. Mr. Bornstein confirmed GE has agreed to pay more for Alstom's energy businesses, pegging the additional cost at roughly $280 million. That cost includes extending the term of GE's licensing deal to use the Alstom brand to 25 years from an originally anticipated five years. Alstom CEO Patrick Kron has said GE will contribute about the equivalent of $450 million in "additional proceeds" as part of the negotiations after the deal. Mr. Bornstein said the difference between the two figures can be explained in part because Alstom is counting roughly $112 million of potential interest charges it would have paid on cash GE allowed the cash-starved French company to use last year. GE hopes to close the Alstom deal on July 1, Mr. Immelt said. GE warned investors last month that revenue and profit in its oil and gas unit could fall as much as 5% each in 2015, as the overall industry contracts. GE officials have also said aggressive cost reductions could be coming. "I'm sure we'll have some of those discussions with some of our customers just as we'll be having some of those with some of our suppliers," Mr. Bornstein said of renegotiating some oil and gas orders. Company executives also believe they will be well positioned to expand their market share in equipment and services because some of the largest customers will continue to pump oil through the downturn, maintaining demand for GE's products. Write to Ted Mann at and Chelsey Dulaney at Credit: By Ted Mann and Chelsey Dulaney
Subject: Corporate profits; Petroleum industry
People: Kron, Patrick
Company / organization: Name: Synchrony Financial; NAICS: 522210; Name: New York Stock Exchange--NYSE; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647611910
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eni Investments Hit by Oil-Price Plunge; Italian Oil Major to Cut Costs by Between 10% and 15%
Author: Barker, Thorold; Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
Eni will cut costs by between 10% and 15%, in line with the rest of the industry, she said in an interview with The Wall Street Journal at the World Economic Forum in Davos.
Full text: DAVOS, Switzerland--Eni will postpone investments in its most costly projects as the Italian oil major seeks to mitigate the effects of the recent plunge in oil prices, Chairwoman Emma Marcegaglia said. Eni will cut costs by between 10% and 15%, in line with the rest of the industry, she said in an interview with The Wall Street Journal at the World Economic Forum in Davos. "We started five months ago to cut costs...we will continue to do it," Ms. Marcegaglia said. "We also decided to concentrate on our core business, on upstream." With a quick rebound in oil prices not considered likely, Eni, like its peers, has been forced to delineate a long-term plan to soften the new reality of crude at under $50 a barrel. The effects of the more-than 50% plunge in the price of crude since June will begin to show up in oil companies' fourth-quarter results, the first of which will come out next week. Eni has managed to obtain better terms--discounts of as much as 30% compared with the recent past--on new contracts with its contractors and the governments in the countries where it operates, Ms. Marcegaglia said. Ms. Marcegaglia also spoke about European tax policy, saying that there should be more transparency and communication between countries, but she warned against what she called the danger of harmonizing tax rates on the high end. "The base on which you tax you can have some harmonization, but on the level I think some competition is always a good thing," she said. Germany is likely to benefit the most from the European Central Bank's monetary easing announced Thursday, with Italy and Spain also among the big gainers, Marcegaglia said. Write to Thorold Barker at and Eric Sylvers at Credit: By Thorold Barker And Eric Sylvers
Subject: Petroleum industry; Tax rates; Crude oil prices; Economic summit conferences
Location: Switzerland
Company / organization: Name: European Central Bank; NAICS: 521110; Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647666719
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Is It Time to Invest in Energy Stocks? With Oil Prices at a Six-Year Low, Here Are the Options for Investors--and the Risks
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
While blue-chip names like Exxon Mobil have offered energy investors some insulation from volatile oil prices, producers and service companies are more vulnerable to the tumult--but have more to gain should oil prices stage a rebound. The upheaval has sent many pros seeking shelter in integrated oil companies--blue-chip energy firms that control the wells that draw crude from the ground and the refineries that turn it into fuel.
Full text: The sharp fall in oil prices has wreaked havoc on shares of energy companies, leaving investors to decide whether now is the time to go bargain hunting. U.S. crude prices have fallen by more than half since June, trading at a six-year low of around $45 a barrel. For motorists filling up their tanks with sub-$2 gasoline, that has been a cause for celebration. But for investors in the energy sector, it has been a calamity. The S&P 500 Energy index, comprising the industry's largest companies, lost more than a fifth of its value over the six months through Thursday, the biggest decline of any of the 10 major sectors, according to FactSet. The broader S&P 500, by contrast, rose 4%. The pain has been worse for shares of smaller producers, many of which took on loads of debt to finance new drilling. A barometer of small energy companies, the S&P SmallCap 600 Energy index, has swooned 47% in the past six months. Experts warn that the wild swings in energy stocks could continue for some time. While blue-chip names like Exxon Mobil have offered energy investors some insulation from volatile oil prices, producers and service companies are more vulnerable to the tumult--but have more to gain should oil prices stage a rebound. Investors essentially have two ways to play the energy market: for stability and income, assuming the oil price stays at current levels or even dips more, and for growth, assuming a price rebound will come sooner rather than later. Here's what you need to know. Income and Stability Investors thinking about getting into the sector should have a stomach for volatility and an eye for the long run. Experts agree that oil prices will rise out of their doldrums eventually, but how long until a rebound takes place is a matter of fierce debate. This month, analysts at Bank of America said they expect U.S. oil prices to fall to $32 a barrel by the end of March before climbing to $57 by the end of the year. "You can't look at the sector and think you're going to be lucky enough to time the bottom," says Russ Koesterich, chief investment strategist at BlackRock, which manages $4.65 trillion. "You have to be thinking about it for the longer term, realizing you may see the stocks down 10% or 15% before they bottom." The upheaval has sent many pros seeking shelter in integrated oil companies--blue-chip energy firms that control the wells that draw crude from the ground and the refineries that turn it into fuel. They owe their stability to their diverse business mix and rock-solid balance sheets. Oil production is likely to keep growing, despite the decline in prices, thanks to advances such as hydraulic fracturing, or fracking. Earlier this month, the International Energy Agency said it expects nearly one million barrels a day of extra oil to be pumped around the world in 2015. Global economic growth, meanwhile, remains sluggish, damping growth in demand. Shares of Exxon Mobil are down just 10% in the past six months. Fellow Dow Jones Industrial Average component Chevron is off 18%--no picnic, but better than many rivals. "They are less of a pure play on oil," Mr. Koesterich says. "Relative to the rest of the sector, the correlation between the integrated [companies] and the oil price is much less." Steady dividends are an added benefit. The oil industry has seen downturns in the past, but neither Exxon nor Chevron, for example, has cut its dividend in decades. In a cash pinch, both would have plenty of room to curb share buybacks first, says Lysle Brinker, director of equity research at consultancy IHS Energy. The dividend is "the only reason, for some investors, why they own these stocks," Mr. Brinker says. Investors with an appetite for energy stocks, but not for stock-picking, have plenty of options among exchange-traded funds and actively managed mutual funds. The biggest energy-focused ETF is the $11 billion Energy Select Sector SPDR Fund, which tracks energy companies in the S&P 500. The fund charges annual fees of 0.16%, or $16 per $10,000 invested. Among mutual funds, the $10.1 billion Vanguard Energy Fund has weathered the downturn in oil prices better than its competitors, according to investment researcher Morningstar. It has lost 25% in the past six months, compared with a 29% drop among all energy funds. The fund charges annual fees of 0.38%. The Vanguard fund's relatively heavy tilt toward integrated energy companies and its lighter weighting of more beaten-down corners of the sector has helped its performance, Morningstar analyst Kevin McDevitt says. "You're getting the commodity exposure, you're getting the energy exposure, but you're not getting all the volatility that comes with it," he says. Another option: the $3.6 billion T. Rowe Price New Era Fund, which invests in the energy industry as well as miners and other resource producers. It weathered the crude downturn by boosting its holdings of integrated oil companies beginning last summer, Mr. McDevitt says. Over the past six months, the fund has lost 19%, compared with a 22% slide for the broader category of natural-resources funds. It charges an annual fee of 0.66%. Master Limited Partnerships Another popular energy bet for income-hungry investors has been master limited partnerships, the pipeline and storage firms that earn their keep transporting and storing oil and natural gas. MLPs pay most of their earnings to shareholders, a draw for income-starved buyers. And since they focus on storing and moving products, MLPs are seen as more insulated from turbulent prices. The Alerian MLP index, a barometer of the industry, yields 6.16%, compared with less than 2% on 10-year government debt. But the index has lost 14% of its value over the past six months, making MLPs far from immune to oil's tumble. "A lot of people have gone out and said [MLPs] are uncorrelated to oil prices, but that's simply not true," says Richard Bernstein, head of the $3.4 billion firm Richard Bernstein Advisors in New York. As long as U.S. energy demand holds up, oil will continue to flow through the pipes and MLPs will remain a good investment, says Simon Lack, founder of investment-advisory SL Advisors in Westfield, N.J. Indeed, fuel demand is on the rise over the past year, according to the Energy Information Administration. "The biggest fear for MLP investors is demand destruction, and we're in the complete antithesis of that," Mr. Lack says. "If anything, lower energy prices are going to result in more demand, not less." But MLPs could see more pain if their oil-company customers start demanding lower prices, Mr. Bernstein says. Investors have an array of options when it comes to MLP funds, including the $9.1 billion Alerian MLP ETF. Another popular option: the $5.6 billion JPMorgan Alerian MLP Index exchange-traded note. Both charge annual fees of 0.85%. Investing for a Rebound If giant oil companies and MLPs are partly insulated from oil's tumble, they also are less likely to climb as quickly should crude stage a big rebound, experts say. With U.S. output still rising and the global economy in low gear, that rally still could be a long way off. But that doesn't mean prices will stay under $50 forever. When and if they rebound, exploration-and-production, or E&P, companies will likely be among the first to benefit. To date, they have been among the hardest hit. A widely tracked gauge of E&P stocks, the S&P 500 Oil & Gas E&P index, has fallen 28% in the past six months. "Nobody is making money at the $45-a-barrel level," says Norman MacDonald, portfolio manager of the $991 million Invesco Energy Fund. But that means supply has to decline and prices will rebound eventually. "It's a very self-correcting mechanism," he says. The cost of producing oil varies widely from place to place, even in North America, where wells are newer and production costs typically higher. Among Mr. MacDonald's biggest holdings are Devon Energy, Canadian Natural Resources and Ultra Petroleum. All are producers concentrated in North America but with relatively lower costs of production. "If oil stays at $55, $60 a barrel, they will survive," he says. John Dowd, who runs the $2 billion Fidelity Select Energy Portfolio, says he is paying closer attention to the quality of the underlying company assets when deciding when to buy, instead of focusing on traditional valuation metrics such as price/earnings ratios--in large part because both prices and earnings are in such upheaval, he says. "You want to buy an energy stock when the outlook is dark and dreary, and right now it's pouring," he says. One temptation investors should avoid, experts say, is betting on the price of oil directly, which can be done via oil futures contracts or ETFs that invest in them, such as the $1.4 billion United States Oil Fund, which charges annual expenses of 0.76%. The concern: Oil-futures contracts expire monthly, requiring investors to roll into the subsequent month's contract on a regular basis. This process can take a big bite out of returns when the longer-term contract is more expensive than the expiring contract, as is the case now. At current prices, that penalty amounts to a 12% erosion of annual returns, according to John Gabriel, a strategist at Morningstar. "For an individual investor, I would never really recommend getting involved with the commodity itself, because it's kind of the Wild West," says David Kelly, chief global strategist at J.P. Morgan Asset Management. Playing the Field An E&P-heavy bet can be played with the $1.4 billion SPDR S&P Oil & Gas Exploration & Production ETF, which charges an annual fee of 0.35%. Another option is the $445 million iShares U.S. Oil & Gas Exploration & Production ETF, which levies a 0.43% annual charge. When oil producers are feeling the pinch of cheaper crude, one of the first things they do is cut their spending. That translates to lean times for oil-field service providers such as Schlumberger, Baker Hughes and Halliburton--the firms that lease the drills, blast open the wells and service the equipment that makes the oil flow. The S&P 500 Oil & Gas Equipment & Services index has plunged 32% over the past six months. Analysts at Barclays say capital expenditures by energy companies are set to fall 9% this year, the first spending drop in six years. But like exploration-and-production firms, service companies stand to gain from a rally in oil. "A more aggressive investor that thinks there's going to be a rebound would probably go with the service providers and the equipment providers, because those guys have been hit the hardest but stand to rebound the most," Morningstar's Mr. Gabriel says. Mark Dawson, chief investment officer at Seattle-based Rainier Investment Management, says he cut his holdings of energy stocks as they rose and fell last year. Today, the percentage of investments the $6.7 billion firm allocates to energy is in the mid- to low-single digits, he says. But one stock the firm has held on to is Schlumberger, because of the service giant's global footprint and strong assets. "Any stabilization in the energy market, this would be at the top of the list to either add to or build back up," he says. Fund investors can make a concentrated bet on oil services with the $1 billion Market Vectors Oil Services ETF, which charges an annual fee of 0.35%. Write to Dan Strumpf at Credit: By Dan Strumpf
Subject: Energy industry; Petroleum industry; Energy; Investments; Stocks; Crude oil prices; Petroleum production; Hydraulic fracturing
Location: United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Bank of America Corp; NAICS: 522110, 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647666856
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647666856?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudi King Faces Economic Challenges as Reign Begins; Expanding Youth Population, Oil Reliance and Lavish Government Entitlements Pose Problems
Author: Fitch, Asa
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
Saudi Arabia's new king faces a thorny set of economic and social challenges as his reign begins, especially as falling oil prices limit the government revenue available for such efforts as fighting terrorism and avoiding domestic unrest.
Full text: Saudi Arabia's new king faces a thorny set of economic and social challenges as his reign begins, especially as falling oil prices limit the government revenue available for such efforts as fighting terrorism and avoiding domestic unrest. The problems facing King Salman include a large and rapidly growing youth population for whom there aren't enough jobs, an and a system of entitlements that has grown more lavish amid the regional political upheaval of the past four years. As the Arab Spring revolutions spread across the region in 2011, Saudi Arabia raised spending on social projects, subsidies and entitlements, helping placate its population of about 29 million. King Salman, 79, is of the same generation as his predecessor. He didn't signal any shift as he took charge of some government functions in recent months when the former king was on his deathbed. "Salman won't have a markedly different approach to the economy than if Abdullah continued, but he will have to deal with changing economic realities, such as the drop in oil prices," said Ghanem Nuseibeh, the founder and director of Cornerstone Global Associates, a political risk consultancy that focuses on the Middle East. Mr. Nuseibeh said he didn't expect the existing system of entitlements would be curtailed in the immediate future. Saudi leaders have long recognized diversification of the economy away from oil production and public sector jobs is an imperative. Oil and gas production and refining accounted for almost half of economic activity in 2013, according to the most recent Saudi central bank figures. Economists say measures to fix the imbalance aren't likely to accelerate under King Salman, though investment in natural resource-linked sectors like petrochemicals and fertilizers will continue. If Saudi Arabia is to grow its private sector, economists say the country must reverse its pattern of public spending, something King Abdullah was reluctant to do against a backdrop of regional political instability. Salary increases for government employees and government-built housing have recently taken precedence over private-sector employment. "Boosting private sector growth cannot be achieved through increased government spending--rather the opposite," said Giacomo Luciani, an energy expert at Sciences Po in Paris, who said the government needs to pressure the private sector to deliver its part. Efforts to bring in new income streams to support government spending when oil prices have fallen haven't succeeded. "They need non-oil revenues because at the current level of spending they will be in a structural deficit," said Steffen Hertog, a lecturer at the London School of Economics who focuses on Gulf political economics. "They have a big war chest to draw on for the next decade or so, but then things will get tight, and you need to build up a taxation system. Taxation is political anathema in Saudi Arabia." King Salman's other challenge is the country's youth glut. About 47% of the population is under 25, setting the stage for a demographic shift that Saudi Arabia's system of surefire government employment for citizens isn't equipped to handle. Currently non-Saudi nationals dominate the private sector. King Abdullah tried to shift this dynamic by enforcing quotas that require private companies to employ Saudis and through changes in labor laws in 2013 that blocked foreigners from running businesses independently of a local sponsor. Nonetheless, the International Monetary Fund noted in June that "the incentives and opportunities for Saudis to participate in the private sector remain low given the higher wages and benefits available in the public sector." It said that moving toward a diversified economy "will likely require a change in these incentive structures." Economic policy toward foreign investment became more open under King Abdullah, an attitude that Mr. Nuseibeh said would continue under King Salman, who he said is surrounded by advisers who favored free-market policy. The country's market regulator last summer announced that its stock market would open to direct foreign investment for the first time, although the move has yet to be enacted. Mr. Luciani, however, was skeptical that the drive to bring in more foreign investment would persist under King Salman. "I believe there is considerable diffidence toward foreign investors as being purely opportunistic, jumping in when the time as good and being the first to exit when the tide turns," he said. "Such diffidence won't change." Write to Asa Fitch at Credit: By Asa Fitch
Subject: Petroleum industry; Public sector; Private sector; Taxation; Politics; Political risk; Petroleum production
Location: Saudi Arabia
Company / organization: Name: Sciences Po; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647719182
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647719182?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Has No Easy Cure for Shale; Low Oil Prices May Cause U.S. Shale Drillers to Retreat
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
[...]surveying around 50 North American exploration and production companies that have issued guidance so far, Tudor, Pickering, Holt finds their aggregate capital expenditure budget for 2015 is about a third lower than last year.
Full text: OPEC insists it isn't out to kill the U.S. shale boom. Yet shale exploitation is worrisome for the cartel. It is a technological breakthrough that could spread to other countries. It is in the interests of the Organization of the Petroleum Exporting Countries to slow that process. The situation is analogous to chemotherapy: OPEC hopes low oil prices will curtail shale before they destroy its own finances. That explains why the death of Saudi Arabia's King Abdullah is unlikely to mean a shift in strategy. But OPEC could be in for a longer struggle than many expect. Oil's collapse is affecting drilling. By Jan. 23, the U.S. rig count had fallen by 15% since its most recent peak in September, according to Baker Hughes. Meanwhile, surveying around 50 North American exploration and production companies that have issued guidance so far, Tudor, Pickering, Holt finds their aggregate capital expenditure budget for 2015 is about a third lower than last year. Of rigs taken offline, though, only about 40% are classified as "horizontal," the mainstay of the shale boom. And despite lower budgets, production guidance in the TPH survey still calls for a 9% increase this year. This partly reflects shale's technological aspect and the potential for ongoing productivity gains. Citigroup estimates that even with a 40% cut to E&P budgets, a 10% productivity gain--slower than in recent years--would see U.S. output still rise by about 600,000 barrels a day this year. That is equivalent to two-thirds of the International Energy Agency's forecast of global demand growth. Even the weakest link in the E&P chain, highly indebted companies facing crimped cash flows and borrowing capacity, may not fall away quickly. Per Magnus Nysveen, senior partner at Rystad Energy, looked at 20 of the most indebted, midsize E&P firms--with debt to total assets of 50% or more--such as Oasis Petroleum and Halcon Resources. They amount to less than 10% of E&P spending and about 5% of U.S. oil output. Mr. Nysveen expects a slowdown in spending will curb supply growth and raise prices. But he is skeptical this will happen as soon as 2015's second half. At CreditSights, Brian Gibbons estimates that of 14 E&P high-yield borrowers he covers, only two will see output decline this year based on current prices. OPEC may have to dish out its pricing medicine for longer to achieve its shale aim--or, if Saudi Arabia chose to increase supply in an already glutted market, up the dosage. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Supply & demand; Capital expenditures; Budgets
Location: United States--US Saudi Arabia
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Oasis Petroleum Inc; NAICS: 211111; Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647743682
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647743682?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dueling Oil Benchmarks Converge in Their Price, but Diverge in Their Stories; Crude Measures Reflect Different Market Forces Playing Out in U.S. (as Told by WTI) and Globally (by Brent)
Author: Jo Craven McGinty
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
"The biggest was the Libyan situation," said John Felmy, the chief economist for the American Petroleum Institute, referring to the militias that have thrown the country into turmoil and paralyzed its oil industry, as well as losses in other areas like South Sudan.
Full text: The economic ripples caused by the free-falling price of oil in recent months have drawn wider public attention to the daily cost of a barrel of crude. But the figures traditionally used to convey global oil prices--the West Texas Intermediate and Brent crude benchmarks--measure different things and don't always line up. Today, for example, a barrel of oil costs $45 and change by and a few dollars more by . At times, the difference between the two has topped $20. Traders and economists are familiar with the reasons why WTI and Brent differ. For those newly curious about what falling oil prices mean, it's worth learning what the benchmarks reveal, and how they've changed over time. The basic reason why the numbers diverge is because they are snapshots of oil prices in different places: WTI reflects the U.S. and Brent the North Sea in Europe. At one time, they were equally good benchmarks of global crude. But as domestic production surged, WTI began to reflect the surprising domestic oil glut, which turned out to be more than the existing pipelines could handle. Crude oil is classified as light, medium or heavy, referring to the density of the liquid, and as sweet or sour based on its sulfur content. Light, sweet oil--which floats on water and is low in sulfur--is prized because it requires less processing to convert it into usable products. WTI and Brent are both light, sweet crude oils. "If somebody wanted to buy heavier or more sour crude, they could say what's Brent? OK, I'll give you Brent minus $2.50." said James Preciado, who analyzes futures markets and energy prices for the U.S. Energy Information Administration. Traditionally, prices for the two have tracked closely and they've been quoted interchangeably as benchmarks. But the U.S. shale oil boom upended the relationship, throwing the WTI's usefulness as a global barometer into question. Before the boom, the U.S. produced about five million barrels of crude oil a day and imported about 18 million barrels. Much of the imported oil moved from the Gulf Coast to Cushing, Okla., a major crude oil hub in North America and the delivery point for WTI. When the boom hit, domestic production rapidly increased by 4 million barrels a day, flooding Cushing and overwhelming the pipelines, which were not equipped to move large volumes of crude to Texas. "They could push it upstream but not to the Gulf Coast," Eric Lee, an energy analyst with Citigroup said. "The storage tanks filled up, and prices dropped significantly." Meanwhile, several factors increased demand for Brent crude, keeping its prices high relative to WTI and cementing Brent as the more accurate global benchmark. "The biggest was the Libyan situation," said John Felmy, the chief economist for the American Petroleum Institute, referring to the militias that have thrown the country into turmoil and paralyzed its oil industry, as well as losses in other areas like South Sudan. "We lost 3% of the world supply. You might look at it and say 3% is not very much. It can mean a 30% change in prices." To address the bottleneck, the 500-mile Seaway pipeline reversed the direction of its flow to carry crude from the Cushing site to Texas. A twin pipeline was constructed, doubling the pipeline's capacity to about 850,000 barrels a day. And a segment of the Keystone pipeline was built with the potential to transport about 830,000 barrels a day to Gulf Coast refineries. With WTI crude moving through the pipes, the spread between the benchmarks began to narrow, and displaced imports contributed to the lessening gap. Countries in "West Africa, Latin America and the Middle East lost market share in the U.S.," Mr Lee said. "Oil they had exported to the U.S. has to go somewhere else in the world." The U.S. still has an oversupply of crude, he added, but for now the rest of the Atlantic Basin--which includes the North Sea--is even more oversupplied, and that is pushing Brent prices down to meet WTI. "It becomes a buyers' market. There is downward pressure on the price," Mr. Lee said. After about six months of steep decline, the two benchmarks are once again more closely aligned, although the U.S. product has lost its status as a global benchmark. "Nowadays, the WTI is much more associated with U.S. domestic production and U.S. domestic prices," Mr. Preciado said. "Brent is seen as an international benchmark." That doesn't mean one is more important than the other. But the benchmarks now tell different stories. Write to Jo Craven McGinty at Credit: By Jo Craven McGinty
Subject: Crude oil; Petroleum industry; Pipelines; Benchmarks; Crude oil prices; Sulfur content
Location: United States--US
Company / organization: Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647743950
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647743950?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Al-Naimi Likely to Remain Saudi Oil Minister Until Market Calms; Riyadh Is Eager to Signal Stability and Consistency in Oil Policy Following King Abdullah's Death
Author: Said, Summer; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract: None available.
Full text: Saudi Oil Minister Ali al-Naimi is likely to stay in his position until current oil-market turbulence subsides, according to Saudi and Persian Gulf oil officials familiar with the matter--with Riyadh eager to signal stability and consistency in its oil policy following the death of King Abdullah. After Abdullah's death early Friday, oil prices shot higher before settling back down, as traders weighed whether the newly installed King Salman might alter oil policy for the world's largest crude exporter. King Salman early Friday issued a royal decree retaining all of the kingdom's current ministers, according to the official Saudi Press Agency. Appearing on Saudi national television, the new king said he would maintain the policies of his predecessor. That, Saudi and Gulf officials said, includes oil policy and retaining Mr. Naimi. King Salman "realizes how important Naimi is, and how the oil market respects him," according to one Saudi official. "So, we are unlikely to see a change in the short term." Mr. Naimi, reached on his cellphone late Friday, declined to comment on his future. Sarah Kent contributed to this article. Write to Summer Said at and Benoît Faucon at Credit: By Summer Said and Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647744160
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647744160?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cal Dive Preparing Chapter 11 Filing; Filing Could Come in Next Few Weeks as Rout in Oil Prices Hit Company
Author: Jarzemsky, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Jan 2015: n/a.
Abstract:
Cal Dive has been seeking to sell assets and refinance some of its $286 million debt load, but warned this month it was evaluating bankruptcy and that it had skipped an interest payment on $2.2 million worth of convertible bonds, starting the clock on a 30-day grace period for a default on the notes.
Full text: Oil-and-gas contractor Cal Dive International Inc. is preparing for a potential Chapter 11 bankruptcy filing that could come as soon as the next few weeks, people familiar with the matter said, as the oil-price rout exacerbates the company's business challenges. A filing isn't certain and depends in part on whether the Houston company can sell assets to raise cash, some of the people said. Cal Dive has been seeking to sell assets and refinance some of its $286 million debt load, but warned this month it was evaluating bankruptcy and that it had skipped an interest payment on $2.2 million worth of convertible bonds, starting the clock on a 30-day grace period for a default on the notes. The company, which sends divers under water to install and repair drilling platforms, pipes and other infrastructure, would be among the first energy-industry service providers to pursue an in-court debt reorganization since oil prices started dropping last summer. Commodity price shocks can leave these contractors particularly vulnerable, as the declines deter the construction of new wells and energy infrastructure by their clients. Cal Dive has also suffered longer term from sluggish shallow-water drilling and production activity. The oil selloff is now expected to cause energy exploration and production companies to "reduce 2015 budgets and rig activity to fall sharply," Sterne Agee & Leach Inc. analysts wrote in a December note to clients. Cal Dive, with a market capitalization of around $5 million, hasn't had a profitable year since 2009. It had $9.6 million in cash as of Sept. 30. Write to Matt Jarzemsky at Credit: By Matt Jarzemsky
Subject: Bankruptcy; Bankruptcy reorganization; Petroleum industry; Statistical data
Company / organization: Name: Sterne Agee & Leach Inc; NAICS: 523120; Name: Cal Dive International Inc; NAICS: 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 23, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647759335
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647759335?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Plunging Oil Prices Both Underpin and Threaten U.S. Policy Objectives; At Davos, Kerry Rallies Business and Political Elite to Fight Terrorist Groups
Author: Solomon, Jay
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Jan 2015: n/a.
Abstract:
Fueling the uncertainty, said U.S., Arab and European officials meeting at the annual World Economic Forum, was , King Abdullah--a central player in global energy policy and the fight against international terrorism.
Full text: DAVOS, Switzerland--Plunging global oil prices are both underpinning and threatening the foreign policy objectives of the Obama administration and its allies, who face what leaders assembled here described as a dangerous convergence of international crises. Fueling the uncertainty, said U.S., Arab and European officials meeting at the annual World Economic Forum, was , King Abdullah--a central player in global energy policy and the fight against international terrorism. "King Abdullah had a long history of being a brave partner with us and with the world not just in counterterrorism, but in his work on interfaith understanding," U.S. Secretary of State John Kerry told the conference. "We will miss his wisdom." Mr. Kerry rallied the world's business and political elite in Davos to marshal their resources to fight Islamic State and other terrorist organizations that he said posed the greatest collective threat to international order since World War II. "We have to get serious about investing in the things that really make a difference," Mr. Kerry said, also mentioning the political crisis in Yemen, home to a dangerous al Qaeda affiliate. "And make no mistake: If we don't make those investments today, we will pay far more for it down the road." The plunge in oil prices is imperiling the ability of some of Washington's Arab allies to fight Islamic State, even while the drop also undercuts the terrorist organization's revenues, according to U.S. and Arab officials. Energy powers Saudi Arabia, the United Arab Emirates and Qatar are part of the five-nation Arab coalition that has joined in U.S. airstrikes against Islamic State in Iraq and Syria. But all three governments have said in recent weeks that their budgets will be constrained with oil prices down to nearly $45 a barrel from over $100 last summer. Iraq, on the front lines of the war against Islamic State, has been particularly hard hit by the oil shock. Baghdad finances 85% of its budget through energy exports, according to Iraqi officials, who have called for more international assistance in recent days. "We don't want to see a reversal of our military victory due to our budget and fiscal problems, and we have been assured that every member of this coalition will stand with Iraq," Prime Minister Haider al-Abadi said Thursday following a meeting in London with Mr. Kerry and other world leaders. U.S. and Arab officials said they're closely watching the political transition in Saudi Arabia for its impact both on energy prices and the war against Islamic State. Saudi Arabia, the world's largest oil exporter, has maintained its production levels in recent months in a bid to maintain its market share and force out higher-cost producers in North America. The despite growing calls from other members of the Organization of the Petroleum Exporting Countries to cut output in a bid to stabilize prices. Saudi Arabia's new leader, King Salman, is expected to face continued pressure to slash production. But Saudi officials have stressed that they will maintain their policy. Riyadh also has provided significant financial support to other Arab states central to the fight against Islamic State, including Egypt and Jordan. More broadly, U.S. and European officials have voiced confidence in recent weeks that the oil-price drop could aid the West in conflicts with Iran and Russia. Top Obama administration officials have said in recent weeks that the impact of oil's fall on Iran and Russia has been even greater than the U.S. initially expected. Over the next six months, the U.S. Treasury Department estimates Iran will lose $11 billion in revenues if oil prices stay around $45 a barrel. This is on top $40 billion that Washington estimates Iran lost last year due to Western sanctions. "All of this is creating havoc with Iran's budget," the Treasury Department's top sanctions official, David Cohen, told Congress this week. "Next year will be even bleaker." Mr. Kerry met his Iranian counterpart, Javad Zarif, for an hour in Davos on Friday, according to the State Department. Russian officials in Davos conceded that the combination of Western sanctions on Moscow and lower oil prices have plunged their country in an economic crisis. But they warned that continued financial pressure won't cause the Kremlin to back down in Ukraine and could spark a broader conflict. "It will lead to a general worsening of relations between East and West," Andrey Kostin, president and chairman of Russia's VTB Bank, told a Davos audience Thursday. "It may mean Russia and the U.S. will have no relationship...It will be a very dangerous situation." Write to Jay Solomon at Credit: By Jay Solomon
Subject: Petroleum industry; Prices; Economic summit conferences
Location: Switzerland United States--US Saudi Arabia
People: al-Abadi, Haider
Company / organization: Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940; Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 24, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647763224
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Saudi Oil Minister Is Expected To Stay On
Author: Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Jan 2015: A.6.
Abstract:
Saudi Oil Minister Ali al-Naimi is likely to stay in his position until current oil-market turbulence subsides, according to Saudi and Persian Gulf oil officials familiar with the matter -- with Riyadh eager to signal stability and consistency in its oil policy as a new king takes the throne.
Full text: Saudi Oil Minister Ali al-Naimi is likely to stay in his position until current oil-market turbulence subsides, according to Saudi and Persian Gulf oil officials familiar with the matter -- with Riyadh eager to signal stability and consistency in its oil policy as a new king takes the throne. After King Abdullah's death early Friday, oil prices shot higher before settling back down, as traders weighed whether the newly installed King Salman might alter oil policy for the world's largest crude exporter. King Salman swiftly issued a royal decree retaining all of the kingdom's current ministers, according to the official Saudi Press Agency. Appearing on Saudi national television, the new king said he would maintain the policies of his predecessor. That, Saudi and Gulf officials said, includes oil policy and retaining Mr. Naimi. King Salman "realizes how important Naimi is, and how the oil market respects him," according to one Saudi official. "So we are unlikely to see a change in the short term." Mr. Naimi, reached on his cellphone late Friday, declined to comment on his future. The change at the top of the Saudi court presented a convenient opportunity for Mr. Naimi, 79 years old, to retire -- something people familiar with his thinking have said he has considered for years. Associates say his long and close association with the late king has been one reason he has stayed on for almost two decades. Amid the uncertainty surrounding a change of Saudi leadership, Mr. Naimi's presence at the ministry is expected to help reassure markets. "Naimi will stay around until the oil market calms down a bit," another Saudi official said. This summer's OPEC meeting -- the next regularly scheduled meeting of the group -- could offer an opportunity for Mr. Naimi to exit gracefully. The Organization of the Petroleum Exporting Countries -- a cartel of some of the world's biggest producers effectively led by Saudi Arabia -- has in the past reined in output to support prices during times of market weakness. But in November, amid sagging prices, Mr. Naimi convinced OPEC to hold pat, a move that sent crude tumbling. Booming global production -- led by soaring North American output -- has contributed to a glut. Amid the oversupply, Mr. Naimi and other OPEC officials have said the cartel wasn't going to sacrifice market share to non-OPEC producers. Saudi Arabia, with vast cash reserves built up over years of higher prices, can stomach the current market weakness better than higher-cost producers, including U.S. shale producers and Russia. "The kingdom wants to maintain market share regardless of the price," according to a Saudi official. "And the new king will continue with this policy even if prices fall further." In recent years, Mr. Naimi in particular has championed Saudi Arabia's role as keeping oil markets stable and well supplied. Credit: By Summer Said and Benoit Faucon
Subject: Supply & demand; Crude oil prices; Market shares; Cabinet; Petroleum production
Location: Saudi Arabia
People: Salman, King of Saudi Arabia Naimi, Ali I
Company: Organization of Petroleum Exporting Countries--OPEC
Classification: 8510: Petroleum industry; 9178: Middle East
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.6
Publication year: 2015
Publication date: Jan 24, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647791011
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Russia, China Warm Up Over Oil, Squeezing OPEC
Author: Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Jan 2015: A.7.
Abstract:
Faced with a global glut of crude, falling prices and lower demand from the U.S., oil-exporting nations are increasingly putting their hopes in the still-robust demand for crude in China, where domestic oil production has plateaued.
Full text: BEIJING -- Warming ties between Beijing and Moscow are giving a big boost to Chinese imports of Russian oil, to the chagrin of OPEC nations jockeying for a slice of China's market. Faced with a global glut of crude, falling prices and lower demand from the U.S., oil-exporting nations are increasingly putting their hopes in the still-robust demand for crude in China, where domestic oil production has plateaued. But Saudi Arabia and other big producers such as Venezuela have seen such sales drop as Moscow's isolation from the West over Ukraine prompts it to turn to Beijing. On its side, China regards Russia's economic health as important to regional security in Asia. The death of Saudi Arabia's King Abdullah is unlikely to change the kingdom's strategy and reduce production. Officials of the Organization of the Petroleum Exporting Countries, which declined to cut oil production last year, reasoned that maintaining high production levels would protect market share in crucial importing nations. But Chinese customs data released Friday show that its crude imports from some big OPEC nations have plummeted, while imports from Russia surged 36% in 2014. Imports from Saudi Arabia fell 8% and those from Venezuela dropped 11%. The changing pattern in China's imports reflects Russian President Vladimir Putin turning to Beijing as the economic impact of Western sanctions over the Ukraine crisis has worsened. For its part, Beijing wants to make sure Russia's economy doesn't deteriorate further as that could threaten stability on China's borders, security scholars say. In addition, buying more of its oil from Russia helps China lessen dependence on seaborne imports from the Middle East, which it fears are susceptible to supply disruptions. For decades the two countries jousted for influence in Asia. An early sign of the current thaw came in May, when Mr. Putin and Chinese President Xi Jinping sealed a long-delayed deal for Russia to supply China with hundreds of billions of dollars in natural gas. Since then, Chinese banks have come through with loans for Russian companies suffering under U.S.-imposed sanctions and Russia has even signaled it might be willing to accept a Chinese stake in one of its biggest new oil fields. OPEC members themselves are competing for bigger roles in Asia as demand from the U.S., for years their biggest market, has dwindled. As U.S. companies have drawn soaring amounts of oil from shale, U.S. imports of Saudi Arabia's crude oil and petroleum products have also fallen, dropping to 25.6 million barrels a month in October, from more than 42 million barrels a year earlier. In the past year, Saudi Arabia and Iraq -- OPEC's biggest oil producers -- have slashed prices for Asian buyers, a move viewed by many commentators as a tactic to gain market share as global consumption shifts east. Asia demand accounts for about 70% of Saudi crude exports, according to the U.S. Energy Information Administration. A closed-door meeting in November between Saudi Arabia's Oil Minister Ali al-Naimi and oil officials from Russia, Venezuela and Mexico illustrated OPEC's growing concern over Russia's role. When Russia rejected a suggestion that non-OPEC members participate in a move to cut production and prop up prices, Saudi Arabia abandoned any plans to rein in its output, opting instead to fight to maintain its position in the market, according to people familiar with Saudi thinking. OPEC declined to comment. For poorer countries, such as Venezuela, the shift in Chinese imports adds to the pain from falling oil prices. And the rise in Chinese imports of Russian crude is expected to continue, surpassing 50 million tons annually by 2020, from more than 30 million tons in 2014, says Sushant Gupta, an analyst at energy consultancy Wood Mackenzie. While Russia has long wanted to sell more crude to China, its government and companies have been far less willing over the years to welcome Chinese investment in its oil and gas fields. Even that is beginning to change. When President Putin visited Beijing in November, chiefs of China National Petroleum Corp., China's biggest producer of oil, and Russia's Rosneft laid the groundwork for CNPC to take a stake in Rosneft subsidiary ZAO Vankorneft, which is developing one of Russia's biggest new oil fields. --- Sarah Kent, Summer Said and Yang Jie contributed to this article. Credit: By Brian Spegele
Subject: Market shares; Petroleum production; Imports; Crude oil
Location: Saudi Arabia Russia China
People: Xi Jinping Putin, Vladimir
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910
Classification: 8510: Petroleum industry; 9180: International; 1300: International trade & foreign investment
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.7
Publication year: 2015
Publication date: Jan 24, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647791035
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon Fined $1.05 Million for 2011 Yellowstone Pipeline Break; Company Also Agrees to Settlement of Claims Related to Seven Private Properties Tied to Spill
Author: Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]24 Jan 2015: n/a.
Abstract:
Exxon Mobil Corp. must pay a $1.05 million penalty for safety violations related to a under Montana's Yellowstone River, federal regulators said Friday.
Full text: Exxon Mobil Corp. must pay a $1.05 million penalty for safety violations related to a under Montana's Yellowstone River, federal regulators said Friday. The pipeline was buried beneath the riverbed, but flooding amid a summer snow melt exposed it and stressed it to the breaking point. An estimated 1,500 barrels of oil spilled into the river and were carried miles downstream. The Yellowstone River is again the site of a major cleanup effort, after another pipeline break earlier this month about 230 miles east of Exxon's spill. It isn't yet clear what caused Bridger Pipeline LLC's Poplar pipe to fail under the river. The company now estimates that about 960 barrels--more than 40,000 gallons--spilled into the partially iced-over river. That incident for residents of the city of Glendive, Mont., but state officials said Friday that the water is once again safe to drink. In the case of the 2011 spill, Jeffrey Wiese, associate administrator of the Pipeline and Hazardous Materials Safety Administration, upheld a finding that Exxon hadn't adequately prepared for the possibility that flooding could cause the pipeline to fail--something that had happened to pipelines in the area in the past. Exxon had argued that its line had survived more severe floods intact and it didn't have reason to believe that the line was in danger. Exxon spokesman Christian Flathman said in a statement Saturday that Exxon is reviewing the agency's final order. The company has 20 days to ask the agency to reconsider the ruling. The agency found that Exxon complied with federal regulations and did take steps ahead of time to prevent and mitigate a potential spill in the area, withdrawing one of its against the company. That helped reduce the fine by nearly $700,000 from what the agency proposed in 2013. Also on Friday, Exxon agreed to a $2 million settlement of claims relating to seven private properties affected by the oil spill, said Jory Ruggiero, an attorney for the plaintiffs. "Exxon Mobil Pipeline Company committed to paying for the cleanup and all valid claims related to the incident. This settlement was an extension of that process," Mr. Flathman said. Exxon reached a $1.6 million settlement with the state of Montana in 2013 and agreed to reimburse the state for more than $760,000 in cleanup costs. Write to Alison Sider at Credit: By Alison Sider
Subject: Pipelines; Petroleum industry; Environmental cleanup; Oil spills; Settlements & damages; Floods
Location: Montana Yellowstone River
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 24, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647828070
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited wi thout permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Glut? Oil Refiners Pump Away
Author: Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Jan 2015: B.4.
Abstract:
[...]analysts are predicting an end to the recent streak of blowout earnings performances when refiners start reporting their results next week.
Full text: The global glut of crude oil is turning into a U.S. glut of gasoline. As oil prices have tumbled during the past few months, U.S. refiners have been sucking up as much of the abnormally inexpensive crude as they can, turning it into gasoline, diesel and other fuels. Prices at the pump have plunged to almost $2 a gallon, the lowest nationwide average in more than five years. Even though U.S. drivers are filling their tanks more often, they can't keep pace with surging gasoline supplies. So a lot of the fuel that refiners are producing is sitting in storage tanks. Gasoline inventories stood at 240.9 million barrels as of Jan. 16 -- the highest they have been at this time of year since at least 1990, according to federal figures released on Thursday. This has some refining experts scratching their heads. The fuel makers "are running at pell-mell rates that are not justified," said Tom Kloza, head of energy analysis at the Oil Price Information Service. But before they cut back, he added, "Refiners are going to have to basically say, we're just choking on it." All of this is great for American drivers. The U.S. Energy Information Administration expects gasoline prices to average $2.33 this year, down 31% from 2014. It predicts the average U.S. household will spend roughly $750 less on gasoline this year. Companies that do the expensive work of discovering oil and extracting crude from the ground are cutting spending amid the slide in oil prices, which are down about 55% since June. But heading into the late winter months when many refiners perform maintenance work, refiners ran their equipment full out. Over the four weeks ended Jan. 16, refiners processed an average of 15.9 million barrels of oil a day -- relatively high for this time of year -- and used more than 91% of their operating capacity. On the whole, refiners slowed production sharply last week. But gasoline output still rose, and stockpiles of the fuel still grew to a level that the EIA said is well above the typical mid-January range. Refiners have been doing this even though the margin between what they pay for crude and what they get for gasoline was negative in some of the country during parts of last month. "The mentality is, 'I'm not making as much money as I'd like to, but if I cut the only thing that will happen is that everybody else is going to be making more money,'" said Cowen & Co. analyst Sam Margolin. "That's why they don't stop until they absolutely have to." When U.S. oil was, on average, much cheaper than crude from the Middle East and North Sea, American refiners were able to make sizable profits refining low-cost U.S. crude and selling fuel abroad. But as oil prices plunged, the differential between benchmark American oil and Brent crude has narrowed to less than $2 a barrel, and the U.S. advantage has dimmed. Refiners also could face competition from new plants in Latin America and the Middle East that are ramping up production. As a result, analysts are predicting an end to the recent streak of blowout earnings performances when refiners start reporting their results next week. While refining stocks haven't been pummeled as heavily as exploration and production companies, shares of independent refiners were on the decline earlier this month, although they have since rebounded somewhat. Even more fuel is coming in from overseas. Cheap oil has given struggling European refiners a new lease on life, and they are also churning out fuel as fast as they can. That continent largely runs on diesel, so the extra gasoline produced is shipped to the U.S. East Coast. Fuel manufacturers are hoping that U.S. consumers will spend some of those savings on more fuel by driving more, and that demand from other fuel-consuming industries such as trucking will pick up -- even as refiners record higher profits on secondary products such as asphalt. "We'll probably see some increase in consumption," said Tom O'Malley, executive chairman of refiner PBF Energy Inc., in an interview last month. Some analysts are dubious that will be enough to shrink the flood of gasoline. "Although we are optimistic on gasoline demand for 2015, on low prices in the U.S. and some other countries, supply growth is far greater," Amrita Sen, chief oil analyst at Energy Aspects in London, wrote in a recent research note. Credit: By Alison Sider
Subject: Petroleum industry; Petroleum refineries; Crude oil prices; Gasoline prices
Location: United States--US
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Jan 24, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648031452
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Corporate News: GE Braces for Oil-Industry Shock as Earnings Jump
Author: Mann, Ted; Dulaney, Chelsey
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]24 Jan 2015: B.4.
Abstract:
[...]work continues on GE's biggest priorities for the year: completing the $17 billion purchase of the energy assets of Alstom SA, and splitting off GE Capital's consumer finance business, Synchrony Financial, as one of the largest steps toward reducing the size of the lending arm, executives said.
Full text: General Electric Co.'s oil and gas business managed to blunt the hit from plunging prices of crude, but the company is bracing for deepening trouble in the months ahead. In the final three months of 2014, orders fell 10% in GE's oil and gas business, including a 72% decline in orders for such drilling equipment as blowout preventers. The company said it hasn't yet had to negotiate lower prices for its backlog of orders. But customers are starting to call, as they look to curtail projects, lay off workers and trim costs. "That's to come in 2015," Chief Financial Officer Jeff Bornstein said. For the past decade, GE Chief Executive Jeff Immelt has built a sizable oil and gas operation, which accounted for 17% of its industrial revenue last year. Plunging oil prices have led GE executives to warn of a drop in both revenue and profit this year at the once fast-growing unit. Mr. Immelt said he had received some initial letters about the pricing of previously booked orders for GE's oil exploration and production equipment, though so far the company hasn't faced an onslaught of demands for a drop in prices. "This is early days," he said. The 6% revenue decline in its oil and gas business last quarter over a year earlier was offset by better results in other parts of its industrial portfolio, such as jet engines, power-generation equipment and locomotives. Industrial revenue climbed 6% over a year-earlier as the Fairfield, Conn.,-based company continued a multiyear effort to wean itself off earnings from its massive financial arm, GE Capital, and returned focus to its heavy-industry core. For the quarter ended Dec. 31, GE's earnings rose to $5.15 billion from $3.21 billion. Revenue climbed 4% to $42 billion. Shares of GE were up less than 1% to $24.48 at 4 p.m. Friday in New York Stock Exchange trading. Meanwhile, work continues on GE's biggest priorities for the year: completing the $17 billion purchase of the energy assets of Alstom SA, and splitting off GE Capital's consumer finance business, Synchrony Financial, as one of the largest steps toward reducing the size of the lending arm, executives said. Mr. Bornstein confirmed GE has agreed to pay more for Alstom's energy businesses, pegging the additional cost at roughly $280 million. That cost includes extending the term of GE's licensing deal to use the Alstom brand to 25 years from an originally anticipated five years. Alstom CEO Patrick Kron has said GE will contribute about the equivalent of $450 million in "additional proceeds" as part of the negotiations after the deal. Mr. Bornstein said the difference between the two figures can be explained in part because Alstom is counting roughly $112 million of potential interest charges it would have paid on cash GE allowed the cash-starved French company to use last year. GE hopes to close the Alstom deal on July 1, Mr. Immelt said. GE warned investors last month that revenue and profit in its oil and gas unit could fall as much as 5% each in 2015, as the overall industry contracts. GE officials have also said aggressive cost reductions could be coming. "I'm sure we'll have some of those discussions with some of our customers just as we'll be having some of those with some of our suppliers," Mr. Bornstein said of renegotiating some oil and gas orders. Company executives also believe they will be well positioned to expand their market share in equipment and services because some of the largest customers will continue to pump oil through the downturn, maintaining demand for GE's products. Credit: By Ted Mann and Chelsey Dulaney
Subject: Petroleum industry; Oilfield equipment & services; Financial performance; Asset acquisitions
People: Kron, Patrick Immelt, Jeffrey R
Company / organization: Name: Alstom SA; NAICS: 541330; Name: General Electric Co; NAICS: 332510, 334290, 334 512, 334519
Classification: 8510: Petroleum industry; 9190: United States; 2330: Acquisitions & mergers; 8370: Construction & engineering industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Jan 24, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--B anking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648031564
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648031564?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Photos: A World Awash in Commodities; Huge surpluses have pushed down prices for commodities ranging from oil to sugar to iron ore. But some investors see the seeds of production cutbacks and a recovery in prices.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
Dry weather and mill closings in Brazil have some forecasters predicting a smaller global sugar surplus this year, or even a deficit.
Full text: As Commodities Fall, Some Investors See Reasons to Buy Cotton prices are at a five year low, forcing farmers to cut back on how many acres they devote to the fiber. The U.S. Department of Agriculture predicts U.S. production will fall 13% for the most commonly grown variety. Above, workers process cotton in India. Dry weather and mill closings in Brazil have some forecasters predicting a smaller global sugar surplus this year, or even a deficit. Raw-sugar prices are up in 2015 as a result. Above, sugar cane is loaded into a truck in Brazil. Few investors see a recovery in the coal market anytime soon, as plentiful supplies and weak demand hold down prices. Above, coal miners in Ukraine. Iron-ore prices are close to five-year lows. But some producers are ramping up output in a bet that strong Chinese demand will lead to a rebound. Above, iron ore is piled up at a port in Brazil. Average U.S. gasoline prices are close to $2 a gallon for the first time since 2009. Some investors see cheaper prices at the pump spurring demand. Above, a clerk adjusts a sign at an Arizona gas station in December. The USDA predicts U.S. farmland devoted to corn will drop slightly this year after a steep slide in prices. Above, workers in Illinois empty corn from a bin in September. Some investors are betting oil prices will rise later this year as producers are forced to cut back. Above, workers tend to oil pump jacks behind a natural-gas flare in North Dakota.
Subject: Petroleum industry; Sugar industry
Location: Arizona United States--US Brazil India Ukraine
Company / organization: Name: Department of Agriculture; NAICS: 926140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647935035
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647935035?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copy right owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil, Dollar a Thorn in Rosy Wall Street Forecasts; Crude, Greenback Could Exert Far Bigger Drag on Earnings Than Some Think
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
The ICE U.S. Dollar Index shows the dollar is now 8% stronger against other major currencies relative to its average level in the fourth quarter. [...]the effects of dollar strength on profits come with a lag.
Full text: Wall Street analysts' forecasts have a habit of tending toward optimism. Considering what is going on with oil and the dollar, right now they are tending toward the ridiculous. Companies are in the midst of reporting fourth-quarter numbers, and so far the news has been less than good. As of Friday, with results from 90 companies in, estimates called for S&P 500 earnings to be up just 3.5% from a year earlier, according to Thomson Reuters. This was a shade below the 4% analysts were looking for at the start of the year. Typically, the earnings-growth estimate drifts up as results come in and companies clear the bars analysts have set for them. The sharp decline in oil prices is a big reason overall earnings growth is so weak. Absent an estimated 24% decline in energy-sector profits, S&P 500 earnings would be on track for an increase of about 7%. Meanwhile, the strong dollar also is cutting into the money U.S. companies are drawing from their overseas operations. On Friday, Kimberly-Clark said foreign-exchange weakness clipped its fourth-quarter sales by 4%; McDonald's said a quarter of its 20% decline in net income was due to currency effects. The effects of oil and the dollar look as if they will only intensify in the quarters to come. Crude oil now is fetching about $45 a barrel, which compares with an average daily price of $73.20 in the fourth quarter. The ICE U.S. Dollar Index shows the dollar is now 8% stronger against other major currencies relative to its average level in the fourth quarter. Moreover, the effects of dollar strength on profits come with a lag. That is partly because some companies hedge against currency swings and partly because many globally traded goods are priced in dollars. Yet analysts are remarkably upbeat on where earnings are headed. For the full year, they expect S&P 500 earnings will increase roughly 6%, not far off 2014's gain of about 7%. Much of this growth is supposed to occur during the latter part of the year. In the fourth quarter of 2015, analysts estimate S&P 500 earnings will be about 11% above their year-earlier level. A look across estimates for different sectors shows how difficult that level of growth will be to achieve. First, energy-sector earnings in the fourth quarter of this year are expected to show an 18% decline from a year earlier. That seems large, but it looks to be based on overoptimistic assumptions on where oil is heading. Looking only at Wall Street firms that this month have updated the forecasts they submit to FactSet, the average estimate for the price of crude oil in the fourth quarter is $64.56 a barrel, 42% above Friday's level. Consumer-staples companies--ones like Coca-Cola and Colgate-Palmolive that sell everyday consumer goods--are expected to show earnings growth of 8.8% in the fourth quarter of 2015, versus 0.2% last quarter. This is despite their hefty exposures to foreign currencies. The technology and industrials sectors, which also do a great deal of business overseas, also are expected to show strong growth. As is the materials sector, which includes many companies that are exposed to weakening commodity prices. The major beneficiaries of lower oil prices and the rising dollar are U.S. consumers. They will be able to use the money they save on gas and imported goods to buy more elsewhere. But the consumer-discretionary sector--made up of companies such as retailers that most directly benefit from stepped-up consumer spending--accounts for only about a 10th of total S&P 500 earnings. What's more, analysts forecast profits for the sector will increase at a double-digit-percentage rate through this year, with fourth-quarter 2015 earnings 18% higher than a year earlier. Eventually, analysts will need to temper their enthusiasm. But investors may not have the luxury of waiting for reality to sink in. Write to Justin Lahart at Credit: By Justin Lahart
Subject: American dollar; Profits; Financial performance; Currency; Crude oil prices
Location: United States--US
Company / organization: Name: Kimberly-Clark Corp; NAICS: 322291, 313230, 314999; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Colgate-Palmolive Co; NAICS: 325620, 311911
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647945356
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647945356?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Wobbles on OPEC Comment; Secretary-General of OPEC Says Prices May Have Hit a Bottom
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
Oil prices wavered between gains and losses Monday as traders weighed potentially bullish comments from the Organization of the Petroleum Exporting Countries against ongoing concerns that the market is oversupplied.
Full text: Oil prices wavered between gains and losses Monday as traders weighed potentially bullish comments from the Organization of the Petroleum Exporting Countries against ongoing concerns that the market is oversupplied. Oil prices have plunged more than 55% since mid-June on concerns about ample supplies and tepid demand. OPEC decided in November not to lower its output quota, sending prices tumbling lower on the expectation that without intervention from OPEC, it could take months or years for the global glut of oil to shrink. OPEC Secretary-General Abdalla Salem el-Badri said in an interview with Reuters on Monday that with prices between $45 and $55 a barrel, "I think maybe they reached the bottom and will see some rebound very soon." Prices, which had been trading in the red overnight, turned positive on the news. U.S. oil for March delivery rose as high as $46.11 a barrel, up from $45 a barrel earlier in the day, on the New York Mercantile Exchange. Prices recently traded down 21 cents, or 0.5%, at $45.38 a barrel. Brent, the global benchmark, rose from $48 a barrel to $49.29 a barrel after the interview was released. Prices recently fell 37 cents, or 0.8%, to $48.42 a barrel on ICE Futures Europe. At lower prices, Mr. Badri said, producers won't invest in new output and supplies will shrink. "Maybe we will go to $200 if there is a real shortage of supply because of the lack of investment," Mr. Badri told Reuters. However, he said, "it will take another 4-5 months" before OPEC members talk about a change in policy. "We will see how the market behaves at the end of the first half of 2015," he said. Mr. Badri's comments "suggest that OPEC will continue to monitor the oil markets and adjust strategy as the market evolves, but do not necessarily imply any action is imminent," said Simmons & Co. International in a note. Earlier Monday, prices fell to fresh lows on concerns that the outcome of the for Europe's economy. Saudi Arabia, OPEC's top producer, also reaffirmed that its new king won't alter the country's policy on maintaining its oil output, weighing on prices. Gasoline futures recently traded down 1.55 cents, or 1.2%, at $1.3324 a gallon. Diesel futures rose 1.03 cents, or 0.6%, to $1.6570 a gallon. Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil prices; Cartels
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1647998765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1647998765?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Rout Signals 'Buy' to Some --- As Surpluses Grow From Oil to Copper, Investors Risk Pain Now for Gains Later
Author: Josephs, Leslie
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Jan 2015: C.1.
Abstract:
The world's farmers, mining companies and oil producers spent billions of dollars over the last decade to increase output. Despite record supplies, investors are hanging on to bullish bets in some markets that declined steeply in recent years, including corn and soybeans, according to data on positions in the futures market from the Commodity Futures Trading Commission.
Full text: A few brave investors are betting the gloom oppressing global commodity markets is on the verge of lifting. The world's farmers, mining companies and oil producers spent billions of dollars over the last decade to increase output. The result: huge surpluses and sharply lower prices for commodities ranging from oil to sugar to iron ore. The magnitude of the decline has exceeded the expectations of the vast majority of investors and analysts. The Bloomberg Commodity Index, tracking 22 commodities, fell for a fourth straight year in 2014 and is down 3.1% this year. But some investors see the seeds of a recovery in reports of plunging prices. They are buying some of the hardest-hit commodities, in a bet that low prices will force producers to cut back, erasing the surpluses behind the multiyear slide. Many of these money managers acknowledge that a rebound may still be months off but say they are willing to endure some short-term losses rather than miss an opportunity to get in early on the next rally. And though analysts predict months, or even years, of low prices for some commodities, bullish investors take heart that while many observers saw signs that the decadelong commodity boom was nearing an end, few predicted the extent to which prices would crash. These people reason that if market watchers failed to foresee the depth of the current downturn, they may be wrong about the timing of the rebound. "I don't think commodities will go down much more than they have," said Christopher Burton, portfolio manager at Credit Suisse Asset Management's commodities group, which oversees about $10 billion. "We are bullish and we are positioned for a bullish move in commodities." Mr. Burton has bigger exposure to diesel and copper than his benchmarks outline, as he said he expects prices to rebound this quarter. Copper and diesel are both down about 11% in 2015. Last year typified commodities' recent struggles. The Bloomberg Commodity Index ended 2014 down 17% at a more than 5 1/2-year low. Many commodities have extended losses in the new year. U.S. oil prices dropped below $45 a barrel for the first time since April 2009 and copper prices have reached a 5 1/2-year low. Despite record supplies, investors are hanging on to bullish bets in some markets that declined steeply in recent years, including corn and soybeans, according to data on positions in the futures market from the Commodity Futures Trading Commission. Many investors see agricultural commodities bouncing back fastest because farmers can adjust the size of their crops from season to season. Growers watch prices right up until the start of the planting season. If they ratchet back the number of acres devoted to a crop, supplies can plunge in months, sending prices soaring. In Brazil, dozens of sugar-cane processors have closed or been idled by their owners over the past few seasons as prices slumped. The price of sugar fell for a fourth consecutive year in 2014 but is up 4.5% this year. Growers have been planting less cane, and some of the mills that stayed open are running below capacity. That is likely to result in global sugar production falling below demand for the first time in five years, according to estimates from Rabobank and other industry analysts. The bank expects prices to reach 17.5 cents a pound this year, up from 14.52 cents at the end of 2014. U.S. farmers are also changing course. The U.S. Department of Agriculture predicts the land U.S. farmers devote to corn will drop slightly to 88 million acres, from 90.9 million acres last year. Steve Verett, who farms 3,500 acres with his brother and son in west Texas, said he plans to cut the number of acres he will plant with cotton next spring by as much as 25%. Prices for the fiber tumbled 28% last year to 60.27 cents a pound, almost 10 cents lower than his cost of production. West Texas is the largest cotton-growing region in the U.S., the world's top exporter of the fiber. The USDA said farmers will likely cut back on acres this spring, leading to a production decline of 13%, to 13.8 million bales of upland variety cotton, which comprises the bulk of U.S. production. In the futures market, some investors are even buying oil and petroleum products, among the commodities in the Bloomberg index that fell the most last year. While many analysts expect supplies of oil to keep ballooning, suppressing prices, some investors are betting on a bounce as demand hits records in big importers like China and oil companies slash budgets. About half the world's oil isn't economical to produce when prices are below $50 a barrel, Nomura Securities said in a recent note. "We're at price levels where you're seeing a lack of interest in reinvesting" by producers, said Jonathan Berland, senior managing director at Gresham Investment Management, LLC, which manages about $11 billion and specializes in commodities. Still, some commodities prices may remain depressed for some time. Some mining firms and drillers are reluctant to shut down mines and oil wells that can be expensive to restart. Many companies borrowed to fund expansion during the boom years and must keep producing at high rates to pay off debt. The outlook for demand is also uncertain. The economy in China, the world's top consumer of raw materials, grew at its slowest rate in decades last year. The lower prices, particularly for oil, are expected to be a tailwind for the global economy but a painful shift for companies and nations that depend on the sale of raw materials. Lower commodity prices "should be viewed unequivocally as a good thing for the global economy as long as it is orderly on the way down," said Francisco Blanch, head of commodities research at Bank of America Merrill Lynch. Some investors and analysts say concerns over a slowdown in economic growth in China are overblown, arguing that the country will continue to buy when the price is right. "You shouldn't underestimate China," said Daniel Bathe, a portfolio manager at Lupus alpha Asset Management AG's commodity fund. "We think [commodities] demand will pick up and supply will stabilize. There's not a lot of downside left." Credit: By Leslie Josephs
Subject: Commodity prices; Crude oil; Copper
Location: United States--US
Company / organization: Name: Department of Agriculture; NAICS: 926140; Name: Commodity Futures Trading Commission; NAICS: 926140, 926150
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 26, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648031185
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Exxon Fined $1.05 Million For Pipeline Break in 2011
Author: Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]26 Jan 2015: B.3.
Abstract:
Exxon Mobil Corp. must pay a $1.05 million penalty for safety violations related to a 2011 pipeline break under Montana's Yellowstone River, federal regulators said Friday.
Full text: Exxon Mobil Corp. must pay a $1.05 million penalty for safety violations related to a 2011 pipeline break under Montana's Yellowstone River, federal regulators said Friday. The pipeline was buried beneath the riverbed, but flooding amid a summer snow melt exposed it and stressed it to the breaking point. An estimated 1,500 barrels of oil spilled into the river and were carried miles downstream. The Yellowstone River is again the site of a major cleanup effort, after another pipeline break earlier this month about 230 miles east of Exxon's spill. It isn't yet clear what caused Bridger Pipeline LLC's Poplar pipe to fail under the river. The company now estimates that about 960 barrels -- more than 40,000 gallons -- spilled into the partially iced-over river. That incident fouled drinking water for residents of the city of Glendive, Mont., but state officials said Friday that the water is once again safe to drink. In the case of the 2011 spill, Jeffrey Wiese, associate administrator of the Pipeline and Hazardous Materials Safety Administration, upheld a finding that Exxon hadn't adequately prepared for the possibility that flooding could cause the pipeline to fail -- something that had happened to pipelines in the area in the past. Exxon had argued that its line had survived more severe floods intact and it didn't have reason to believe that the line was in danger. Exxon spokesman Christian Flathman said in a statement Saturday that Exxon is reviewing the agency's final order. The company has 20 days to ask the agency to reconsider the ruling. The agency found that Exxon complied with federal regulations and did take steps ahead of time to prevent and mitigate a potential spill in the area, withdrawing one of its previous allegations against the company. That helped reduce the fine by nearly $700,000 from what the agency proposed in 2013. Also on Friday, Exxon agreed to a $2 million settlement of claims relating to seven private properties affected by the oil spill, said Jory Ruggiero, an attorney for the plaintiffs. "Exxon Mobil Pipeline Company committed to paying for the cleanup and all valid claims related to the incident. This settlement was an extension of that process," Mr. Flathman said. Exxon reached a $1.6 million settlement with the state of Montana in 2013 and agreed to reimburse the state for more than $760,000 in cleanup costs. Credit: By Alison Sider
Subject: Pipelines; Petroleum industry; Environmental cleanup; Fines & penalties; Oil spills
Location: Montana Yellowstone River
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Classification: 9190: United States; 8510: Petroleum industry; 1540: Pollution control
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Jan 26, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648031503
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648031503?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dueling Oil Benchmarks Converge in Their Price, but Diverge in Their Stories; Crude Measures Reflect Different Market Forces Playing Out in U.S. (as Told by WTI) and Globally (by Brent)
Author: Jo Craven McGinty
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
"If somebody wanted to buy heavier or more sour crude, they could say what's Brent? OK, I'll give you Brent minus $2.50," said James Preciado, who analyzes futures markets and energy prices for the U.S. Energy Information Administration. "The biggest was the Libyan situation," said John Felmy, the chief economist for the American Petroleum Institute, referring to the militias that have thrown the country into turmoil and paralyzed its oil industry, as well as losses in other areas like South Sudan.
Full text: The economic ripples caused by the free-falling price of oil in recent months have drawn wider public attention to the daily cost of a barrel of crude. But the figures traditionally used to convey global oil prices--the West Texas Intermediate and Brent crude benchmarks--measure different things and don't always line up. Today, for example, a barrel of oil costs $45 and change by and a few dollars more by . At times, the difference between the two has topped $20. Traders and economists are familiar with the reasons why WTI and Brent differ. For those newly curious about what falling oil prices mean, it's worth learning what the benchmarks reveal, and how they've changed over time. The basic reason why the numbers diverge is because they are snapshots of oil prices in different places: WTI reflects the U.S. and Brent the North Sea in Europe. At one time, they were equally good benchmarks of global crude. But as domestic production surged, WTI began to reflect the surprising domestic oil glut, which turned out to be more than the existing pipelines could handle. Crude oil is classified as light, medium or heavy, referring to the density of the liquid, and as sweet or sour based on its sulfur content. Light, sweet oil--which floats on water and is low in sulfur--is prized because it requires less processing to convert it into usable products. WTI and Brent are both light, sweet crude oils. "If somebody wanted to buy heavier or more sour crude, they could say what's Brent? OK, I'll give you Brent minus $2.50," said James Preciado, who analyzes futures markets and energy prices for the U.S. Energy Information Administration. Traditionally, prices for the two have tracked closely and they've been quoted interchangeably as benchmarks. But the U.S. shale oil boom upended the relationship, throwing the WTI's usefulness as a global barometer into question. Before the boom, the U.S. produced about five million barrels of crude oil a day and imported about 13 million barrels. Much of the imported oil moved from the Gulf Coast to Cushing, Okla., a major crude oil hub in North America and the delivery point for WTI. When the boom hit, domestic production rapidly increased by 4 million barrels a day, flooding Cushing and overwhelming the pipelines, which were not equipped to move large volumes of crude to Texas. "They could push it upstream but not to the Gulf Coast," Eric Lee, an energy analyst with Citigroup said. "The storage tanks filled up, and prices dropped significantly." Meanwhile, several factors increased demand for Brent crude, keeping its prices high relative to WTI and cementing Brent as the more accurate global benchmark. "The biggest was the Libyan situation," said John Felmy, the chief economist for the American Petroleum Institute, referring to the militias that have thrown the country into turmoil and paralyzed its oil industry, as well as losses in other areas like South Sudan. "We lost 3% of the world supply. You might look at it and say 3% is not very much. It can mean a 30% change in prices." To address the bottleneck, the 500-mile Seaway pipeline reversed the direction of its flow to carry crude from the Cushing site to Texas. A twin pipeline was constructed, doubling the pipeline's capacity to about 850,000 barrels a day. And a segment of the Keystone pipeline was built with the potential to transport about 830,000 barrels a day to Gulf Coast refineries. With WTI crude moving through the pipes, the spread between the benchmarks began to narrow, and displaced imports contributed to the lessening gap. Countries in "West Africa, Latin America and the Middle East lost market share in the U.S.," Mr Lee said. "Oil they had exported to the U.S. has to go somewhere else in the world." The U.S. still has an oversupply of crude, he added, but for now the rest of the Atlantic Basin--which includes the North Sea--is even more oversupplied, and that is pushing Brent prices down to meet WTI. "It becomes a buyers' market. There is downward pressure on the price," Mr. Lee said. After about six months of steep decline, the two benchmarks are once again more closely aligned, although the U.S. product has lost its status as a global benchmark. "Nowadays, the WTI is much more associated with U.S. domestic production and U.S. domestic prices," Mr. Preciado said. "Brent is seen as an international benchmark." That doesn't mean one is more important than the other. But the benchmarks now tell different stories. Write to Jo Craven McGinty at Corrections & Amplifications Before the energy boom, the U.S. produced about five million barrels of crude oil a day and imported about 13 million barrels. An earlier version of this column incorrectly said the imported figure was 18 million. Credit: By Jo Craven McGinty
Subject: Crude oil; Petroleum industry; Pipelines; Benchmarks; Crude oil prices; Sulfur content
Location: United States--US North Sea
Company / organization: Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648095130
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648095130?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP Freezes Pay in 2015 as Part of Cost-Cutting Plan; Company Had Been Selling Assets and Making Cuts Even Before Oil Prices Plunged
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
[...]BP had been selling assets and pushing to rein in outlays since before prices started to weaken in the middle of last year. Since selling more than $40 billion in assets after its 2010 Deepwater Horizon disaster in the Gulf of Mexico, BP has significantly reduced its oil-and-gas production.
Full text: LONDON--BP PLC Chief Executive Bob Dudley told staff in a Monday memo that the company would freeze 2015 base pay, part of a larger round of cost savings and cuts the company has undertaken as oil prices remain at less than half the level of mid-2014, a BP spokesman said. "We see this as a prudent response to the currently challenging market environment in which BP operates," the spokesman said. Oil companies big and small are struggling with costs amid the sharp drop in oil prices. But BP had been selling assets and pushing to rein in outlays since before prices started to weaken in the middle of last year. Since selling more than $40 billion in assets after its 2010 Deepwater Horizon disaster in the Gulf of Mexico, BP has significantly reduced its oil-and-gas production. The company more recently said it was embarking on staffing cuts in such places as the U.K.'s North Sea, and considering other measures to bring down spending. BP said in December it expects to book restructuring charges of about $1 billion between the end of 2014 and through 2015, and said the company could reduce capital expenditures this year by up to $2 billion, after having initially planned to spend at least $24 billion. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry
Location: United Kingdom--UK North Sea Gulf of Mexico
People: Dudley, Bob
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648119204
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648119204?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Forecasters Should Live for Today
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
[...]in a paper published in 2010, economists Ron Alquist and Lutz Kilian found that simply forecasting no change in oil prices was much more accurate than professional survey forecasts across all time horizons from one month to 12 months out.
Full text: Forecasters are looking for oil prices to rebound strongly by the end of the year. History suggests investors should take the under on that. Crude-oil prices have fallen swiftly over the past several months. So, too, have estimates on where prices are headed--just not by as much. Economists surveyed earlier this month by The Wall Street Journal estimated that oil will fetch $63 a barrel at the end of this year, 30% above where oil was (and still is) trading. Similarly, industry analysts who have submitted fourth-quarter forecasts to FactSet this month see oil averaging $64 in the final three months of 2015. It isn't hard to construct scenarios in which such forecasts come true: An improving global economy improves oil's demand profile, say, while slowing investment diminishes supply expectations. But considering how well survey-based oil forecasts have performed in the past, buying into such stories might not be such a good idea. Indeed, in a paper published in 2010, economists Ron Alquist and Lutz Kilian found that simply forecasting no change in oil prices was much more accurate than professional survey forecasts across all time horizons from one month to 12 months out. Their work also showed that survey-based forecasts tend to be less accurate than those derived from the prices of oil futures. This isn't to say that no-change forecasts are very good. But their relative accuracy suggests there are some big downside risks to Wall Street's expectation of rebound in oil prices. That, in turn, suggests that a host of other forecasts for which oil price estimates are a critical input--from energy company earnings to inflation to consumer spending--could end up being very wrong. Write to Justin Lahart at Credit: By Justin Lahart
Subject: Petroleum industry; Prices; Crude oil
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648123569
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648123569?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Ease as Market Resumes Focus on Fundamentals; Death of Saudi King Unlikely to Alter Saudi Oil Policy
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
[...]the market flipped back into negative territory over the course of the session in the absence of other bullish drivers for supply and demand fundamentals.
Full text: Oil prices drifted down Monday despite bullish comments from an OPEC leader, instability in the Middle East and the election of a new government in Greece that could revive worries about sovereign debt there. Not long ago, geopolitical risks, even when they didn't pose immediate threat to oil supply flows, were the kind of thing that could send crude price soaring. But with a large and growing global surplus of oil--said to be mounting at a rate of 1.5 million barrels a day--the market has so much crude that such worries no longer reverberate. The benchmark U.S. oil contract fell 44 cents, or 1%, to settle at $45.15 a barrel on the New York Mercantile Exchange. The global Brent benchmark ended 63 cents, or 1.3%, lower at $48.16 a barrel on the ICE Futures Europe exchange. Both contracts have fallen more than 55% since last summer as global supplies have mounted in the face of weak demand. Futures came into the session in the red but gained after a report quoted the secretary-general of the Organization of the Petroleum Exporting Countries, Abdalla Salem el-Badri, as saying that oil prices appear to have bottomed out and could be poised for a rebound. OPEC decided in November not to lower its output quota, sending prices tumbling lower on the expectation that without intervention from the cartel, it could take months or years for the global glut of oil to shrink. But the market flipped back into negative territory over the course of the session in the absence of other bullish drivers for supply and demand fundamentals. "People are starting to take anything coming out of OPEC with a big grain of salt," said Carl Larry, an analyst with research consultancy Oil Outlooks & Opinions. Earlier Monday, prices fell to fresh lows on concerns that the outcome of the Greek election would increase uncertainty for Europe's economy. Saudi Arabia, OPEC's top producer, also reaffirmed that its new king won't alter the country's policy on maintaining its oil output, weighing on prices. And in Yemen, a volatile neighbor to Saudi Arabia, the collapsing government threatened to give way to outright factionalism. In refined petroleum markets, February diesel futures fell 0.69 cent, or 0.4%, to $1.6398 a gallon. February gasoline futures lost 3.12 cents, or 2.3%, to settle at $1.3167 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Crude oil prices; Supply & demand; Petroleum industry; Sovereign debt
Location: United States--US Greece Middle East
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648168749
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648168749?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Steel to Curtail Operations at Three Plants; U.S. Steel Curtailments in Texas, Alabama Blamed on Collapse of Oil Prices
Author: Miller, John W
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
Other steelmakers with key U.S. operations include Nucor Corp, Steel Dynamics Inc., ArcelorMittal and AK Steel Holding Corp. Analysts have said they need to cut back on production to hold up prices, which are at their lowest levels in five years.
Full text: PITTSBURGH--U.S. Steel Corp. said Monday it will temporarily curtail operations at two plants in Alabama and one in Texas, potentially affecting 1,918 workers, as the collapse of oil prices continues to punish key segments of American industry. The company said it would "adjust operations" at Fairfield Tubular Operations and Fairfield Works in Fairfield, Alabama, and Lone Star Tubular Operations in Lone Star, Texas, all part of a business that sells steel pipes and tubes to oil and gas drillers. Those companies have been canceling orders because of "The adjustment in operations is a result of softening market conditions that reflect the cyclical nature of the energy market," U.S. Steel said. "Global influences in the market, like unfair trade and fluctuating oil prices, continue to have an impact on the business." Earlier this month, U.S. Steel said it would and possibly lay off up to 756 workers. The fall in oil prices to around $50 a barrel could decimate an entire industry that has been built up over the last few years to supply drilling in places like the Marcellus Shale and the Gulf of Mexico. "There's still millions of tons of capacity set to come online, and it's just going to be too much," says Charles Bradford of Bradford Research Inc. U.S., French and even Chinese companies have built plants from Texas to Ohio. A subsidiary of France's Vallourec SA, for example, built a $650 million 500,000-ton-per-year mill in Youngstown, Ohio. U.S. Steel still is among the first to get hit partly because it is among the biggest producers, and partly because it has been always been among the first companies to raise prices, said a former U.S. Steel executive, who declined to be named. Other steelmakers with key U.S. operations include Nucor Corp, Steel Dynamics Inc., ArcelorMittal and AK Steel Holding Corp. Analysts have said they need to cut back on production to hold up prices, which are at their lowest levels in five years. A spokesman for the United Steelworkers union declined to comment. The oversupply situation in the U.S. has been exacerbated by a rise in imports. Foreign shipments into the U.S. rose 34% to 41.5 million tons during the first 11 months of 2013. U.S. Steel, which is trying to reverse , including a $1.7 billion deficit loss in 2013, has been among those betting most heavily on its energy-related business. The company reports fourth quarter and full-year earnings after the close of the market on Tuesday. It said chief executive Mario Longhi would provide more details on Monday's announcement when he briefs analysts and reporters on a conference call Wednesday morning. Last year, as it pursued trade import tariffs, U.S. Steel curtailed operations at plants in McKeesport, Pa., and Bellville, Texas, citing competition from foreign imports. They have yet to be restarted. Write to John W. Miller at Credit: By John W. Miller
Subject: Steel industry; Energy industry; Steel pipes
Location: United States--US Ohio Alabama Texas
Company / organization: Name: Steel Dynamics Inc; NAICS: 331110; Name: US Steel Corp; NAICS: 331110; Name: Nucor Corp; NAICS: 332312, 325180, 331110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648171076
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Hess Cuts 2015 Capital and Exploratory Spending; Oil and Gas Company Announces $4.7 Billion Budget
Author: Beckerman, Josh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]26 Jan 2015: n/a.
Abstract:
The oil rig count in the U.S. declined by 49 last week, according to data by Baker Hughes Inc. ConocoPhillips and Marathon Oil Corp. have both projected 20% budget declines for 2015, while companies including Apache Corp. have announced layoffs.
Full text: Hess Corp. is reducing its 2015 budget, joining a number of energy producers that have reduced spending plans amid a sharp decline in oil prices. The oil and gas company announced a 2015 capital and exploratory budget of $4.7 billion, down 16% from 2014 spending of $5.6 billion. Hess said it "is well positioned to manage through the current price environment" and said the budget "reflects a disciplined approach to maintaining our financial strength and flexibility while preserving our long term growth options." Nymex WTI crude lost 7.2% last week, settling at its lowest value since March 11, 2009. The oil rig count in the U.S. declined by 49 last week, according to data by Baker Hughes Inc. ConocoPhillips and Marathon Oil Corp. have both projected 20% budget declines for 2015, while companies including Apache Corp. have announced layoffs. Hess said its planned budget includes about $2.1 billion of "unconventionals," comprised of $1.8 billion in the Bakken Shale and $290 million in the Utica Shale. Write to Josh Beckerman at Credit: By Josh Beckerman
Subject: Petroleum industry; Budgets
Location: United States--US
Company / organization: Name: Apache Corp; NAICS: 324110, 211111, 213112; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 26, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648172937
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648172937?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Obama's Trans-Alaska Oil Assault; He's slowly starving the current pipeline so it will have to shut down.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
Since the pipeline is the only way to get large quantities of Alaskan oil south, shutting it down means closing to exploration one of the world's greatest repositories of hydrocarbons.
Full text: Washington's energy debate has been focused on President Obama's endless opposition to the Keystone XL pipeline, but maybe that was only a warm-up. His new fossil fuel shutdown target is Alaska. President Obama announced Sunday that he'll use his executive authority to designate 12 million acres in Alaska's Arctic National Wildlife Refuge (ANWR) as wilderness, walling it off from resource development. This abrogates a 1980 deal in which Congress specifically set aside some of this acreage for future oil and gas exploration. It's also a slap at the new Republican Congress, where Alaska Sen. Lisa Murkowski has been corralling bipartisan support for more Arctic drilling. The ANWR blockade also seems to be part of a larger strategy to starve the existing Trans-Alaska pipeline, the 800-mile system that carries oil south from state lands in Prudhoe Bay. ANWR occupies the land east of that pipeline. The Interior Department this week will release a five-year offshore drilling plan that puts vast parts of the Chukchi and Beaufort Seas--the area to the north of the pipeline--out of bounds for drilling. This follows an Administration move in 2010 to close down nearly half of the 23.5 million acre National Petroleum Reserve-Alaska (NPRA)--the area west of the pipeline. Federal agencies have also been playing rope-a-dope with companies attempting to drill on the few lands that are still available. ConocoPhillips has been waiting years for permits to access a lease it purchased in NPRA--and the Administration is this week expected to make that process even harder. Shell has spent $6 billion on plans to drill in the Chukchi and Beaufort, only to be stymied by regulators. The Arctic Outer Continental Shelf is estimated to hold at least 27 billion barrels of oil. ANWR is thought to have at least 10 billion more, while NPRA--designated in 1976 as a strategic petroleum stockpile--is considered equally rich. Yet not one drop of oil is flowing from these areas, and Mr. Obama seems intent on ensuring that none does. The political prize here is the death of the Alaska oil pipeline, which in its heyday pushed some 2.2 million barrels of oil south a day, but has seen volume slow to 500,000 barrels a day as the state's existing oil fields decline. The drop in oil prices has increased financial pressure on Arctic drillers, and any lower flow threatens the viability of the pipeline. This is what environmentalists want because they know that if the pipeline shuts down, it must by law be dismantled. Since the pipeline is the only way to get large quantities of Alaskan oil south, shutting it down means closing to exploration one of the world's greatest repositories of hydrocarbons. The pity is that in his ANWR announcement Mr. Obama didn't express as much concern for Alaskans as he did caribou. An estimated one-third of Alaskan jobs are oil-related, and the oil industry accounts for some 85% of state revenue. Shutting the pipeline would be a terrible blow to the state. New Gov. Bill Walker has said he may accelerate oil and gas permitting on state lands to compensate. Yet the vast majority of the state's untapped reserves are below federal lands that Mr. Obama is now blocking. The ANWR land grab is another classic of executive overreach. Congress in 1980 passed the Alaska National Interest Lands Conservation Act, a grand compromise that put vast tracts under protection, in return for a clause declaring "no more" wilderness designations in Alaska unless approved by Congress. Yet the Interior Department plans to use the President's recommendation of a new ANWR wilderness designation as a license to lock up the land. The decision also ignores the environmental protection that is possible in light of new drilling technology. Most of the refuge is already protected as wilderness, yet Mr. Obama's order includes the 0.01% of barren, coastal wasteland that was up for drilling discussion. Innovations like directional drilling would allow the industry to tap those vast reserves with minimal surface impact. In his State of the Union address, Mr. Obama again claimed credit for falling gas prices, but the truth is that every advance in oil and gas drilling has come without his help or despite his opposition. Mr. Obama may figure he can get away with this now that oil prices have fallen and the need for new oil supplies seems less urgent. His power play is nonetheless a blow to U.S. energy security, and an especially nasty blow to tens of thousands of Alaskans.
Subject: Energy policy; Pipelines; Environmental protection; Oil exploration; Petroleum industry
Location: Arctic region Alaska
People: Murkowski, Lisa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648175744
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648175744?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Obama Administration to Propose New Offshore Areas for Oil and Gas Drilling; Leases Off Atlantic Coast Expected; Drilling in Parts of Beaufort, Chukchi Seas Off Alaska Seen Blocked
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
"The best way to fight climate change is to leave these resources in the ground," said Sierra Weaver, a lawyer at the Southern Environmental Law Center, which opposes offshore drilling, on Monday.
Full text: WASHINGTON--The Obama administration is planning to propose opening up new areas of the nation's federally owned waters to oil and natural gas drilling, including areas along the Atlantic Coast, according to people familiar with the plan. The Interior Department is set to propose as soon as Tuesday its plan that will outline what leases the federal government will offer from 2017 to 2022, a step the government is required by law to take every five years. The plan is expected to come under increased scrutiny as low oil prices are testing the profit margins of energy companies and President Barack Obama is pursuing an aggressive climate-change agenda. Jessica Kershaw, an Interior Department spokeswoman, declined to comment Monday evening on the proposal. The plan is expected to include leases off states in the mid- and south-Atlantic coasts, including Virginia and both South and North Carolina, whose governors support offshore drilling. It isn't expected to include offshore Florida, whose policy makers have generally opposed such a move. The plan is also expected to block parts of the Beaufort and Chukchi seas off the coast of Alaska for future oil and gas development, according to Robert Dillon, a spokesman for Sen Lisa Murkowski (R., Alaska). On Sunday, Mr. Obama announced in a video message that the Interior Department was designating as wilderness more than 12 million acres of Alaska's more than 19-million acre Arctic National Wildlife Refuge, including 1.5 million acres of coastal plains thought to have rich oil and gas resources. That move drew cheers from environmental groups, who are expected to criticize Interior Department's proposal to offer lease sales on the Atlantic Coast, which has no current drilling activity. "The best way to fight climate change is to leave these resources in the ground," said Sierra Weaver, a lawyer at the Southern Environmental Law Center, which opposes offshore drilling, on Monday. "And the Atlantic Coast has incredible potential for offshore wind." The government's plan, which must go through a public comment period before becoming final, represents a sort of middle ground between what the oil and natural-gas industry wanted and what environmentalists have called for. The final plan could be narrower than its proposal, though not more expansive. In its last five-year plan initially issued in March 2010, the administration proposed opening up at least one area off Virginia's coast to drilling. In the wake of the BP oil spill that wore on for most of that summer, the administration reversed course and canceled that lease sale. The American Petroleum Institute, a Washington-based trade group, had lobbied for the Eastern Gulf of Mexico, which is under a congressional drilling ban until 2022, to be included as well in case Congress repeals the ban before then. The plan isn't expected to include this, but additional sales in the Western and Central parts of the Gulf are expected. "We want this to be the first step of a dialogue in terms of making sure we're not taking anything off the table," said Erik Milito, director of upstream and industry operations at API, criticizing the department's expected move to not include the Eastern Gulf of Mexico. Write to Amy Harder at Credit: By Amy Harder
Subject: Offshore drilling; Petroleum industry; Natural gas; Energy industry
Location: Virginia Alaska
People: Obama, Barack Murkowski, Lisa
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648175765
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648175765?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Siemens Answers Shareholder Critics; CEO Kaeser Defends Plan to Buy U.S. Oil-Equipment Maker Dresser-Rand
Author: Alessi, Christopher
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
MUNICH--German engineering company Siemens AG on Tuesday said net profit declined nearly 25% in the first quarter, hurt in part by economic challenges in Europe and the slide in global oil prices.
Full text: MUNICH--The U.S. is likely to remain the strongest and most attractive economic region for growth in the near term for Siemens AG, Chief Executive Joe Kaeser said Tuesday as shareholders took aim at the planned acquisition of U.S. oil-equipment maker Dresser-Rand Group Inc. "The re-industrialization of the U.S. and the country's superior energy policy offer growth opportunities," Mr. Kaeser said at the annual meeting of shareholders. The "geopolitical stability" of the U.S. is an "important aspect in our acquisition policy," he added. To that end, Mr. Kaeser defended Siemens's planned $7.6 billion acquisition of Dresser, announced in September, amid some tough questioning by investors over the deal's high price. The deal, at $83 a share, values Dresser at roughly 58 times the past year's earnings. Rival U.S. oil-services companies FMC Technologies Inc. and Dril-Quip Inc. trade at less than 16 times earnings. "Because of the acquisition, you lost a lot of credit," Henning Gebhardt, a portfolio manager at Siemens shareholder Deutsche Asset & Wealth Management, known as DWS, said in a speech at the meeting. "Why was the acquisition so strategically important?" Mr. Gebhardt asked. Siemens wouldn't be able to cover its capital allocation for the deal until at least 2020, he said. "As a former CFO, you should know how to do better than this," Ingo Speich, a portfolio manager at Union Investment GmbH, another Siemens shareholder, said referring to the deal. Mr. Speich accused Mr. Kaeser of getting with former Siemens Chief Executive Peter Löscher, who, as the chairman of Swiss pump maker Sulzer AG, had also sought a deal with Dresser. "Dresser Rand was our number-one target from a strategic point of view," Mr. Kaeser said in response to investor criticism. "This was not a gladiators fight," he added, alluding to his former boss-come-rival, Mr. Löscher. Concerns over the price of the transaction have been amplified in recent weeks as oil prices have plunged to below $50 a barrel. Despite this, institutional investors expressed overall satisfaction with Mr. Kaeser's performance compared with that of his predecessor. Mr. Kaeser, who took the helm in July after the board forced out Mr. Löscher, has undertaken a comprehensive restructuring, including a [euro]1 billion ($1.12 billion) cost-cutting program. Investors have largely supported the Dresser acquisition from a strategic perspective as it allows Siemens to take advantage of the U.S. shale-gas boom and leverage a new product portfolio in the oil sector. But the onset of lower oil prices has heightened unease. Mr. Kaeser said oil-market volatility was "not structural," attributing oil's slide to oversupply. He said the acquisition of Dresser would bring Siemens high synergies along with greater market access and opportunities to expand its automation-technology business. The deal is part of a larger strategy by Mr. Kaeser to streamline the company by shedding noncore businesses and focusing more on energy operations. Last month, Siemens closed a deal to acquire Rolls Royce Holdings PLC's civilian energy operations for $1.3 billion. Mr. Kaeser faced shareholders after Siemens reported results for the first quarter of fiscal year 2015 earlier on Tuesday, posting a 25% drop in net profit to [euro]1.08 billion for the three months ended Dec. 31, hurt in part by macroeconomic pressures. Siemens reiterated that it expects 15% growth in earnings per share in the year ending in September, amid flat revenue. An 11% decline in new orders to [euro]18.01 billion underscored the pressure Siemens is facing as customers placed fewer large orders at its mobility, wind-power and renewables businesses, as well as its process industries and drives unit. Profitability at Siemens's fossil-fuel business, its biggest by sales, came under particular pressure, hit by lower margins in the large gas-turbine and steam businesses, the company said. Cutbacks in investment by European utilities and lower energy prices have squeezed profitability in the sector. The division's profit margin shrank to 11.3% from 18.2% in the same period last year, Siemens said. The division also faces questions over management changes. On Monday, Siemens said the chief executive of the fossil-fuel division, Roland Fischer, would step down at the end of this month. Management-board member Lisa Davis, who is responsible for the company's overall energy operations out of Houston, will serve as acting division head, the company said. DWS's Mr. Gebhardt questioned Siemens's decision to centralize control over all the company's energy operations, including power generation, outside Germany. "Location makes a difference," he said. "Lisa Davis has experience in oil and gas, but not that much in power generation." Ms. Davis, an American who joined Siemens from Royal Dutch Shell PLC last year, will be responsible for managing the integration of Dresser. The deal is set to close by this summer. Write to Christopher Alessi at Credit: By Christopher Alessi
Subject: Acquisitions & mergers; Shareholder meetings; Petroleum industry; Corporate profits; Crude oil prices
Location: United States--US Europe
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290; Name: Siemens AG; NAICS: 334517, 334210, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648217906
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648217906?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise on Weak Dollar, OPEC Speculation; Global Crude Market Remains Oversupplied
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
The U.S. Energy Information Administration is scheduled to release its weekly inventory update at 10:30 a.m. Wednesday, and 11 analysts surveyed by The Wall Street Journal all predicted gains, by an average of 4 million barrels.
Full text: U.S. oil prices rose Tuesday to end a three-session slide, boosted by a weaker dollar and speculation about OPEC. Light, sweet crude for February delivery, the U.S. benchmark, settled up 2.4% at $46.23 a barrel on the New York Mercantile Exchange. The front-month March contract for Brent crude settled up $1.44, or 3%, to $49.60 a barrel on London's ICE Futures exchange. Oil is priced in dollars, so when the dollar weakens, oil becomes cheaper for holders of foreign currencies. The dollar fell against all major currencies Tuesday on concern the Federal Reserve may delay an interest-rate increase. That was one of the few explanations for oil's move, said Tariq Zahir, who oversees about $3 million as managing member of Tyche Capital Advisors. He and oil analysts say stockpiles are still growing. "Fundamentally I don't think there's going to be anything to change in the near term to sustain prices," Mr. Zahir said. U.S. crude stocks, already at their highest January level in more than 80 years, are expected to keep rising. The U.S. Energy Information Administration is scheduled to release its weekly inventory update at 10:30 a.m. Wednesday, and 11 analysts surveyed by The Wall Street Journal all predicted gains, by an average of 4 million barrels. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 12.7-million-barrel gain in crude-oil supplies, according to an industry source. The group also said that gasoline supplies fell by 5 million barrels and distillate stocks fell by 700,000 barrels, according to the source. Some analyst suggested that key members of the Organization of the Petroleum Exporting Countries might finally be showing signs they were willing to respond to the drop in prices by cutting back on their supplies. On Monday, OPEC's secretary-general, Abdalla Salem el-Badri, said oil prices appeared to have bottomed out and could be poised for a rebound. But Mr. el-Badri also said OPEC intends to stick to its decision to keep output stable. And on Tuesday, Saudi Aramco, the state-owned oil company, said it would postpone some projects. Its CEO emphasized Saudi Arabia "will not single-handedly balance the market in a downturn," according to news reports. While some of the comments seem bearish, they aren't as strongly bearish as Saudi leaders have been in the past, Simmons & Co. International said Tuesday in a research note. It is "tough to draw strong conclusions," but this could be a sign that Saudi Arabia is at least willing to join a coordinated response with other producers, it said. "A lot more guys are saying these guys are going to capitulate soon. I don't necessarily think that's true," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "But there definitely is an internal battle going on." Crude-oil prices have tumbled since midsummer and again in the fall after OPEC decided at its November meeting not to cut its output despite a combination of a global supply glut and lackluster demand. The oil market still looks fundamentally weak despite initial signs that oil prices may be stabilizing around $47 to $51 a barrel, analysts at Energy Aspects said. Estimating that the 93 million barrels a day global oil market is oversupplied by 1.3 million barrels a day, UBS cut its forecast for the average Brent price this year to $52.50 a barrel from $69.75, and for WTI to $49 a barrel from $64.75. Gasoline futures for February delivery gained 3.34 cents, or 2.5%, to $1.3501 a gallon. Diesel futures gained 2.3 cents, or 1.4%, to $1.6628 a gallon. Georgi Kantchev, Eric Yep and James Ramage contributed to this article. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Crude oil prices; Petroleum industry; Advisors; American dollar; Futures; Supplies
Location: United States--US
Company / organization: Name: Saudi Arabian Oil Co; NAICS: 211111; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online) New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648245050
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648245050?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Caterpillar Slips Off Its Upward Profit Path Again; Heavy-Machinery Maker Warns on Falling Oil, Coal, Copper Prices
Author: Hagerty, James R
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
The Peoria, Ill.-based maker of construction and mining machinery, hurt by falling prices for oil, copper and other commodities, reported a 25% plunge in its fourth-quarter profit and forecast a 9% drop in sales and a 22% drop in per-share earnings for 2015.
Full text: Caterpillar Inc., which has bulked up over the past few years to prepare for a long-term boom in developing-world spending on highways, ports and other infrastructure, is finding the road ahead bumpier than it thought. The Peoria, Ill.-based maker of construction and mining machinery, hurt by falling prices for oil, copper and other commodities, reported a 25% plunge in its fourth-quarter profit and forecast a 9% drop in sales and a 22% drop in per-share earnings for 2015. "It's shaping up to be a much tougher year than we were expecting" three months ago, Mike DeWalt, a Caterpillar vice president, told analysts in a conference call on Tuesday. Business is being hurt by the crude-oil price drop to around $46 a barrel from $80 in October and $100 a year ago. Also hitting Caterpillar results were lower prices for copper, coal and iron ore, which are deterring mining companies from buying new equipment. "We were hoping that 2014 was the bottom" for the mining slump, Mr. DeWalt said, but now "prospects for a rebound in 2015 are probably just not there." Meanwhile, Caterpillar expects sales to fall in China this year as that country's economy continues to slow. Doug Oberhelman, chief executive, promised further cost cutting in 2015, though Mr. DeWalt said no major plant closures are on the horizon. Restructuring costs this year are forecast at $150 million, down from $441 million in 2014, when the company faced heavy expenses for scaling back a large plant in Gosselies, Belgium. Caterpillar's global work force at the end of 2014 was 130,743, down 2% from a year earlier. Caterpillar said it expects per-share earnings of about $4.60 in 2015, down from $5.88 in 2014. Coming out of the latest recession, Caterpillar earnings per share jumped to $8.48 in 2012 from $1.43 in 2009. Then a slump in mining investment knocked earnings down 32% for 2013. As Caterpillar rushed to close plants and reduce its work force, earnings began recovering in 2014; now the collapse of oil prices has hit potential profit. Lower oil prices will eventually spur economic growth, said Caterpillar, but the company noted it wouldn't "occur soon enough to have a significant impact on our 2015 sales." After peaking at $65.9 billion in 2012, sales will be down for the third year in a row, Caterpillar expects. The last time the company's sales declined for three consecutive years was in the early 1930s, during the Great Depression. Sales for 2015 could be about $50 billion, down from $55.18 billion in 2014, Caterpillar said. Fourth-quarter profit fell to $757 million, or $1.23 a share, from $1.0 billion, or $1.54 a share, a year earlier. Sales edged down 1% to $14.24 billion. Excluding restructuring costs, earnings per share were $1.35 in the latest quarter, down from $1.68 a year earlier. Wall Street had expected earnings before restructuring charges of about $1.55 in the latest quarter, according to FactSet. Operating profit from construction machinery dropped 26% in the latest quarter to $362 million, while mining was down 67% to $72 million. The energy and transportation unit, which makes a wide variety of engines, had operating profit of $1.08 billion, up 10%. But that unit, Caterpillar's main source of strength in the past few years, is expected to sputter in 2015 as demand for engines used in oil exploration and development falls. Caterpillar's sales of railroad locomotives are expected to drop as the company races to catch up with tougher U.S. emissions standards. The surging dollar "will not be good for U.S. manufacturing or the U.S. economy," Mr. Oberhelman said. But Caterpillar benefits in some respects because it has large amounts of production capacity in Europe and Asia. Mr. Oberhelman said the European factories, once "dysfunctional," are starting to perform much better after years of streamlining and cost cuts. The plant in Grenoble, France, where workers took managers hostage during a dispute in 2009, is now a model performer, he said. A weaker euro should make those plants more competitive for exports to other parts of the world. "The currency benefit will just be kind of gravy on that" restructuring story, Mr. Oberhelman said. Write to James R. Hagerty at Credit: By James R. Hagerty
Subject: Earnings per share; Construction equipment industry; Financial performance; Stock prices; Corporate profits; Recessions
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publicationdate: Jan 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648296876
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Slump Seen Crimping Near-Term Helicopter Demand; Airbus Helicopters Sees Risk of Contracts Being Postponed
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
[...]we will see reduced demand for helicopter services," Usman Ahmed, a senior analyst at the International Bureau of Aviation said.
Full text: PARIS--Sharp cuts in oil and gas exploration budgets at companies from BP PLC to Royal Dutch Shell PLC are expected to crimp near-term helicopter demand as providers of these reassess operational priorities in a period of low crude prices. The rapid decline in oil prices has created a large amount of uncertainty about market prospects, said Guillaume Faury, president of Airbus Helicopters. Users are scrambling to redeploy assets to projects that are still profitable at oil below $50 per barrel. Oil prices have declined more than 50% since June forcing exploration companies to shelve projects no longer economical at such prices. Oil companies capital expenditure plans to ease pressure on their bottom line. "We see a trend of cost reductions in this industry and this will trigger contracts being postponed," Mr. Faury said on Tuesday. The Airbus GroupNV rotorcraft unit generates about 15% of its business from sales to the oil and gas sector. Those customers typically use larger more capable rotorcraft that also cost more and deliver better margins for manufacturers. "The offshore oil and gas production industry is already responding to the falling oil prices by switching off rigs, cutting staff and putting on hold new projects. As a result we will see reduced demand for helicopter services," Usman Ahmed, a senior analyst at the International Bureau of Aviation said. Delivery rates for rotorcraft are likely to come under pressure in the next two years "as operators adjust to the new market conditions and respond to reduced growth in the exploration sector," Mr. Ahmed said. Airbus is already seeing some effects with a contract for its new EC175 helicopter to a Russian customer in limbo. UTAir was a launch customer for the rotorcraft with a commitment to take 15 of them to service the oil and gas sector. It received its first one last year but additional deliveries are suspended for now amid Russia's difficult economic situation, Mr. Faury said. Volatility is affecting not just the makers of rotorcraft. Shares in helicopter operators such as CHC Group and Bristow have performed poorly in recent months as big oil and gas customers reviewed new projects. Industry analysts say they believe these buyers of rotorcraft may hold off on placing big additional orders until greater certainty emerges about plans of exploration companies. Still demand won't disappear entirely as many oil companies have long-term services agreement and still need to access and maintain rigs that remain operational. "It is unlikely that the current long-term transportation contracts will be canceled as these account for only small percentage of the overall rig operations cost," Mr. Ahmed said. Mr. Faury said the renewed focus on costs in the oil and gas sector could also spur long-term fleet replacement needs as customer favor new, more efficient models over existing equipment. Some of the company's Super Puma helicopters have amassed as many as 40,000 flight hours and need replacing, he said. Airbus Helicopters, which saw orders dip to 402 net bookings in 2014 and deliveries slump to 471 rotorcraft, is hoping military contracts this year may help offset weakness in other markets. Poland and South Korea are among the countries looking to place deals for their armed forces. The European helicopter maker faces tough competition in some of those overseas markets from rivals including United Technologies Corp.'s Sikorsky unit, the world's largest maker of military helicopters. United Technologies on Monday reported a 19% sales jump at Sikorsky for last year though the unit's operating profit retreated. Mr. Faury said deliveries this year should be similar to last year's level, though with a greater mix of the larger, more lucrative models. Order intake should surpass deliveries even though the market for police and emergency medical services helicopters will likely remain weak for another two years. Write to Robert Wall at Credit: By Robert Wall
Subject: Petroleum industry; Defense contracts; Energy economics; Crude oil prices
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Airbus Helicopters; NAICS: 336411; Name: United Technologies Corp; NAICS: 336411, 336415, 333314, 333611, 333921
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648296893
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648296893?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico Reports December Trade Surplus; Manufacturing Offsets Oil; Full-Year 2014 Deficit Wider Than 2013, But Small in Terms of Overall Trade
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
MEXICO CITY--Mexico ran up a trade surplus in December as a jump in exports of , compared with a year before, offset a slump in petroleum exports caused by lower world crude oil prices.
Full text: MEXICO CITY--Mexico ran up a trade surplus in December as a jump in exports of , compared with a year before, offset a slump in petroleum exports caused by lower world crude oil prices. The $254 million surplus last month brought the trade balance for the full year to a deficit of $2.44 billion, the National Statistics Institute said Tuesday. The surplus, smaller than the $1.63 billion surplus in December of 2013, compared with expectations of a $718 million deficit according to the median estimate of eight economists polled by The Wall Street Journal. The full-year 2014 deficit was wider than 2013's shortfall of $1.18 billion, but still small in terms of Mexico's overall trade, which was close to $800 billion last year--including exports and imports. Petroleum exports fell 43.7% in December from a year before as the average price of Mexico's export crude oil fell to $52.37 a barrel from $71.64 in November and $91.78 in December of 2013. Crude oil export volume was 1.237 barrels a day, up from 1.23 million the previous month but below the 1.308 million barrels a year before. The drop in petroleum exports was offset last month by a 15.8% increase in exports of manufactured goods, led by the auto industry--which shipped out 18.6% more vehicles and auto parts. Oher manufactured exports rose 14.7%, with double-digit gains in machinery and equipment, appliances and electronic goods. The manufacturing industry, buoyed by U.S. demand, has been the main driver of the Mexican economy, which is expected to have expanded about 2.2% last year. The statistics institute reported Tuesday that its economic activity indicator for November rose 0.5% from October, with gains in industrial output and services partly offset by lower agricultural production. November activity was up 2% from a year earlier. Consumer goods imports rose 7.7% in December despite a weaker , which depreciated 5.7% in the month and was down 11% against the U.S. dollar in 2014. Imports of , used in production processes, rose 13.1% from a year before, while imports of machinery and equipment were up just 1.7%. Write to Anthony Harrup at Credit: By Anthony Harrup
Subject: Exports; Petroleum industry; Agricultural production; International trade; Crude oil prices
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648345156
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648345156?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada Budget Watchdog Sees Small Deficit; Rout in Oil Prices Seen Pushing Canadian Government to Small Deficit
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
The Bank of Canada said last week lower crude oil prices were "unambiguously negative" for the Canadian economy, and cut its benchmark policy rate by 25 basis points to 0.75%, calling the rate cut an insurance policy against any economic shocks.
Full text: OTTAWA--Canada's federal government is on course to record a small budget deficit in the coming fiscal year due to the global rout in oil prices, the country's budget watchdog said Tuesday. The ruling Conservatives, led by Prime Minister Stephen Harper, have made balancing the books that year a key part of their message ahead of a national election to be held by October. In its fiscal update last fall, Ottawa projected a surplus in of 1.9 billion Canadian dollars ($1.52 billion) for fiscal 2015-2016. Mr. Harper's government has stuck to the pledge even as the plunge in oil prices has intensified, pushing prices down more than 50% from last summer's levels. Crude is Canada's top export, and Canadian Finance Minister Joe Oliver has delayed the introduction of the government's budget plan, saying he needs more information about the impact of falling oil prices. The Bank of Canada said last week lower crude oil prices were "unambiguously negative" for the Canadian economy, and cut its benchmark policy rate by 25 basis points to 0.75%, calling the rate cut an insurance policy against any economic shocks. The worry is the oil-price decline will weigh on Canada's terms of trade, or the difference between what producers get for their exports and the cost of imports. It is expected to dampen income growth and in turn slow growth in nominal gross domestic product, or the base of income from which governments extracts tax revenue. Toronto-Dominion Bank economists say nominal GDP is set to grow by a meager 1.1% in 2015, which would be the slowest pace in a non-recession year since 1976. Many companies in Canada's energy patch have scaled back capital-expenditure plans or cut their dividends. Capital spending by energy companies represent roughly 20% of all business investment in Canada. Canada's Office of the Parliamentary Budget Officer said under a scenario in which crude oil prices average $48 a barrel in 2015, Ottawa is set to record a deficit of C$400 million in fiscal 2015-2016, which starts April 1. That scenario assumes Ottawa applies its annual C$3 billion contingency set-aside toward deficit reduction. Mr. Oliver said Monday he would not rule out using the cash reserve for such purposes. In another scenario, in which crude oil prices average $51 a barrel in 2015, Ottawa could run a small surplus of C$700 million, but that too assumes the government uses the cash reserve, the watchdog said. In the Canadian legislature Tuesday, Mr. Oliver said the budget watchdog's report indicated the Conservative government "is well within the margin of being able to balance the budget, and in fact we will do so." The watchdog said its projections should be viewed as a best-case scenario for federal finances, given they don't incorporate any downward revisions to growth in real gross domestic product. Ottawa's fall fiscal update envisaged 2.6% GDP growth in 2015, based on a survey of private-sector economists. But those same economists have since downgraded their forecasts to the low 2% range. The Bank of Canada last week cut its growth forecast for 2015 to 2%. Write to Paul Vieira at paul.vieira@wsj.com Credit: By Paul Vieira
Subject: Crude oil; Crude oil prices; Petroleum industry; Terms of trade; Capital expenditures; Budget deficits; Recessions; Gross Domestic Product--GDP; Economists
Location: Canada
People: Harper, Stephen
Company / organization: Name: Bank of Canada; NAICS: 521110; Name: Toronto-Dominion Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language ofpublication: English
Document type: News
ProQuest document ID: 1648345457
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648345457?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Philippine Stocks Add to a Hot Streak; Emerging Middle Class Hypercharges Growth; a Boost From Oil Prices
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
The Philippines "doesn't have the negative risk from currency volatility as countries like Indonesia do," says Herald van der Linde, head of equity strategy for Asia, excluding Japan, at HSBC Holdings PLC. On top of that, Mr. van der Linde says, investors have faith in the country's strong earnings growth--projected at 12.8% this year. [...]he says, there is a consensus that, at current levels, Philippine stocks already reflect the anticipated impact of an increase in domestic interest rates.
Full text: One of the world's top-performing stock markets since the 2008 global financial crisis, that of the Philippines, is extending its winning streak, driven by a fast-growing economy and investors seeking to gain from a global oil-price slump. The country's benchmark stock index has risen in every one of the past six years to quadruple over that period, taking the value of the market to $219 billion. Up 5.5% so far in 2015, Philippine stocks achieved a record-high close Tuesday. Markets in India and Indonesia are also near their highest levels ever. The primary draws have been a growing young population and an emerging middle class that is spending more, hypercharging growth to 6% or more in each of the past three years, according to the World Bank. Economists at the bank expect growth to accelerate this year, making the Philippines especially appealing as the global economic outlook dims. A constant flow of cash sent home by Filipinos working overseas will keep up spending, economists say. At the same time, President Benigno Aquino III is trying to tackle corruption and ramp up infrastructure development, encouraging foreign investment. Commodity-price declines have hammered emerging markets such as Russia, Brazil and Malaysia by denting earnings of their exporters. But the rout has been a plus for the Philippines, a net importer of oil, like many of its Asian neighbors. Economists expect lower transport and household costs to leave local consumers with more cash to spend on other items. Bank of America Merrill Lynch says the Philippines is among the countries expected to get the largest boost from the oil slide. The bank estimates that every 10% drop in oil prices should boost growth by 0.3 percentage point. The "macroeconomic settings are favorable" in the Philippines, says Khiem Do, multi-asset fund manager at Barings Asset Management, which manages [euro]35.4 billion ($39.8 billion) globally. Barings funds hold a heavier weighting of Philippine shares than a benchmark of Asian shares by index provider MSCI. They have snapped up consumer-focused stocks, including shopping-mall proprietors and companies active in the residential-property market. The World Bank estimates that the Philippine economy will grow at 6.5% this year, up from an estimated 6% in 2014, pulling ahead of several nearby countries. Thailand, Indonesia and Vietnam are projected to grow at 3.5%, 5.2% and 5.6% this year, respectively. The recent rally has left Philippine stocks expensive--the market trades at more than 19 times earnings forecast for the coming year, above its five-year average of 16.4, according to HSBC research. The current average for stocks in Asia outside of Japan is 11.7 times. But fund managers appear to find that premium acceptable for now, especially as they say the Philippine government appears more stable than neighbors like Thailand. "We are comfortable owning stocks with higher multiples if these levels are justified by our expectations for growth," says Patricia Ribeiro, senior portfolio manager at American Century Investment. The firm, which manages $144 billion globally, is invested in Universal Robina Corp., the food-making unit of JG Summit Holdings, one of the nation's largest firms. Other indications are also positive. The Philippine government raised $2 billion this month by selling bonds at record-low borrowing costs, signaling confidence in Manila's ability to pay its debts. The Philippine peso remained relatively stable last month, while in neighboring Indonesia, which runs a current-account deficit, the rupiah fell against the U.S. dollar. The Philippines "doesn't have the negative risk from currency volatility as countries like Indonesia do," says Herald van der Linde, head of equity strategy for Asia, excluding Japan, at HSBC Holdings PLC. On top of that, Mr. van der Linde says, investors have faith in the country's strong earnings growth--projected at 12.8% this year. Within Asia, HSBC says, only India and South Korea are expected to have faster increases in corporate profits. Finally, he says, there is a consensus that, at current levels, Philippine stocks already reflect the anticipated impact of an increase in domestic interest rates. The potential for an increase had been hanging over markets in the second half of 2014, he says. And in recent weeks, investors have also warmed anew to the world's stronger emerging markets. Although the U.S. Federal Reserve is expected to raise interest rates this year, attracting funds back to the U.S. market, Japan and the eurozone will buy large amounts of government bonds, keeping yields at rock bottom on many low-risk investments. That is expected to channel funds into riskier areas, such as Philippine stocks, where potential returns are higher. The Philippine Stock Exchange Index rallied 23% in 2014 even as fears of a rate increase by the Fed sparked volatility globally late in the year. Investors world-wide put a net $1.3 billion into Philippine stocks last year, and they have kept buying so far in January, according to Institute of International Finance, a trade group for the financial-services industry. Jake Maxwell Watts contributed to this article. Write to Chao Deng at Credit: By Chao Deng
Subject: Emerging markets; Stock exchanges; Investments; Economists
Location: Philippines Indonesia India
People: Aquino, Benigno III
Company / organization: Name: Bank of America Merrill Lynch; NAICS: 522110, 551111; Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648388646
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648388646?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Big Oil Faces Time of Reckoning; Shell, BP and Others to Report Earnings, Reveal What Role Lower Crude Prices Played On Results
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 Jan 2015: n/a.
Abstract:
The huge, integrated oil companies are cushioned somewhat from the steep fall in prices by their refining and other processing businesses, which often benefit from a decline in crude since it lowers their cost of raw materials.
Full text: LONDON--In the coming days, the world's biggest publicly traded oil companies will report fourth-quarter earnings, offering the best look yet at the bite lower crude prices have taken out of Big Oil. For BP PLC, lower oil prices are just one headwind. A federal trial now under way in New Orleans could levy penalties of for the oil spill in the Gulf of Mexico. Meanwhile, BP owns nearly 20% of Russian producer OAO Rosneft. Kremlin-controlled Rosneft faces Western sanctions on exporting certain oil-development technology to Russia. Rosneft is also struggling with the falling ruble and weaker oil prices. BP, which has sold more than $40 billion in assets to pay cleanup and legal costs from the Gulf spill, is also trying to rein in costs that are higher than those of some competitors. Royal Dutch Shell PLC kicks off earnings on Thursday--the first among the four biggest nonstate-owned oil companies, or "super majors," to report. While analysts expect a hit from lower oil prices, they predict Shell's quarterly results will look good in comparison to the year-earlier quarter. Before announcing earnings in January of 2014, Shell issued its first profit warning in a decade as issues including high costs and poor refinery margins ate into earnings. Chevron Corp. reports on Friday, with Exxon Mobil Corp., the world's biggest oil company by market value, reporting on Monday. BP follows on Tuesday. Few analysts are predicting financial Armageddon at BP or at its big competitors. The huge, integrated oil companies are cushioned somewhat from the steep fall in prices by their refining and other processing businesses, which often benefit from a decline in crude since it lowers their cost of raw materials. The companies are loaded with cash and have taken on relatively little debt after years of high oil prices. And even at today's lower prices, many of the fields they have developed remain profitable. Still, among the super majors, BP may be especially vulnerable, say investors and analysts. BP could face penalties far higher than the $3.5 billion it set aside for the Gulf case, potentially forcing it to dip further into its cash reserves. In July, BP reaped nearly $700 million in dividends from its first full year as a Rosneft shareholder. Analysts expect those payments to be much smaller now. "BP has a very sound, long-term resource base," said Jason Kenney, an analyst with Santander. "But it's got some quite significant near-term earnings and cash pressures relative to its peer group." In addition to Russia and the prospective U.S. penalties, the company has a higher cost basis than competitors, he said. Mr. Kenney calculates that BP's technical cost per barrel--which includes spending on production and exploration along with depreciation--is $32.93, compared to $30.69 for Shell, $30.13 for Chevron and $23.20 for Exxon. That is due in part to BP's rapid divestments outpacing cuts to spending. BP said last month that while its production at the end of 2013 was about 25% lower than before the Gulf spill, its head count was slightly higher. Now, the company is cutting those costs. It recently announced layoffs in Scotland, and this week said it was . The company's recent high costs also stem from a series of investments it has made in big projects. Seven of those came online last year--a development that would normally be positive, except it happened just before oil prices slumped. The profit margins look far less attractive than when they were planned. For example, BP executives including Neil Shaw, chief operating officer for the company's upstream projects, have called Angola and the North Sea "high-margin areas." But BP's Clov project in Angola, which came online last year, needs oil prices of about $60 per barrel--about 20% higher than current prices--over its lifetime to break even, Citigroup analysts estimate. A BP North Sea project that recently began producing, called Kinnoull, has a break-even price of closer to $70 per barrel, Citi estimates. A BP spokesman says such projects are planned to produce for decades, and aren't approved based on one-year oil-price fluctuations. BP, a staple of British pension fund portfolios, must also maintain its dividend. The company has said in recent months that it intends to maintain "progressive" dividends. That is important, says Ivor Pether, a fund manager at Royal London Asset Management, which owns BP shares. "In a sense, that is the main thing they do" as far as investors are concerned, he said. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry; Acquisitions & mergers; Corporate profits; Costs; Energy economics; Fines & penalties; Crude oil prices
Location: Russia Gulf of Mexico
People: Kenney, Jason
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 27, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: Ne ws
ProQuest document ID: 1648427886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648427886?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Export Oil for Lower Domestic Price; you correctly explain that exporting domestically produced oil has the dual benefit of reducing our fuel prices and placing economic pressure on our oil-producing adversaries.
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
In 2012, a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by the Associated Press showed no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.
Full text: In (Review & Outlook, Jan. 17) you correctly explain that exporting domestically produced oil has the dual benefit of reducing our fuel prices and placing economic pressure on our oil-producing adversaries. Last June 25 your paper reported that "the Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades." Data from the Energy Information Administration show that domestic crude exports began soaring during the week ending June 20. The price for benchmark Brent crude went into free fall that very same day. Coincidence? I think not. We can "drill, baby, drill" all we want, but a domestic oil glut will have no effect on fuel prices unless we export it into global markets. In 2012, a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by the Associated Press showed no statistical correlation between how much oil comes out of U.S. wells and the price at the pump. But these 36 years were entirely during the oil-export ban. The 1975 ban was an ill-conceived "common-sense solution" in response to the Arab oil embargo. While it seemed intuitively clear to most Americans that we shouldn't export oil when we could use it to keep our domestic fuel prices down, this was belied by counterintuitive economic reality, and our politicians have lacked the means or the will to explain this reality to us, leaving the ban in place for decades. Short of a repeal of the ban, the Obama administration deserves some measure of credit for waiving it. Philip Stephens Mill Valley, Calif.
Subject: Petroleum industry; Prices; Exports; Petroleum production
Location: United States--US
Company / organization: Name: Associated Press; NAICS: 519110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Opinion
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648427885
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648427885?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil Nears Six-Year Low on Growing Supply Glut; Banks Continue to Slash Price Forecasts for This Year
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
"There is a much greater degree of uncertainty in the dynamics that will shape the physical crude demand-supply balance and crude pricing than we have seen in recent history," said David Hewitt, managing director and co-head of oil research at Credit Suisse.
Full text: U.S.-crude prices landed at their lowest close in nearly six years on news that oil in storage is building up at a historic pace. U.S. oil supplies rose by 8.9 million barrels in the week ended Jan. 23, the U.S. Energy Information Administration said Wednesday. It adds to at least an 80-year high in stockpiles, now near 407 million barrels, EIA said. With last week's 10.1-million-barrel addition, this is the largest two-week increase in stockpiles in nearly 30 years, according to CIBC World Markets. Prices initially rose on the news, analysts said, because the increase was less than projected by the American Petroleum Institute, an industry group. But ultimately the total size of stockpiles encouraged traders to sell, discouraged from any belief oil prices can turn around soon, analysts said. Prices have now fallen 59% since June. Oil companies have cut capital spending during the crash, but U.S. crude production keeps soaring. It hit 9.2 million barrels a day last week, a record high in weekly data dating to 1983, EIA said. Refineries are shutting down for maintenance and futures prices are encouraging everyone to put oil in storage now, adding to the glut. "There's nothing positive," said Andy Lebow, senior vice president for energy at Jefferies LLC. "You have a glass that's already full or about full, and the liquids just keep coming." Light, sweet crude for March delivery, the U.S. benchmark, settled down $1.78, or 3.9%, at $44.45 a barrel on The New York Mercantile Exchange. It was the lowest settlement since March 11, 2009, when it settled at $42.33 a barrel. The front-month March contract for Brent crude settled down $1.13, or 2.3%, at $48.47 a barrel on London's ICE Futures exchange. "It's premature to look for a bottom," said Tim Evans, analyst at Citi Futures Perspective in New York. Earlier in the day, Barclays slashed its oil-price forecasts for this year by around 40%, saying it expects a long period of oversupply stretching at least into early 2016. The bank cut its average price estimate for Brent to $44 a barrel from $72 and for West Texas Intermediate to $42 a barrel from $66. "We expect to see further downside to prices in the next few months, with both contracts likely to trade into the high $30s before the oil price decline is arrested," Barclays said. Credit Suisse also cut its average price forecast for Brent this year to $58 a barrel from $75.25, saying oil prices could recover by the end of the year. "There is a much greater degree of uncertainty in the dynamics that will shape the physical crude demand-supply balance and crude pricing than we have seen in recent history," said David Hewitt, managing director and co-head of oil research at Credit Suisse. February reformulated gasoline blendstock, or RBOB, settled down 0.51 cent, or 0.4%, at $1.345 a gallon. February diesel settled down 3.1 cents, or 1.9%, at $1.6318 a gallon. Georgi Kantchev, Nicole Friedman and Eric Yep contributed to this article. Write to Timothy Puko at tim.puko Credit: By Timothy Puko
Subject: Petroleum industry; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Credit Suisse Group; NAICS: 522110; Name: American Petroleum Institute; NAICS: 8139 10, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648482926
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Last updated: 2017-11-22
Database: The Wall Street Journal
Export Oil for Lower Domestic Price
Author: Anonymous
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Jan 2015: A.14.
Abstract:
In 2012, a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by the Associated Press showed no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.
Full text: In "Oil Export Myths" (Review & Outlook, Jan. 17) you correctly explain that exporting domestically produced oil has the dual benefit of reducing our fuel prices and placing economic pressure on our oil-producing adversaries. Last June 25 your paper reported that "the Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades." Data from the Energy Information Administration show that domestic crude exports began soaring during the week ending June 20. The price for benchmark Brent crude went into free fall that very same day. Coincidence? I think not. We can "drill, baby, drill" all we want, but a domestic oil glut will have no effect on fuel prices unless we export it into global markets. In 2012, a statistical analysis of 36 years of monthly, inflation-adjusted gasoline prices and U.S. domestic oil production by the Associated Press showed no statistical correlation between how much oil comes out of U.S. wells and the price at the pump. But these 36 years were entirely during the oil-export ban. The 1975 ban was an ill-conceived "common-sense solution" in response to the Arab oil embargo. While it seemed intuitively clear to most Americans that we shouldn't export oil when we could use it to keep our domestic fuel prices down, this was belied by counterintuitive economic reality, and our politicians have lacked the means or the will to explain this reality to us, leaving the ban in place for decades. Short of a repeal of the ban, the Obama administration deserves some measure of credit for waiving it. Philip Stephens Mill Valley, Calif.
Subject: Petroleum industry; Prices; Exports; Petroleum production
Location: United States--US
Company / organization: Name: Associated Press; NAICS: 519110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2015
Publication date: Jan 28, 2015
Section: Letters to the Editor
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648502031
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Earnings: Siemens Answers Investor Critics, Defending a Deal in U.S. Oil Patch
Author: Alessi, Christopher
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Jan 2015: B.5.
Abstract:
Rival U.S. oil-services companies FMC Technologies Inc. and Dril-Quip Inc. trade at less than 16 times earnings. "Because of the acquisition, you lost a lot of credit," Henning Gebhardt, a portfolio manager at Siemens shareholder Deutsche Asset & Wealth Management, known as DWS, said in a speech at the meeting.
Full text: MUNICH -- The U.S. is likely to remain the strongest and most attractive economic region for growth in the near term for Siemens AG, Chief Executive Joe Kaeser said Tuesday as shareholders took aim at the planned acquisition of U.S. oil-equipment maker Dresser-Rand Group Inc. "The re-industrialization of the U.S. and the country's superior energy policy offer growth opportunities," Mr. Kaeser said at the annual meeting of shareholders. The "geopolitical stability" of the U.S. is an "important aspect in our acquisition policy," he added. To that end, Mr. Kaeser defended Siemens's planned $7.6 billion acquisition of Dresser, announced in September, amid some tough questioning by investors over the deal's high price. The deal, at $83 a share, values Dresser at roughly 58 times the past year's earnings. Rival U.S. oil-services companies FMC Technologies Inc. and Dril-Quip Inc. trade at less than 16 times earnings. "Because of the acquisition, you lost a lot of credit," Henning Gebhardt, a portfolio manager at Siemens shareholder Deutsche Asset & Wealth Management, known as DWS, said in a speech at the meeting. "Why was the acquisition so strategically important?" Mr. Gebhardt asked. Siemens wouldn't be able to cover its capital allocation for the deal until at least 2020, he said. "As a former CFO, you should know how to do better than this," Ingo Speich, a portfolio manager at Union Investment GmbH, another Siemens shareholder, said referring to the deal. Mr. Speich accused Mr. Kaeser of getting drawn into a bidding war with former Siemens Chief Executive Peter Loscher, who, as the chairman of Swiss pump maker Sulzer AG, had also sought a deal with Dresser. "Dresser Rand was our number-one target from a strategic point of view," Mr. Kaeser said in response to investor criticism. "This was not a gladiators fight," he added, alluding to his former boss-come-rival, Mr. Loscher. Concerns over the price of the transaction have been amplified in recent weeks as oil prices have plunged to below $50 a barrel. Despite this, institutional investors expressed overall satisfaction with Mr. Kaeser's performance compared with that of his predecessor. Mr. Kaeser, who took the helm in July after the board forced out Mr. Loscher, has undertaken a restructuring, including a 1 billion euro ($1.12 billion) cost-cutting program. Investors have largely supported the Dresser acquisition from a strategic perspective as it allows Siemens to take advantage of the U.S. shale-gas boom and leverage a new product portfolio in the oil sector. But the onset of lower oil prices has heightened unease. Mr. Kaeser said oil-market volatility was "not structural," attributing oil's slide to oversupply. He said the acquisition of Dresser would bring Siemens high synergies along with greater market access and opportunities to expand its automation-technology business. The deal is part of a larger strategy by Mr. Kaeser to streamline the company by shedding noncore businesses and focusing more on energy operations. Last month, Siemens closed a deal to acquire Rolls Royce Holdings PLC's civilian energy operations for $1.3 billion. Mr. Kaeser faced shareholders after Siemens reported results for the first quarter of fiscal year 2015 earlier on Tuesday, posting a 25% drop in net profit to 1.08 billion euros for the three months ended Dec. 31, hurt in part by macroeconomic pressures. Siemens reiterated it expects 15% growth in earnings per share in the year ending in September, amid flat revenue. An 11% decline in new orders to 18.01 billion euros underscored the pressure Siemens is facing as customers placed fewer large orders at its mobility, wind-power and renewables businesses, as well as its process industries and drives unit. Credit: By Christopher Alessi
Subject: Acquisitions & mergers; Shareholder meetings; Petroleum industry; Earnings per share; Energy policy; Company reports; Financial performance
Location: United States--US
People: Kaeser, Joe
Company / organization: Name: Dril-Quip Inc; NAICS: 333132; Name: FMC Technologies Inc; NAICS: 333 922, 333249; Name: Sulzer AG; NAICS: 333132; Name: Siemens AG; NAICS: 334517, 334210, 334220; Name : Dresser-Rand Co; NAICS: 333611, 335312
Classification: 2330: Acquisitions & mergers; 8510: Petroleum industry; 9175: Western Europe; 9190: United States; 9530: Diversified companies
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 28, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648502287
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Tumbling Oil Prices Hit U.S. Steel
Author: Miller, John W
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Jan 2015: B.2.
Abstract:
News of the shutdowns cast a pall over a remarkable comeback for the 114-year-old steelmaker. Since taking over in 2013, U.S. Steel Chief Executive Mario Longhi has aggressively cut costs and restructured operations.
Full text: PITTSBURGH -- After a robust year, highlighted by U.S. Steel Corp.'s first annual profit since 2008, the steel industry is facing an unexpected menace in tumbling oil prices, which have forced production cutbacks and even pressured prices for automotive steel. At the heart of the problem is a build-up since last decade to supply oil and gas drillers. Like many others, steelmakers saw the U.S. energy boom as their salvation. But with oil prices down more than 50% since last summer, energy companies have cut spending on projects requiring steel, and swiftly canceled orders with steel mills. "There's been an abrupt change in the near-term outlook in recent weeks," John Ferriola, chief executive of Charlotte, N.C.-based Nucor Corp., the country's biggest steelmaker, said on a conference call Tuesday. Although Nucor's fourth-quarter profit rose 23% from a year earlier to $210 million, the company warned that "market conditions in the steel mills segment in the first quarter of 2015 will be impacted by challenges in energy markets due to customer inventory reductions." Mr. Ferriola said "irrationally price imports" at "ridiculous levels" were also to blame for falling prices. Imports of steel into the U.S. jumped 34% to 41.5 million tons during the first 11 months of 2014, the latest months for which data is available, and have continued to rise despite the imposition of new import tariffs last summer, raising the chances of further trade action. "We'll be aggressive" in pursuing new tariffs, said Mr. Ferriola. The biggest blood-letting has been at U.S. Steel. On Monday, the company said it would curtail operations at two plants in Alabama and one Texas, potentially affecting more than 1,900 workers. Earlier this month, it announced temporary shutdowns at two plants, impacting 756 workers. News of the shutdowns cast a pall over a remarkable comeback for the 114-year-old steelmaker. Since taking over in 2013, U.S. Steel Chief Executive Mario Longhi has aggressively cut costs and restructured operations. His turnaround plan generated $575 million in cost savings and increased profit in 2014, the company said. On Tuesday, after five straight years of losses, U.S. Steel posted a profit of $102 million, or 69 cents a share, for 2014, compared with a loss of $1.65 billion, or $11.37 a share, in 2013. Like his counterpart at Nucor, Mr. Longhi warned of darker days ahead. "We face significant challenges from dramatically lower oil prices, lower steel prices, and the impact of the stronger U.S. dollar and global overcapacity on imports and our operations," he said in a statement. "Drilling activity has been severely cut back," said Tom Conway, a vice president with United Steelworkers, which represents workers at U.S. Steel. "And unfairly priced and subsidized imports continue to land in the U.S. market, just compounding the situation." Gas driller Antero Resources Corp. of Denver last week said it would cut capital spending by 41% this year to $1.8 billion. It now plans to operate an average of 14 drilling rigs in 2015 in the two main shale-gas drilling regions, Marcellus and Utica, down from 21 at the end of 2014. "We will continue to monitor commodity prices throughout the year and may revise the capital budget lower if conditions warrant," said Antero CEO Paul Rady. The fall in oil prices threatens to decimate a steel industry that has expanded over the last few years to supply drilling in places like the Marcellus Shale, which is centered in Pennsylvania and West Virginia, and the Gulf of Mexico. And the pain is spreading to some of the industry's other markets. The same rolls of steel coil used to make large pipes are also used to make different car parts. The benchmark price for hot-rolled coil is now at $554 per ton, down 14% from a quarter ago, around when oil prices took a dive. "It feels like every hour you're seeing things crumble," said Tom Calhoun, founder of Chicago-based Calhoun Steel, a steel distributor. "Everybody is discounting, and the hard part is when you think you've hit bottom at $600 a ton, and it keeps going down." Credit: By John W. Miller
Subject: Capital expenditures; Steel industry; Crude oil prices
Location: United States--US
People: Longhi, Mario Ferriola, John
Company / organization: Name: Nucor Corp; NAICS: 325180, 331110, 332312; Name: US Steel Corp; NAICS: 331110
Classification: 1300: International trade & foreign investment; 3100: Capital & debt management; 5310: Production planning & control; 8510: Petroleum industry; 8660: Metalworking industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Jan 28, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648503043
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Time of Reckoning for Big Oil --- Companies to Report on Lower Crude Prices, but That's Just One Headwind for BP
Author: Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Jan 2015: B.6.
Abstract:
The integrated oil companies are cushioned somewhat from the steep fall in prices by their refining and other processing businesses, which often benefit from a decline in crude since it lowers their cost of raw materials.
Full text: LONDON -- In the coming days, the world's biggest publicly traded oil companies will report fourth-quarter earnings, offering the best look yet at the bite lower crude prices have taken out of Big Oil. For BP PLC, lower oil prices are just one headwind. A federal trial now under way in New Orleans could levy penalties of as much as $13.7 billion for the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Meanwhile, BP owns nearly 20% of Russian producer OAO Rosneft. Kremlin-controlled Rosneft faces Western sanctions on exporting certain oil-development technology to Russia. Rosneft is also struggling with the falling ruble and weaker oil prices. BP, which has sold more than $40 billion in assets to pay cleanup and legal costs from the Gulf spill, is also trying to rein in costs that are higher than those of some competitors. Royal Dutch Shell PLC kicks off earnings on Thursday -- the first among the four biggest nonstate-owned oil companies, or "super majors," to report. While analysts expect a hit from lower oil prices, they predict Shell's quarterly results will look good in comparison to the year-earlier quarter. Before announcing earnings in January of 2014, Shell issued its first profit warning in a decade as issues including high costs and poor refinery margins ate into earnings. Chevron Corp. reports on Friday, with Exxon Mobil Corp., the world's biggest oil company by market value, reporting on Monday. BP follows on Tuesday. Few analysts are predicting financial Armageddon at BP or at its big competitors. The integrated oil companies are cushioned somewhat from the steep fall in prices by their refining and other processing businesses, which often benefit from a decline in crude since it lowers their cost of raw materials. The companies are loaded with cash and have taken on relatively little debt after years of high oil prices. And even at today's lower prices, many of the fields they have developed remain profitable. Still, among the super majors, BP may be especially vulnerable, say investors and analysts. BP could face penalties far higher than the $3.5 billion it set aside for the Gulf case, potentially forcing it to dip further into its cash reserves. In July, BP reaped nearly $700 million in dividends from its first full year as a Rosneft shareholder. Analysts expect those payments to be much smaller now. "BP has a very sound, long-term resource base," said Jason Kenney, an analyst with Santander. "But it's got some quite significant near-term earnings and cash pressures relative to its peer group." In addition to Russia and the prospective U.S. penalties, the company has a higher cost basis than competitors, he said. Mr. Kenney calculates that BP's technical cost per barrel -- which includes spending on production and exploration along with depreciation -- is $32.93, compared to $30.69 for Shell, $30.13 for Chevron and $23.20 for Exxon. That is due in part to BP's rapid divestments outpacing cuts to spending. BP said last month that while its production at the end of 2013 was about 25% lower than before the Gulf spill, its head count was slightly higher. Now, the company is cutting those costs. This week it said it was freezing salaries across the company. The company's recent high costs also stem from a series of investments it has made in big projects. Seven of those came online last year -- a development that would normally be positive, except it happened just before oil prices slumped. The profit margins look far less attractive than when they were planned. For example, BP executives including Neil Shaw, chief operating officer for the company's upstream projects, have called Angola and the North Sea "high-margin areas." But BP's Clov project in Angola, which recently came online, needs oil prices of about $60 per barrel -- about 20% higher than current prices -- over its lifetime to break even, Citigroup analysts estimate. A BP North Sea project that recently began producing, called Kinnoull, has a break-even price of closer to $70 per barrel, Citi estimates. A BP spokesman says such projects are planned to produce for decades, and aren't approved based on one-year oil-price fluctuations. BP, a staple of British pension fund portfolios, must also maintain its dividend. The company has said in recent months that it intends to maintain "progressive" dividends. Credit: By Justin Scheck
Subject: Acquisitions & mergers; Costs; Energy economics; Fines & penalties; Company reports; Petroleum industry; Corporate profits; Crude oil prices
Location: Russia Gulf of Mexico
People: Kenney, Jason
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2015
Publication date: Jan 28, 2 015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648503158
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648503158?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Earnings: Caterpillar Net Tumbles 25% --- Falling Prices for Oil, Minerals Poised to Shrink Revenue for Third Year in a Row
Author: Hagerty, James R
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]28 Jan 2015: B.5.
Abstract:
The Peoria, Ill.-based maker of construction and mining machinery, hurt by falling prices for oil, copper and other commodities, reported a 25% plunge in its fourth-quarter profit and forecast a 9% drop in sales and a 22% drop in per-share earnings for 2015.
Full text: Caterpillar Inc., which has bulked up over the past few years to prepare for a long-term boom in developing-world spending on highways, ports and other infrastructure, is finding the road ahead bumpier than it thought. The Peoria, Ill.-based maker of construction and mining machinery, hurt by falling prices for oil, copper and other commodities, reported a 25% plunge in its fourth-quarter profit and forecast a 9% drop in sales and a 22% drop in per-share earnings for 2015. "It's shaping up to be a much tougher year than we were expecting" three months ago, Mike DeWalt, a Caterpillar vice president, told analysts in a conference call on Tuesday. Business is being hurt by the crude-oil price drop to around $46 a barrel from $80 in October and $100 a year ago. Also hitting Caterpillar results were lower prices for copper, coal and iron ore, which are deterring mining companies from buying new equipment. "We were hoping that 2014 was the bottom" for the mining slump, Mr. DeWalt said, but now "prospects for a rebound in 2015 are probably just not there." Meanwhile, Caterpillar expects sales to fall in China this year as that country's economy continues to slow. Doug Oberhelman, chief executive, promised further cost cutting in 2015, though Mr. DeWalt said no major plant closures are on the horizon. Restructuring costs this year are forecast at $150 million, down from $441 million in 2014, when the company faced heavy expenses for scaling back a large plant in Gosselies, Belgium. Caterpillar's global work force at the end of 2014 was 130,743, down 2% from a year earlier. Caterpillar said it expects per-share earnings of about $4.60 in 2015, down from $5.88 in 2014. Coming out of the latest recession, Caterpillar earnings per share jumped to $8.48 in 2012 from $1.43 in 2009. Then a slump in mining investment knocked earnings down 32% for 2013. As Caterpillar rushed to close plants and reduce its work force, earnings began recovering in 2014; now the collapse of oil prices has hit potential profit. Lower oil prices will eventually spur economic growth, said Caterpillar, but the company noted it wouldn't "occur soon enough to have a significant impact on our 2015 sales." After peaking at $65.9 billion in 2012, sales will be down for the third year in a row, Caterpillar expects. The last time the company's sales declined for three consecutive years was in the early 1930s, during the Great Depression. Sales for 2015 could be about $50 billion, down from $55.18 billion in 2014, Caterpillar said. Fourth-quarter profit fell to $757 million, or $1.23 a share, from $1.0 billion, or $1.54 a share, a year earlier. Sales edged down 1% to $14.24 billion. Excluding restructuring costs, earnings per share were $1.35 in the latest quarter, down from $1.68 a year earlier. Wall Street had expected earnings before restructuring charges of about $1.55 in the latest quarter. Operating profit from construction machinery dropped 26% in the latest quarter to $362 million, while mining was down 67% to $72 million. The energy and transportation unit, which makes a wide variety of engines, had operating profit of $1.08 billion, up 10%. But that unit, Caterpillar's main source of strength in the past few years, is expected to sputter in 2015 as demand for engines used in oil exploration and development falls. Caterpillar's sales of railroad locomotives are expected to drop as the company races to catch up with tougher U.S. emissions standards. Credit: By James R. Hagerty
Subject: Earnings per share; Construction equipment industry; Financial performance; Stock prices; Corporate profits; Recessions; Company reports
Company / organization: Name: Caterpillar Inc; NAICS: 333120, 333618, 333924
Classification: 3100: Capital & debt management; 8670: Machinery industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 28, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648503357
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648503357?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
German Consumer Sentiment to Reach 13-Year High in February; Collapse in Oil Prices Boosts Germans' Disposable Income to Allow Other Purchases, GfK Survey Finds
Author: Bartha, Emese
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
The monthly survey by the GfK market research group suggest consumer confidence in Europe's largest economy will rise to 9.3 points in February, the highest level since a 9.6 point level in November 2001,.
Full text: FRANKFURT--German consumer confidence is set to strengthen further in February, as low energy prices that allow more scope for other expenditures buoy sentiment, a survey showed Wednesday. The monthly survey by the GfK market research group suggest consumer confidence in Europe's largest economy will rise to 9.3 points in February, the highest level since a 9.6 point level in November 2001,. The data exceeds the consensus forecast of 9.1 points of 21 analysts in a Wall Street Journal survey. "German consumers have evidently also been affected by the major collapse in energy prices over the past few weeks," said GfK in a statement, adding that reduced costs of fuel and heating oil are boosting disposable income and are giving consumers greater freedom for other spending or purchases. GfK uses survey data from the current month to derive a figure for the month to come. Consumers' economic expectations leapt for the second successive month, rising eight points to 22.5 points in January, GfK said. "German consumers feel that their economy is currently enjoying a renewed upswing," GfK said. The stabilization of the German economy toward the end of 2014 played a key role in improving consumer sentiment further. The federal statistics office said in mid-January that Germany's economic growth picked up in 2014, with a price-adjusted gross domestic product expansion of 1.5% in 2014, after increasing 0.1% the previous year. Consumers' income expectations also picked up in January, to 47.8 points from 41.0 points in December, and their intention to buy big ticket items also strengthened. Earlier this week, business confidence also beat analyst expectations, with the Ifo institute's monthly indicator rising to 106.7 in January from 105.5 in December, exceeding the 106.5 expected by analysts. Write to Emese Bartha at Credit: By Emese Bartha
Subject: Economic growth; Gross Domestic Product--GDP; Statistical data
Location: Europe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648504080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648504080?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Scandal-Hit Petrobras Quiet on Corruption Cost; Brazilian Oil Company Reports Results, Fails to Set Sum For Write Downs Linked to Corruption Probe
Author: Connors, Will; Kiernan, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Brazilian state-run oil company Petroleo Brasileiro SA reported its delayed third-quarter results Wednesday, but didn't include an estimate for how much a vast corruption scandal has cost, a move that sent Petrobras shares tumbling and raised questions about the management of one of Latin America's biggest companies. The third-quarter results, released Wednesday, were after an alleged kickback scheme involving Petrobras contracts led the company's auditing firm, PricewaterhouseCoopers, to decline to sign off on the results. Petrobras said Wednesday it posted a third-quarter 2014 net profit of 3.09 billion reais ($1.18 billion), down from 3.39 billion reais in the same period of 2013. The company's revenue totaled 88.37 billion reais in the quarter, up from 77.7 billion reais. Earnings before interest, taxes, depreciation and amortization, or Ebitda, decreased nearly 10% year-over-year to 11.7 billion reais. The third-quarter results remain unaudited. Petrobras said "we continue to work closely" with PricewaterhouseCoopers to release audited results "as quickly as possible." A PricewaterhouseCooopers spokeswoman declined to comment. Beyond those results, investors were looking for Petrobras to assign a dollar amount to the corruption scandal. Petrobras said it was "impracticable" to announce a specific corruption-related write-down because of various accounting difficulties. "The main issue for Petrobras was to gain credibility," Frederico Mesnik, the managing partner at São Paulo-based Humaitá Investimentos, which has 180 million reais under management. "When it didn't [announce a write-down], the credibility went down the drain and nothing else matters. We need to see, as investors, a credible statement with the numbers." Shares fell more than 11% in morning trading in São Paulo and more than 12% in New York. Shares have fallen 44% in the last three months. The corruption scheme involves three former Petrobras executives, some of Brazil's largest construction-companies, and a group of money launderers that allegedly colluded to inflate the cost of Petrobras contracts, and then pocketed the difference. The three former Petrobras executives . More than 30 people have been indicted so far, and more arrests are expected in the case, which is known as Operation Car Wash. Petrobras had indicated that it would include a write-down based on the cost of those inflated contracts in its earnings report, and the company says that it has been working since November to tally the financial damage from the alleged corruption scheme, but that doing so now is "impracticable." "The testimonies examined by Petrobras have indicated the commission of unlawful acts, such as cartelization of suppliers and former employees taking bribes, indicating that the payments to such suppliers were improperly recognized as part of the cost of our fixed assets, therefore requiring adjustments," Chief Executive Maria das Graças Foster said in a statement on Wednesday. Ms. Foster said disclosing a specific amount wasn't possible "since the [illegal] payments were made by external suppliers and cannot be traced back to the company's accounting records." Petrobras said it considered two possible approaches to quantifying the alleged corruption. The first would include alleged improper payments specifically mentioned in the probe as well as 3% of the value of contracts signed with the companies under investigation. That methodology resulted in "an estimated loss of BRL4.06 billion." The other approach Petrobras considered was to have certain assets appraised by independent auditors to determine the difference between their fair value and their book value. Ms. Foster said Petrobras and its independent auditors appraised 188.4 billion reais in fixed assets--about one-third of the company's property, plant and equipment--that were contracted with companies mentioned in Operation Car Wash between 2004 and April 2014, when the corruption allegedly took place. The assets' fair value was determined to be 61.4 billion reais less than their book value. "Everyone acknowledges that quantifying the impacts of corruption on the value of assets is difficult. The problem is the lack of transparency," said Rogerio Freitas, a fund manager at Rio de Janeiro's Teórica Investimentos, which has around $100 million under management. "The range is so big that it shows how little transparency the process has." Petrobras' balance sheet wasn't entirely without impairment charges, however. The company wrote off a total of 2.71 billion reais related to the construction of two refineries, Premium I and Premium II, in northeastern Brazil, after deciding not to move forward with them. The company also provided more details on a slowdown in its ambitious spending program, saying that it would reduce the pace of investments in certain projects, though it declined to say which projects, and its new budget for this year would be between $31 billion and $33 billion. Previously, the company was averaging around $44 billion a year as part of a plan to spend more than $220 billion by 2018, primarily on ramping up offshore oil production. The delay in reporting its earnings had effectively shut off Petrobras' access to capital markets, a major concern for investors since Petrobras is among the most indebted oil companies in the world, with some $170 billion in debt, according to Moody's Investors Service. On Wednesday, Petrobras said it would not need to access debt markets in 2015 "due to steps that will increase cash flow." That contrasts with a report by Fitch Ratings earlier this week that said Petrobras would likely require "at least" $15 billion to $25 billion of financing in 2015. The amount included $11 billion in debt maturing this year as well as the expected gap between the company's cash flow and its capital expenditures. Fitch said it expected the Brazilian government to step in with loan guarantees or direct financing from state development bank BNDES to cover the shortfall. Financial ratings firms have threatened to downgrade Petrobras' credit if it continued to delay reporting its earnings. In addition to Brazilian authorities, the U.S. Securities and Exchange Commission and the U.S. Justice Department are conducting their own investigations into alleged wrongdoing at Petrobras. Petrobras is also the target of more than a dozen class-action lawsuits in New York, where Petrobras shares are traded. The suits allege that Petrobras willfully misled investors about the alleged corruption. Petrobras says that it is cooperating with these investigations, and has set up an internal compliance division to deal with possible issues of impropriety going forward. Rogerio Jelmayer contributed to this article. Write to Will Connors at and Paul Kiernan at Credit: By Will Connors And Paul Kiernan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648520340
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Orders Oil Refiners to Store More Crude; China Aiming to Use Period of Low Oil Prices to Boost Nation's Energy Stockpiles
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
BEIJING--China will demand domestic oil refiners stock up on crude oil and report their inventories to the government, in the latest move by Chinese leaders to bolster the nation's energy stockpiles.
Full text: BEIJING--China will demand domestic oil refiners stock up on crude oil and report their inventories to the government, in the latest move by Chinese leaders to bolster the nation's energy stockpiles. The new rules by the National Development and Reform Commission, China's top economic planner, will require oil-processing enterprises to maintain crude-oil inventories of at least 15 days when international crude-oil prices are $130 per barrel and below, and at least 10 days of inventory when prices exceed $130 per barrel. The statement, dated Jan. 26 but released publicly Wednesday, said existing operations would be required to fulfill the new storage requirements within a year, except in special circumstances in which companies can't meet the demands in the period. The NDRC's statement said affected companies would be required to provide monthly crude-inventory reports and, in some cases, undergo on-site inspections. "Oil is an important strategic resource, and its secure and stable supply contains important meaning for economic security and the normal running of the economy and society," the NDRC's statement said. China is a , and officials have been eager to use to enact new policies and programs to shore up supplies. China's crude imports climbed 9.5% last year, in part the result of filling of commercial and strategic reserves, according to industry analysts. Lin Boqiang, an expert on China energy policy at Xiamen University, said the latest rules are another example of China's government using low oil prices to enact reforms that would be more difficult to put in place in times of higher prices. The current low price of international oil means the financial impact of filling the newly required reserves would be lighter for companies than during times of higher prices. "The government doesn't want to miss out on the low oil prices," said Mr. Lin. "If I'm the government, I believe I'm doing you a favor. It's a good time to store." Write to Brian Spegele at Credit: By Brian Spegele
Subject: Petroleum industry; Energy policy; Prices; Energy economics; Inventory
Location: China
Company / organization: Name: Xiamen University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648523846
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Argentina's YPF, China's Sinopec to Join in Oil-and-Gas Projects; Vaca Muerta in Argentina is One of World's Largest Shale Formations
Author: Turner, Taos
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
In September, Petronas agreed to partner with YPF in a deal that could lead the companies to invest up to $9 billion over the next decade. Since 2013, YPF and Chevron together have invested more than $3 billion in Vaca Muerta, located in windswept Patagonia.
Full text: BUENOS AIRES--Argentina's YPF SA and China's Sinopec signed a memorandum of understanding on Wednesday aimed at eventually partnering to develop oil-and-gas projects in the South American country, people familiar with the matter said. A YPF official confirmed that Miguel Galuccio, the company's chief executive, had signed the MOU in Beijing with Sinopec Chairman Fu Chengyu. Sinopec, which is already Argentina's fourth-leading oil producer, has no experience in unconventional oil in the country. A potential partnership could entail YPF helping Sinopec develop its conventional output while the Chinese company would invest alongside YPF to raise shale oil production. In 2010, Sinopec agreed to buy Occidental Petroleum Corp.'s unit in Argentina for $2.45 billion, part of a broader push by Chinese companies to expand and diversify their oil resources in South America. Though lower oil prices have led some companies to cut back on investment plans, oil prices in Argentina are decoupled from the international market. A barrel of oil in Argentina now goes for $77 or more compared with just under $50 for Brent crude, the global oil benchmark. Meanwhile, Chinese investors are taking a longer-term look at Argentina's massive Vaca Muerta formation, thinking about how valuable it could be for them a decade or more from now, people familiar with the talks between Sinopec and YPF said. YPF has already partnered with Chevron Corp. and Malaysia's Petroliam Nasional Bhd., or Petronas, to develop shale oil in Vaca Muerta. YPF has been aggressively courting international investors to boost unconventional energy output at Vaca Muerta, which is considered one of the world's top shale oil-and-gas prospects. In September, Petronas agreed to partner with YPF in a deal that could lead the companies to invest up to $9 billion over the next decade. Since 2013, YPF and Chevron together have invested more than $3 billion in Vaca Muerta, located in windswept Patagonia. In October, Mr. Galuccio met with Mark Albers, senior vice president of Exxon Mobil Corp., to discuss jointly developing shale oil and gas. Exxon is one of a number of companies, including Royal Dutch Shell PLC, that are already investing in unconventional energy in Vaca Muerta. Argentina ranks second in the world, behind China, in potentially recoverable shale-gas resources, with 802 trillion cubic feet, according to a U.S. Energy Information Administration report. Argentina ranks fourth world-wide in shale-oil resources, with an estimated 27 billion barrels. Argentine officials are hopeful that Vaca Muerta could do for Argentina what fracking did for U.S. oil and gas production. However, that could require up to $200 billion in investment, analysts say. Write to Taos Turner at Credit: By Taos Turner
Subject: Petroleum industry; Energy policy; Acquisitions & mergers; Petroleum production; Oil shale
Location: China Argentina Beijing China
People: Galuccio, Miguel Fu Chengyu
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: YPF SA; NAICS: 211111; Name: Petronas; NAICS: 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Occidental Petroleum Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648539328
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648539328?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cenovus Cuts Capital Spending Again, a Month After Big Cuts; Canadian Firm Had Cut 2015 Capex Plans by 15% Last Month in Wake of Oil Slump
Author: McKinnon, Judy; Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Cenovus said it would fund completion of its Christina Lake phase F program and Foster Creek phase G, which are two-thirds complete, which will allow its crude oil production capacity to grow through 2016.
Full text: Cenovus Energy Inc. said on Wednesday it would cut its planned 2015 capital spending by another 27% from because of the continued slump in oil prices. Cenovus also slashed its cash-flow projections to between 1.3 billion Canadian dollars ($1.04 billion) and C$1.5 billion, down about 49% from a forecast made in December. Investors reacted negatively, sending the Calgary-based company's shares down 7% to C$22.94 on the Toronto Stock Exchange. The cut to the company's cash-flow guidance was "larger than expected" and might signal similar moves from other Canadian oil and gas producers, TD Securities Inc. said in a research report. Cenovus said the spending cuts will be concentrated on conventional operations in southern Alberta and Saskatchewan, where it will suspend the bulk of its drilling program for the year. It said funding would continue for the construction of current expansion programs at its mainstay Christina Lake and Foster Creek oil-sands projects. But the company said it would defer spending decisions on longer-dated oil-sands expansions. "Our plan is to continue to pursue our long-term growth strategy, but at a pace we believe is more in line with the current pricing environment," Cenovus Chief Executive Brian Ferguson said. Light, sweet crude for March delivery, the U.S. benchmark, settled down $1.78, or 3.9%, at $44.45 a barrel on The New York Mercantile Exchange. It was the lowest settlement since March 11, 2009, when it settled at $42.33 a barrel. Cenovus said its supply cost at Christina Lake and Foster Creek averages between $40-45 in terms of West Texas Intermediate crude. The supply cost--an industry term which indicates profitability--includes a 9% rate of return. To cope with the oil-price drop, the company said it plans to begin reducing the size of its contract workforce and would reassign some employees at operations affected by the spending cuts to core business areas. Cenovus said it would fund completion of its Christina Lake phase F program and Foster Creek phase G, which are two-thirds complete, which will allow its crude oil production capacity to grow through 2016. But, unlike when it previously trimmed its spending in December, the company will indefinitely postpone two follow-on projects, Christina Lake phase G and Foster Creek phase H, which had been expected to start up in 2017, said company spokesman Brett Harris. "We're essentially deferring work on two new oil-sands expansions," the spokesman said. Cenovus when it scaled back 2015 spending plans amid tumbling oil prices. In December, it projected spending of between C$2.5 billion and C$2.7 billion, down about 15% from 2014 levels. It is now targeting spending of between C$1.8 billion and C$2.0 billion, saying it expects crude prices may remain low through the year. In early January, Suncor Energy Inc. announced plans to but said it would move forward with oil-sands and other expansion projects already under construction. Canadian Natural Resources Ltd., another oil-sands producer, , though like Cenovus and Suncor, aims to continue to spend on expanding output at its biggest oil-sands mine. Cenovus said it now expects total crude-oil production for the year of between 195,000 barrels and 212,000 barrels a day, down about 1% from previous projections. "I believe crude oil prices will rebound, but the timing is uncertain. We're taking the actions we deem prudent to help protect the financial resilience of Cenovus without compromising our future," Mr. Ferguson said. Even with oil prices slumping below $50 a barrel, oil-sands producers are unlikely to scale back production at their projects because of huge upfront costs, combined with long-term break-even points and lengthy production lives. Write to Judy McKinnon at and Chester Dawson at Credit: By Judy McKinnon And Chester Dawson
Subject: Crude oil prices; Petroleum industry; Capital expenditures; Petroleum production; Oil sands; Crude oil
Location: Calgary Alberta Canada Saskatchewan Canada
Company / organization: Name: TD Securities Inc; NAICS: 523120; Name: Cenovus Energy Inc; NAICS: 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: Toronto Stock Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648567373
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648567373?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Brazil's Eike Batista Resigns as Chairman of Oil Company; Announcement is Part of Óleo e Gás Participações' Restructuring Process
Author: Jelmayer, Rogerio; Magalhaes, Luciana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--Former Brazilian billionaire Eike Batista has resigned from his posts as chairman and member of the board of the oil company he created. The announcement, made late Tuesday by the firm, Óleo e Gás Participações SA, formerly known as OGX Petróleo e Gás Participações SA, is part of the . Created in 2007 with plans to become a global oil player, OGX filed for bankruptcy protection in October 2013, amid a deep financial crisis, which affected Mr. Batista's industrial conglomerate. As part of its efforts to emerge from bankruptcy, the company has converted debt into equity and has . In the process, Mr. Batista agreed to have his 50.2% stake in the firm reduced to 5%. Earlier this month, an OGX spokeswoman said that the company cut its payroll expenses by 40% in January amid falling oil prices. The company let go 35 people, or 26% of its employees, she said. At the end of last year, a local court accepted a request made by MMX Sudeste Mineração SA, a unit of MMX Mineração e Metálicos SA, for bankruptcy protection. The unit said it filed for bankruptcy to protect its operations. MMX owns MMX Sudeste Mineração, MMX Corumbá and has a 35% stake in Porto do Sudeste do Brasil. MMX became the third company of Mr. Batista to operate under bankruptcy protection, following Óleo e Gás Participações and shipbuilder OSX Brasil SA. Once the richest person in Brazil, for charges of manipulating financial markets and taking advantage of privileged information regarding the oil company he created. Mr. Batista and his attorneys have denied wrongdoing. Write to Rogerio Jelmayer at and Luciana Magalhaes at Credit: By Rogerio Jelmayer And Luciana Magalhaes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648567686
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648567686?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Sasol Shelves Plans for Louisiana Gas-to-Liquids Plant; $11 Billion Factory Project is Latest Casualty of Falling Oil Prices
Author: McGroarty, Patrick; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Both are down in the dumps," said Sandy Fielden, an analyst with energy consultancy RBN Energy LLC. [...]that situation improves, the economics of such a plant aren't good."
Full text: South African energy giant Sasol Ltd. said Wednesday it was shelving , turning one of the largest prospective foreign investments on U.S. soil into another casualty of falling oil prices. Sasol has spent years planning to expand its chemical factory outside Lake Charles, La into a sprawling facility to turn natural gas into industrial compounds and diesel. In October, Sasol committed $8 billion to equipment that will convert natural gas into ingredients for everything from formaldehyde to plastic bags. But Sasol on Wednesday said its plans have changed. Plummeting oil prices have obliged it to push back its own 2016 deadline for deciding whether to build the more expensive gas-to-diesel plant. Sasol's shares on the Johannesburg stock exchange have shed more than a third of their value since crude prices started a precipitous decline in June. "This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner," Sasol's Chief Executive Officer David Constable said in a statement. Sasol's change of heart shows how crashing oil prices have buffeted a range of energy companies. Projects worth billions of dollars are being put on hold, straining economies that had planned to benefit from new jobs and tax revenue. Among these: . Sasol's model for the fuel-conversion plant is Secunda, a four-square-mile maze of pipelines and reactors on the South African plains. The site boasts the world's longest conveyor belt, a game park patrolled by jackals and zebras--and 50 million tons of carbon dioxide emissions each year, the highest in the world from one source. Sasol built the plant four decades ago because it feared apartheid-era sanctions might cut the country off from reliable fuel supplies. South Africa doesn't pump its own oil, but it sits on 95% of Africa's coal reserves. Sasol adopted a process pioneered in Nazi Germany to turn coal and gas into liquid fuel. What Sasol designed for Louisiana would take advantage of a glut of natural gas. In addition to selling for more money within the U.S. than natural gas, diesel can also be exported for sale anywhere in the world. But the economics of creating diesel for the open market are proving more fickle than generating fuel to sustain the captive South African market that Sasol's first liquid fuel plants supplied. "We have a surplus of gas and a surplus of crude. Both are down in the dumps," said Sandy Fielden, an analyst with energy consultancy RBN Energy LLC. "Until that situation improves, the economics of such a plant aren't good." In the past decade, U.S. natural gas prices have fallen . When Sasol said it was thinking of building a gas-to-diesel plant in Louisiana in 2012, oil was worth more than 30 times as much as gas. As gas began flowing from northern shale fields to the Gulf Coast, the U.S. prepared for an investment boom that the American Chemistry Council estimated could be worth $125 billion, with many to be located in Louisiana. The scale of Sasol's proposed plant made it the mascot for dozens of foreign-owned factories that Louisiana officials hoped would create jobs and draw investment to their state. At the time, Sasol's main concern was that the price of natural gas would rise. It joined with with Canadian oil producer Talisman Energy Inc. to lock in a secure supply of cheap natural gas. "Such a steep oil price drop wasn't contemplated," said an executive who is familiar with Sasol's work in the U.S. but isn't involved in deliberations over whether to see the investments through. "If it were my call I'd say let's put that one on the shelf." Tapan Panchal in London contributed to this article Write to Patrick McGroarty at and Alison Sider at Credit: Patrick McGroarty, Alison Sider
Subject: Chemical industry; Petroleum industry; Factories; Investments; Natural gas prices
Location: United States--US Louisiana Lake Charles
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: American Chemistry Council; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648567863
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648567863?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Hess Swings to a Loss on Lower Oil Prices; Company Reports a Loss of $8 Million, or Three Cents a Share, in Fourth Quarter
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Earlier this month, Hess said that it would reduce its 2015 budget, joining a number of energy producers that have reduced spending plans amid a sharp decline in oil prices.
Full text: Hess Corp. swung to a loss in the fourth quarter as dramatically lower gas prices dragged down earnings despite increased production. Earlier this month, Hess said that it would reduce its 2015 budget, joining a number of energy producers that have reduced spending plans amid a sharp decline in oil prices. In the most recently ended quarter, the average crude-oil selling price, including the effect of hedging, fell 24% from a year earlier. "We are taking prudent steps in 2015 to reduce our spending and maintain our financial flexibility," said Chief Executive John Hess. In recent months, Hess has sold off billions of dollars in assets to raise cash and narrow its focus, which now includes a few large oil-and-gas projects, including its Bakken programs in North Dakota. In the fourth quarter, oil and gas production in the Bakken increased 50%. Overall, Hess reported a loss of $8 million, or three cents a share, compared with a profit of $1.93 billion, or $5.76 a share, a year earlier Excluding divestiture impacts and other items, adjusted earnings fell to 18 cents a share from 96 cents a year earlier. Revenue fell 19% to $2.53 billion. Analysts polled by Thomson Reuters expected a per-share profit of 20 cents and revenue of $2.14 billion. One reason earnings are lower is because numbers from the year-earlier period include more money from asset sales. Hess received $823 million in proceeds from asset sales in 2014, compared with $2.2 billion in 2013. Hess reported that average daily oil-and-gas production increased 18% to 362,000 barrels. For this year, the company expects production--excluding Libya, which continues to be affected by civil unrest--to increase 10% to 13% from 2014. This will be driven by a full year of production from the Tubular Bells field in the Gulf of Mexico, following first production in late 2014. Shares of Hess have fallen about 7% over the past 12 months through Tuesday's close. Write to Angela Chen at Credit: By Angela Chen
Subject: Profits; Petroleum industry; Losses
Location: North Dakota
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648592280
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648592280?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Jour nal
Russia Lifts Crisis Cost Estimate; Government Braces for Prolonged Period of Low Oil Prices
Author: Kolyandr, Alexander; Ostroukh, Andrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
The measures include state support of auto makers, imports substitution and the recapitalization of the banking system.
Full text: MOSCOW--Russia has raised the price tag for its anti-crisis package as it prepares for a prolonged period of low oil prices, the government plan showed Wednesday. Moscow is seeking ways to fulfill social obligations and address economic contraction since the country's key oil exports are now worth half the amount Russia had previously expected. The and a recent have also prompted the government to explore unconventional measures to avoid more negative economic fallout. The government said the overall cost of its anti-crisis measures will reach 2.34 trillion rubles ($34.6 billion), up from a previous estimate of 1.4 trillion rubles. The measures include state support of auto makers, imports substitution and the recapitalization of the banking system. The finance ministry agreed earlier this week to spend around 170 billion rubles on the plan this year. Finance Minister Anton Siluanov said Wednesday that the cost to Russia from its recent problems is around $200 billion. Mr. Siluanov as one of the causes but didn't elaborate on any others. Presenting the anti-crisis plan to the upper house of parliament, he said that Russia's economy should now adjust to the new reality. "Oil prices will remain at the low level and it's highly unlikely they will return to $100 per barrel. There will be no bouncing back any time soon, like it was in 2008-2009," Mr. Siluanov said. The combination of sanctions and oil prices is expected to push Russia . The Bank of Russia forecasts the economy will contract for the first time since 2009, with gross domestic product shrinking by up to 4%. Economists are even more pessimistic. Inflation has already reached double-digits and isn't expected to abate in coming months. Inflation is being fueled by a weak ruble. Its value has been halved in the past year by capital flight and the weak oil price. Although the finance ministry doesn't expect oil prices to recover substantially, the ruble may be lifted by shrinking imports, deputy finance minister Alexei Moiseev said Wednesday. The ruble hovered at 67.52 against the dollar Wednesday, losing around 1% on the day, but remained well above the all-time low of 80 it hit in December. Write to Alexander Kolyandr at and Andrey Ostroukh at Credit: By Alexander Kolyandr and Andrey Ostroukh
Subject: Rubles; Prices; Energy economics; Economic growth; Gross Domestic Product--GDP
Location: Russia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648592331
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648592331?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks End Lower; Falling Oil Prices Weigh Down Energy Sector
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Because of the recent strength in the dollar, EverBank's Mr. Gaffney thinks that U.S. large-cap stocks could lag behind small-cap shares, which have lower exposure to international markets and currency fluctuations.
Full text: U.S. stocks fell broadly Wednesday as a renewed decline in oil prices weighed down the energy sector. that failed to give stocks a lift, traders said. Investors had expected the Fed to refrain from making any policy changes at the two-day meeting which ended Wednesday. The Dow Jones Industrial Average dropped 195.84 points, or 1.1%, to 17191.37. The S&P 500 fell 27.39 points, or 1.4%, to 2002.16, and the Nasdaq Composite Index lost 43.50 points, or 0.9%, to 4637.99. Energy shares in the S&P 500 tumbled 3.9%, as . Fourth-quarter profits of energy companies are expected to shrink by 25% from the previous year, according to FactSet, as the oil-price dive weighs on their bottom lines. The Fed statement said U.S. economic growth remains "solid," and that the central bank would watch financial and international developments before raising rates. Investors have been parsing recent statements from Fed officials for clues about when they could raise interest rates, a move widely expected this year. Analysts say that low interest rates in the U.S. have helped support stock-market gains, since stocks look attractive compared with low-yielding government bonds, and low borrowing costs give a boost to corporate profits. "They delivered what the market expected," said Chris Gaffney, senior market strategist at EverBank Wealth Management. He said the Fed remains on track to raise rates midyear, which could mean more bumpy trading in the U.S. stock market. , pushing the yield on the 10-year note down to 1.723%, its lowest level in more than a year. Because of the recent strength in the dollar, EverBank's Mr. Gaffney thinks that U.S. large-cap stocks could lag behind small-cap shares, which have lower exposure to international markets and currency fluctuations. The U.S. dollar rally has been driven, in part, by diverging monetary policies from global central banks: As the Fed prepares to raise rates, European and Asian central banks have introduced stimulus efforts. "We're seeing a lot of central banks starting to devalue their currencies...but the U.S. is on a different path," said Mr. Gaffney. He is bullish on European stocks, since the European Central Bank last week introduced a bond-buying program. Technology stocks outperformed, with the tech sector of the S&P 500 slipping just 0.1%. Apple Inc. rallied 5.7% after " . "Apple put up very strong numbers...[which is] good following a day that was a relative bloodbath," said Brian Fenske, head of sales trading at ITG. Still, the tech sector extended its 3.3% drop from Tuesday, when a disappointing earnings report from Microsoft Corp. sent that stock down more than 9%. Microsoft shares fell an additional 3.4% on Wednesday. After Apple's report, stocks in the S&P 500 are on pace for 1.3% fourth-quarter earnings growth, according to FactSet, slightly above analysts' projections of 1.1% at the start of reporting season. But without the tech giant's 38% profit growth, S&P 500 earnings are on pace for a yearly decline of 0.5%. Profits have been weighed down by worse-than-expected bank results and the impact of falling oil prices on energy companies. Among Dow components, Boeing Co. jumped 5.4% after . But the company gave a weak outlook for profit in 2015, citing the possibility that the dive in oil prices could damage demand for fuel-efficient planes. AT&T Inc. slipped 0.4% after fourth-quarter earnings and sales narrowly beat Wall Street's expectations. The telecommunications company's results indicated some strain from higher competition among carriers. Adding to investors' jitters was a continuing slide in Greek bonds and stocks, after last weekend's election of a new leftist government. Investors fear that Syriza's victory could lead to confrontation between Greece and its creditors. Stocks of other indebted countries fell as well, with Spain's IBEX 35 down 1.3% and Italy's FTSE MIB slipping 0.8%. Germany's DAX Index gained 0.8%. In other markets, gold futures slipped 0.5% to $1285.90 an ounce. In other earnings news, Yahoo Inc. fell 3.2%, erasing early gains after it announced it would spin off tax-free its holdings in Alibaba Group Holding Ltd. Its per-share earnings beat analyst forecasts. Electronic Arts Inc. rallied 13% after the videogame maker reported strong results from the holiday-shopping season, exceeding Wall Street's forecasts for its quarterly earnings and revenue. Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Central banks; Profits; Earnings; Financial performance; Stock prices; Interest rates; Stock exchanges; Dow Jones averages; Energy industry
Location: United States--US
Company / organization: Name: Microsoft Corp; NAICS: 511210, 334614; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648592352
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648592352?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
New York's Missing Storm Buries Natural-Gas Prices; Mild Winter, Oil's Slide Depress Gas Producers
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Due to pricing links, weaker oil prices have slashed the cost of liquefied natural gas and ethylene in foreign markets.
Full text: There was a time when people were pleased that a storm turned out to be less fearsome than anticipated. But grumpy New Yorkers weren't the only ones frustrated that the promised snowmageddon didn't seem to justify the city's shutdown this week. Anyone long of natural gas is feeling the same--and they have a genuine reason. A milder winter storm remains a winter storm, which should boost demand, and prices, for gas. This is especially so in the northeastern U.S., where pipeline bottlenecks can cause prices around big demand centers like New York City and Boston to spike. That happened last winter, which was unusually harsh. In late January 2014, gas prices for delivery in and around those cities spiked to more than $70 per million British thermal units above the wholesale price at the regional Leidy trading hub. That was a premium of 1,000% or more. This week, as temperatures dropped, that premium soared to similar heights in percentage terms. But gas producers can't bank percentages. In dollar terms, they were making only about $8 to $12 more per million BTUs than the Leidy benchmark on the gas sold in those regions. The problem lies beneath. Gas changes hands at Leidy for less than $1.30 per million BTU. That is not only down from north of $7 a year ago, it is less than half where Nymex front-month gas futures trade--which are down 40% in the past year themselves. In other words, the gas market has undergone a broad collapse. Without a repeat of last year's polar-vortex flavored winter, excess supply is building up again. Gas inventories are about 5.5% below the five-year average, versus almost 13% below this time last year. They should move above the average within a few months. Production keeps rising, much of the growth coming from the Marcellus shale in the Northeast--hence, those big regional discounts. With the weather being uncooperative, gas bulls must pin their hopes on other sources of demand growth, such as gas exports and new petrochemical plants. Yet, even here, doubts are creeping in because of another market in a funk: oil. Due to pricing links, weaker oil prices have slashed the cost of liquefied natural gas and ethylene in foreign markets. That, in turn, squeezes the competitiveness of U.S. supply, even at today's low prices. Expect them to stay frozen there this year. Write to Liam Denning at Credit: By Liam Denning
Subject: Natural gas reserves; Natural gas; Statistical data; Petroleum industry; Price increases
Location: New York United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648619231
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648619231?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Drop Hits California County's Finances; Kern County Declares Fiscal State of Emergency After $61 Million Decline in Tax Revenue
Author: Lazo, Alejandro
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
California's most oil-rich region, Kern County, has declared a fiscal state of emergency after estimating it faces a $61 million decline in property tax revenue from oil properties.
Full text: California's most oil-rich region, Kern County, has declared a fiscal state of emergency after estimating it faces a $61 million decline in property tax revenue from oil properties. Supervisors of the central California county approved the emergency declaration Tuesday. The move gives the county the ability to tap reserves if necessary, and adjust how the county staffs its fire department. The county's general fund is facing an estimated $44 million reduction in oil property revenues and the county's fire fund is facing an estimated $17 million reduction, officials said. The decline in property tax revenue is based on an estimate by the county's assessor that Kern's crude price per barrel for the coming fiscal year, beginning July 1, will be $55, a drop of $44 from the same period the year prior. The county also faces an increase in costs from pension obligations and the opening of a new jail in two years, according to county documents. Write to Alejandro Lazo at Credit: By Alejandro Lazo
Subject: Energy economics; Property taxes; Fires; Tax revenues
Location: California Kern County California
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648645140
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648645140?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mexico's Energy Minister Sees Little Room for Agreement to Cut Oil Output; Oil Prices Slump to Lowest Levels in Nearly Six Years Amid Glut
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican Energy Minister Pedro Joaquín Coldwell said Wednesday he doesn't expect oil producers to agree to cut output in response to the drop in crude prices, which are at their lowest level in nearly six years. "There isn't much room via oil diplomacy to reduce hydrocarbons production to bring about an increase in prices," Mr. Coldwell told reporters. "Rather...to the extent that this drop in oil prices causes inefficient producers to leave the market, there will be an adjustment in production." Mr. Coldwell said there is "no confirmation" of a meeting next month between Mexico, Venezuela, Saudi Arabia and Russia to discuss the oil market. Mexican officials met in Vienna last year with officials from those three countries, ahead of the November meeting of the Organization of the Petroleum Exporting Countries, but no agreements were made on production. Mr. Coldwell said Wednesday that OPEC has been clear that it doesn't consider output cuts to be convenient. Mexico isn't a member of OPEC. Mexico's own crude oil production has been declining for a decade, with output currently around 2.4 million barrels a day compared with 3.4 million in 2004. Of that, Mexico exports around 1.1 million barrels a day. The drop in oil prices has pushed Mexican export crude below $40 a barrel, weighing on state oil company Petróleos Mexicanos. Mr. Coldwell said Pemex management is working on plans to reduce spending and investment, although he declined to mention specific projects. That won't affect Pemex's plans to sign up partners to develop existing projects, nor the government's first round seeking bids to develop blocks under recent changes in energy laws that allow private investment in exploration and production for the first time in nearly eight decades. "We could say that rather than less farm-outs there will be more farm-outs. Given the circumstances with the drop in the oil prices, not less reforms but more reforms," Mr. Coldwell said. Write to Anthony Harrup at Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648681692
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Harold Hamm Says U.S. Oil Firms Can Help Right the Market; U.S., the New Saudi Arabia, Needs to Cut Oil Production
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
U.S. energy producers helped crash the oil market and need to stop pumping so much crude, oil billionaire Harold Hamm told The Wall Street Journal in an interview Wednesday.
Full text: U.S. energy producers helped crash the oil market and need to stop pumping so much crude, oil billionaire Harold Hamm told The Wall Street Journal in an interview Wednesday. "We're the problem," said Mr. Hamm, chairman and chief executive of Continental Resources Inc. "We're forced by price to do our part." But Continental and its peers, despite dialing back drilling this year, expect to produce more oil at least through the first half of this year. The company is an active driller in North Dakota's Bakken Shale, a formation so rich in oil that Mr. Hamm once said it could. His prognostication of America as the new oil kingdom came true; now the country has to act like the swing producer in the oil market, he said. "The Saudis have refused to balance this thing by themselves, and I don't think they should," Mr. Hamm told a Houston audience at the Argus Americas Crude Summit. Saudi Arabia, which leads the Organization of the Petroleum Exporting Countries, has traditionally cut its own oil output to help shore up crude prices around the world. But the Kingdom is, and instead is pursuing a strategy that keeps its oil flowing even as prices collapse. Long a champion of U.S. oil production, Mr. Hamm now says the collapse in crude prices from over $107 a barrel in June to has brought the market to an artificially low level. He said $70 a barrel is a more realistic price that will allow U.S. drilling to flourish. Mr. Hamm remains bullish on U.S. shale oil and doesn't expect U.S. oil prices to fall below $40 a barrel or for the energy sector downturn to last long. "We don't believe it's going to last two years," he said. Mr. Hamm predicted a quick rebound for oil prices two months ago, but that didn't pan out. In early November, Continental Resources announced it had, taking away contracts it had in place that guaranteed it relatively high oil prices this year. At the time, crude was trading just under $79 a barrel and Mr. Hamm predicted oil would rebound to between $85 to $90 a barrel in short order. "We feel like we're at the bottom rung here on prices and we'll see them recover pretty drastically, pretty quick," he said at the time. Since then U.S. oil prices have fallen by more than 40%. The U.S. oil industry is hurt by its own ingenuity and success, Mr. Hamm said. Advances in technology, including horizontal drilling and hydraulic fracturing, have unlocked vast new oil and gas reserves. America's new energy abundance, coupled with higher-than-expected oil output in Iraq and Libya during the second half of 2014, swamped global oil markets. Continental has slashed its capital spending budget for 2015 twice, cutting it from $5.2 billion to $2.7 billion. Even so, the company has said it will pull up to 20% more oil from the ground this year compared with last as it focuses on its best prospects. Continental isn't alone. Other exploration and production companies, including ConocoPhillips and Marathon Oil Corp., have said they will spend less and drill less this year, but still pump more oil for a time. Shale wells tend to gush and then play out quickly, which means a pullback in drilling activity will lead to lower oil production across the U.S. In North Dakota, Continental has cut the number of rigs that will drill for new fuel this year by about half. Others are slowing down their drilling, too. That could result in the state's oil production--which has been rising almost every month for years--flattening out in March and finally starting to fall in May, according to a company forecast. Write to Erin Ailworth at Credit: By Erin Ailworth
Subject: Petroleum industry; Crude oil prices; Petroleum production
Location: United States--US North Dakota
Company / organization: Name: Continental Resources Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648715625
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648715625?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada's Imperial Oil Considering Sale of Esso-Branded Fuel Stations; Sites Would Be Sold to Independent Third-Party Operators
Author: King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]28 Jan 2015: n/a.
Abstract:
Exxon Mobil Corp.'s Canadian subsidiary said Wednesday that it was considering the sale of its remaining company-owned Esso-branded retail fuel stations to independent third-party operators.
Full text: Exxon Mobil Corp.'s Canadian subsidiary said Wednesday that it was considering the sale of its remaining company-owned Esso-branded retail fuel stations to independent third-party operators. Calgary-based Imperial Oil Ltd. said most of its 1,700 Esso sites in Canada already operate under that model, which sees the company supply fuel to third parties who own and/or operate the sites under the Esso banner. The move announced Wednesday covers the remaining 500 company-owned sites, and will involve a nonbinding bid process, it said. The integrated energy company also said it would look at options for the On the Run convenience-store brand in Canada. Quebec-based Alimentation Couche-Tard Inc. acquired about 450 of Exxon's On the Run convenience stores in the U.S. in 2009. "Esso has a long, successful history as a leading retailer of high-quality fuels," said Brad Merkel, vice president of fuels and lubricants at Imperial Oil. "This evaluation will determine if strategic investments, through new business partnerships, can fuel further growth of the Esso brand in Canada." The move comes as Canada's largest oil and gas producers take steps to cope with the more than 50% drop in crude oil prices since last summer. Many have scaled back capital spending plans for this year and cut their dividends. Write to Carolyn King at Credit: By Carolyn King
Subject: Petroleum industry; Crude oil prices; Statistical data
Location: United States--US Canada
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 28, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648715655
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648715655?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Scrapped: Oil Prices Shelve an $11 Billion Gulf Coast Project; $11 Billion Factory Project is Latest Casualty of Falling Oil Prices
Author: McGroarty, Patrick; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
[...]that situation improves, the economics of such a plant aren't good."
Full text: South African energy giant Sasol Ltd. said Wednesday it was shelving an $11 billion project on Louisiana's Gulf Coast, imperiling one of the largest foreign investments on U.S. soil because of the plunge in oil prices. Sasol has spent years planning to expand its chemical factory outside Lake Charles, La., into a sprawling facility to turn natural gas into industrial compounds and diesel fuel. In October, the company committed $8 billion for equipment that produces ethylene, which is used to make plastics and other products. That plant is still going forward, but Sasol said on Wednesday that a bigger project, to use natural gas rather than crude to make diesel, is on hold. Plummeting oil prices have forced it to push back its own 2016 deadline for deciding whether to build the unusual and expensive plant now that oil prices have fallen from over $100 a barrel to under $50. "This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner," Sasol Chief Executive David Constable said in a statement. Sasol's shares on the Johannesburg stock exchange have shed about a third of their value since crude prices started a precipitous decline in June. Sasol's change of heart shows how crashing oil prices have buffeted a range of energy companies, which have postponed or abandoned projects worth billions of dollars. For example, Royal Dutch Shell PLC this month dropped plans for a multibillion-dollar petrochemical plant in natural-gas rich Qatar. Companies that find and drill for oil have also said they will slash capital spending and cut thousands of jobs. The Sasol natural-gas-to-diesel plant, which would be one of only a handful in the world, relied on oil prices remaining high compared to natural-gas prices, which have been very low in the U.S. since the shale boom began in 2008. When Sasol said it was thinking of building a gas-to-diesel plant in Louisiana in 2012, a barrel of oil was worth around 40 times as much as a million British thermal units of natural gas; today the ratio trades at about 17. Sasol said that ratio must be at least 16 for the project to make economic sense. "We have a surplus of gas and a surplus of crude--both are down in the dumps," said Sandy Fielden, an analyst with energy consultancy RBN Energy LLC. "Until that situation improves, the economics of such a plant aren't good." As natural gas began flowing from shale fields to the Gulf Coast, the U.S. prepared for an investment boom that the American Chemistry Council, a trade body, estimated could be worth $137 billion from 2010 to 2023. The scale of Sasol's proposed plant made it a selling point for dozens of foreign-owned factories that Louisiana officials hoped to attract to supplement its existing refineries and chemical plants. The state offered Sasol incentives worth hundreds of millions of dollars, including funding a $20 million center aimed at training potential employees to staff the new plant. Louisiana officials say they hope Sasol will push forward with its gas-to-liquid fuel plant after oil prices recover. But already the expansion of Sasol's chemical complex is bringing jobs to the region, and billions of dollars in other investments are proceeding as planned, said Stephen Moret, the head of the Louisiana Department of Economic Development. "Whether or not Sasol completes the second phase of its planned project, Louisiana's manufacturing investment outlook continues to be outstanding," Mr. Moret said. Industry experts say that prospects for plants that convert natural gas into liquid fuels were precarious even when oil was hovering at around $100 per barrel, in part because the plants are so complex and expensive to construct. "My goodness, it was really looking shaky a long time ago," said Michelle Foss, chief energy economist the University of Texas's Center for Energy Economics. "Sooner or later you've got to pull the plug on something that's not going to work." It isn't yet clear how vulnerable plans for the region could be. Last month analysts at Goldman Sachs Group Inc. predicted that a handful of new ethylene projects might be delayed or cancelled amid high labor costs and falling margins, but said plants that have already broken ground would likely move forward. The Louisiana Chemical Association says that products like ethylene, ammonia and methanol, which is used to make formaldehyde, should hold up better than the diesel plant Sasol had planned. Sasol's model for the fuel-conversion plant is Secunda, a four-square-mile maze of pipelines and reactors on the South African plains. The site boasts the world's longest conveyor belt, a game park patrolled by jackals and zebras--and 50 million tons of carbon dioxide emissions each year, among the highest in the world from one source. Sasol built the plant four decades ago because it feared apartheid-era sanctions might cut the country off from reliable fuel supplies. South Africa doesn't pump its own oil, but it sits on 95% of Africa's coal reserves. Sasol adopted a process refined in Nazi Germany to turn coal and gas into liquid fuel. The project Sasol designed for Louisiana would take advantage of a glut of natural gas. In addition to selling for more money within the U.S. than natural gas, diesel can also be exported for sale anywhere in the world. At the time, Sasol's main concern was that the price of natural gas would rise. It joined with Canadian oil producer Talisman Energy Inc. to lock in a secure supply of cheap natural gas. The company never expected that crude prices would be a problem, said an executive who is familiar with Sasol's work in the U.S. but isn't involved in deliberations over whether to see the investments through. "Such a steep oil price drop wasn't contemplated," the executive said. Tapan Panchal in London contributed to this article. Write to Patrick McGroarty at and Alison Sider at Corrections & Amplifications Louisiana officials say new chemical projects are bringing billions of dollars in investments and tens of thousands of jobs to the state. An earlier version of this article said that the new investments and jobs were linked to Sasol's project and related economic activity. Credit: By Patrick McGroarty and Alison Sider
Subject: Energy economics; Natural gas; Petroleum industry; Chemical industry; Factories; Investments; Diesel fuels; Crude oil prices
Location: United States--US Louisiana
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: American Chemistry Council; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648733400
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648733400?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Outweighs the Fed as Stocks Tumble Again
Author: Scaggs, Alexandra; Zeng, Min; Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
Federal-fund futures, which are used to place bets on central-bank policy, showed Wednesday that investors and traders see a 12% likelihood of a rate increase at the June Fed policy meeting, according to data from CME Group Inc. It was 18% before the Fed's statement and 26% a month ago. Analysts say that low interest rates in the U.S. have helped support stock-market gains, since stocks look attractive compared with low-yielding government bonds, and low borrowing costs give a boost to corporate profits.
Full text: A sharp drop in oil prices overshadowed the Federal Reserve, with energy companies leading a selloff in U.S. stocks even as the central bank delivered what is usually good news for equities: It remains in no rush to raise interest rates. Treasurys rallied, pushing the yield on the 10-year note to its lowest level since May 2013, and the dollar rose against major currencies. Investors have been confronted with a volatile mix of economic and market moves: an improving U.S. economy and a rising dollar, ripples from the collapse in crude prices and weak economic growth and low inflation abroad. The Dow Jones Industrial Average dropped 195.84 points, or 1.1%, to 17191.37. The S&P 500 fell 27.39, or 1.3%, to 2002.16, and the Nasdaq Composite Index lost 43.50, or 0.9%, to 4637.99. Most of the blame for the selloff in stocks was pinned on a fresh drop in oil prices. With Wednesday's decline, the Dow ended 4.8% below its most recent record set last month, and the S&P closed down 4.2% from its all-time high in late December. Energy shares in the S&P 500 tumbled 3.9%, as crude-oil futures fell 3.9% to a nearly six-year low of $44.45 a barrel. Fourth-quarter profits of energy companies are expected to shrink by 25% from the previous year, according to FactSet, as the oil-price dive weighs on their bottom lines. Behind the drop in oil prices was news that U.S. oil supplies rose by 8.9 million barrels in the week ended Jan. 23, the U.S. Energy Information Administration said Wednesday. It was at least an 80-year high in stockpiles, the EIA said. With the previous week's 10.1 million-barrel addition, it was the largest two-week rise in stockpiles in almost 30 years, according to CIBC World Markets. Oil prices now have fallen 59% since June. Oil companies have cut capital spending during the crash, but U.S. crude production keeps soaring. "There's nothing positive," said Andy Lebow, senior vice president for energy at Jefferies LLC. "You have a glass that's already full or about full, and the liquids just keep coming." In the bond market, the yield on the benchmark 10-year note fell to 1.723%, from 1.825% on Tuesday. The yield has tumbled from 2.173% at the end of 2014. Bond prices rise as yields fall. The 30-year yield settled at 2.294%, breaking the previous record closing low of 2.391% on Jan. 23. Robust demand for U.S. bonds underscored concerns about the uncertain global growth outlook and deflation risks in Europe. As a nod to global uncertainty, the Fed said in a statement Wednesday that it will remain patient in raising interest rates even as the U.S. economy was expanding at a solid pace. "The bond market welcomed the Fed's reassertion that they remain patient and a rate increase is still months away," said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. Federal-fund futures, which are used to place bets on central-bank policy, showed Wednesday that investors and traders see a 12% likelihood of a rate increase at the June Fed policy meeting, according to data from CME Group Inc. It was 18% before the Fed's statement and 26% a month ago. The Fed's message drove the euro 0.8% lower against the dollar in late-afternoon trading to $1.1287, pushing toward its lowest level in 11 years. The WSJ Dollar Index, which measures the dollar against a basket of widely traded currencies, rose 0.5% to 85.49. Stock investors largely took the Fed news in stride, traders said. Analysts say that low interest rates in the U.S. have helped support stock-market gains, since stocks look attractive compared with low-yielding government bonds, and low borrowing costs give a boost to corporate profits. "They delivered what the market expected," said Chris Gaffney, senior market strategist at EverBank Wealth Management. He thinks the Fed remains on track to raise rates at midyear and said that could mean more choppy trading for stocks. Technology stocks fared better than the broader market benchmarks, with the tech sector of the S&P 500 slipping 0.1%. Apple rallied 5.7% to $115.31 after "staggering" demand for iPhones helped the company beat even the most bullish Wall Street forecasts. Apple shares are up 23% since its 7-for-1 stock split on June 9, 2014. Still, tech stocks were unable to recover ground lost during a 3.3% drop Tuesday, when a disappointing earnings report from Microsoft sent that stock down more than 9%. Microsoft shares fell an additional 3.5% on Wednesday. After Apple's report, stocks in the S&P 500 are on pace for 1.3% fourth-quarter earnings growth, according to FactSet, slightly above analysts' projections of 1.1% at the start of reporting season. But without the tech giant's 38% profit growth, S&P 500 earnings are on pace for a yearly decline of 0.5%. Profits have been hurt by worse-than-expected bank results and the impact of falling oil prices on energy companies. Among Dow components, Boeing jumped 5.4% after it posted better-than-expected quarterly results. Executives said orders should remain strong for the company's fuel-efficient jets in 2015, despite concerns that diving oil prices could dent demand. AT&T slipped 0.4% after fourth-quarter earnings and sales narrowly beat Wall Street's expectations. The telecom company's results indicated some strain from higher competition among carriers. European trading saw a continuing slide in Greek bonds and stocks, after last weekend's election of a new leftist government. Investors fear that Syriza's victory could lead to confrontation between Greece and its creditors. Stocks of other indebted countries fell as well, with Spain's IBEX 35 down 1.3% and Italy's FTSE MIB slipping 0.8%. Germany's DAX Index gained 0.8%. In other markets, gold futures slipped 0.4% to $1,285.90 an ounce. James Ramage contributed to this article. Write to Alexandra Scaggs at alexandra.scaggs@wsj.com Corrections & Amplifications Boeing executives predicted that demand for the company's fuel-efficient jets would remain strong in 2015, despite analysts'concerns about falling oil prices. An earlier version of this article about the U.S. stock market incorrectly said the company cited the possibility that diving oil prices could damage demand for fuel-efficient planes. Credit: By Alexandra Scaggs, Min Zeng and Timothy Puko
Subject: Interest rates; Stock exchanges; Investments; Profits; Federal Reserve monetary policy; Crude oil prices
Location: United States--US
Company / organization: Name: Jefferies LLC; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648733497
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648733497?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journa l
U.S. Oil Prices Drop Below $44 a Barrel in Intraday Trading for First Time Since 2009; Massive Oversupply Continues to Affect Market
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
The same hub had a 2.1 million-barrel increase last week, part of a rush of oil going into storage that sent national stockpiles to their highest point in at least 80 years, according to the U.S. Energy Information Administration.
Full text: U.S. oil prices made small gains in topsy-turvy trading that had briefly sent the market to nearly a six-year low Thursday. Bottom-pickers and sellers concerned about oversupply battled for control of a market that has fallen about 60% in six months. Private data suggested that a glut of oil kept growing in recent days, triggering Thursday's selling, but that simply drew in the type of traders who keep waiting for oil to turnaround, traders said. "They've beaten this market so into the ground that it's way overdue for a real serious correction," said Jeffrey Grossman, president of BRG Brokerage in New York. "Certainly for the near term, I don't see it as a market that is going to continue to fall away relentlessly." Light, sweet crude for March delivery, the U.S. benchmark, settled up 8 cents, or 0.2%, at $44.53 a barrel on The New York Mercantile Exchange. The price had dropped to $43.58 a barrel by about 11 a.m., the lowest point since March 12, 2009. The front-month March contract for Brent crude settled up 66 cents, or 1.4%, to $49.13 a barrel on London's ICE Futures exchange. The gap between Brent and WTI prices had closed less than two weeks ago, but Thursday it had spread to nearly $5 a barrel. Both the U.S. and global benchmarks retreated after Genscape, an energy data service, told clients that stocks at a key Oklahoma storage hub grew 1.6 million barrels in just five days, from Jan. 23 to Jan. 27, two people familiar with the data said. The same hub had a 2.1 million-barrel increase last week, part of a rush of oil going into storage that sent national stockpiles to their highest point in at least 80 years, according to the U.S. Energy Information Administration. Genscape acknowledged that the market moved after its report, but a spokeswoman declined to confirm exactly what the data said about the amount of oil stored in Cushing, Okla. Some traders believe sellers still have command of the market with many producers looking to hedge and speculators seeking to bet on falling prices. While some inexperienced traders are trying to pick a bottom, veterans have repeatedly jumped in to sell on any rally, said Mark Waggoner, president of brokerage Excel Futures. "Everyone I talked to who has been a trader for a long time wants to short this," he said. "It's obvious that we have tons and tons of oil." U.S. production has surged as technologies such as horizontal drilling and hydraulic fracturing have unlocked new oil and gas reserves. Last week's U.S. oil output still grew 15% on an annual basis, despite low oil prices, Capital Economics said in a note. The robust domestic supply hasn't stopped U.S. refiners from bringing in oil from abroad, however. The U.S. Energy Information Administration said Wednesday that imports rose by more than 200,000 barrels a day last week. Global oil is so inexpensive now that using railroads to ship U.S. crude from the Bakken Shale field in North Dakota and Montana to the East Coast doesn't make sense, analysts have said. Refiners are bringing in more international oil, and that trend is likely to continue as low front-month prices encourage traders to store more oil on ships, Macquarie Group Ltd. said in a note Thursday. "If the forward curve did not permit making money on a storage trade, that oil would be left in the ground," said Dominick Chirichella, an analyst at the Energy Management Institute. "The reason people are building inventories is because they're making money doing it." The U.S. is going to have to act like the swing producer and cut supply to balance the oil market, Harold Hamm, chief executive of oil producer Continental Resources Inc., . Some analysts have said U.S. production is likely to slow sooner than the market expects. Norbert Rucker, head of commodity research at Julius Baer, said a flattening of U.S. output should be expected soon because drilling in the U.S. shale-oil industry has been "dropping like a stone" since December, and there is usually a four-month lag between this affecting production growth. This would drive a rebound in prices but the "new normal" would be about $65 a barrel, a lower level than in recent years, Mr. Rucker said, citing advances in technology that have deflated production costs. "We also know now there is a lot more oil in the ground," he said. Georgi Kantchev and Erin Ailworth contributed to this article. Write to Timothy Puko at Credit: By Timothy Puko
Subject: Petroleum industry; Crude oil prices
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648819239
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648819239?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Boeing Expects Strong Jet Orders Despite Oil-Price Concerns
Author: Ostrower, Jon
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Jan 2015: B.6.
Abstract:
Boeing Co. reported a 19% increase in quarterly profit, and executives predicted that orders for its fuel-efficient jets will remain strong in 2015 despite concerns that falling oil prices could hamper demand.
Full text: Boeing Co. reported a 19% increase in quarterly profit, and executives predicted that orders for its fuel-efficient jets will remain strong in 2015 despite concerns that falling oil prices could hamper demand. The aerospace giant on Wednesday said it expects to deliver between 750 and 755 commercial jetliners this year, another industry record that could put it on pace to beat rival Airbus GroupNV for the fourth year. Boeing Chief Executive Jim McNerney said the company also expects its order book in 2015 to grow faster than it can build jets, increasing a backlog of jetliner orders that already stands at $440 billion based on list prices. Boeing also gave some disappointing news, saying that manufacturing costs for its advanced 787 Dreamliners continued to climb faster than forecast. It said it expects to post "core" earnings, excluding part of its pension expenses driven by market volatility, of $8.20 to $8.40 a share for 2015, compared with $8.60 reported for 2014. The company's 2015 revenue guidance of $94.5 billion to $96.5 billion topped analyst estimates of $93.25 billion, indicating expectations of strong growth from the $90.76 billion reported for 2014. Boeing projected a healthy increase in cash flow, a measure of financial performance closely watched. Boeing's commercial business had a record 2014, delivering 723 commercial jetliners last year and 195 in the fourth quarter, which helped it generate total revenue of $90.8 billion for the year and $24.5 billion in the quarter, up 3%. For the fourth quarter, Boeing reported profit of $1.47 billion compared with $1.23 billion a year earlier. But revenue at the defense, space and security division fell 14% to $7.59 billion. Separately, the U.S. Air Force said it had selected the Boeing 747-8 as the replacement for the Presidential Transport. The jet will serve as Air Force One starting no earlier than late-2022. Credit: By Jon Ostrower
Subject: Aircraft industry; Corporate profits; Financial performance; Factory orders
Company / organization: Name: Air Force-US; NAICS: 928110; Name: Boeing Co; NAICS: 336411, 336413, 336414
Product name: Boeing 747
Classification: 9180: International; 9190: United States; 8680: Transportation equipment industry; 5310: Production planning & control
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.6
Publication year: 2015
Publication date: Jan 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648845316
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648845316?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Outweighs the Fed as Stocks Tumble Again
Author: Scaggs, Alexandra; Zeng, Min; Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Jan 2015: C.1. [Duplicate]
Abstract:
Federal-fund futures, which are used to place bets on central-bank policy, showed Wednesday that investors and traders see a 12% likelihood of a rate increase at the June Fed policy meeting, according to data from CME Group Inc. It was 18% before the Fed's statement and 26% a month ago. Analysts say that low interest rates in the U.S. have helped support stock-market gains, since stocks look attractive compared with low-yielding government bonds, and low borrowing costs give a boost to corporate profits.
Full text: Corrections & Amplifications Boeing Co. executives on Wednesday predicted demand for the company's fuel-efficient jets would remain strong in 2015, despite analysts' concerns about falling oil prices. In Thursday's edition, a Money & Investing article about Wednesday's financial markets incorrectly reported that the company said diving oil prices could damage demand for fuel-efficient planes. (WSJ January 30, 2015) A sharp drop in oil prices overshadowed the Federal Reserve, with energy companies leading a selloff in U.S. stocks even as the central bank delivered what is usually good news for equities: It remains in no rush to raise interest rates. Treasurys rallied, pushing the yield on the 10-year note to its lowest level since May 2013, and the dollar rose against major currencies. Investors have been confronted with a volatile mix of economic and market moves: an improving U.S. economy and a rising dollar, ripples from the collapse in crude prices and weak economic growth and low inflation abroad. The Dow Jones Industrial Average dropped 195.84 points, or 1.1%, to 17191.37. The S&P 500 fell 27.39, or 1.3%, to 2002.16, and the Nasdaq Composite Index lost 43.50, or 0.9%, to 4637.99. The selloff continued in Asia early Thursday, with Japan's Nikkei down 0.4%, Hong Kong's Hang Seng down 0.7% and South Korea's Kospi down 0.3%. In the U.S. Wednesday, the Dow ended 4.8% below its most recent record set last month, and the S&P closed down 4.2% from its all-time high in late December. Energy shares in the S&P 500 tumbled 3.9%, as crude-oil futures fell 3.9% to a nearly six-year low of $44.45 a barrel. Fourth-quarter profits of energy companies are expected to shrink by 25% from the previous year, according to FactSet, as the oil-price dive weighs on their bottom lines. Behind the drop in oil prices was news that U.S. oil supplies rose by 8.9 million barrels in the week ended Jan. 23, the U.S. Energy Information Administration said Wednesday. It was at least an 80-year high in stockpiles, the EIA said. With the previous week's 10.1 million-barrel addition, it was the largest two-week rise in stockpiles in almost 30 years, according to CIBC World Markets. Oil prices now have fallen 59% since June. Oil companies have cut capital spending during the crash, but U.S. crude production keeps soaring. "There's nothing positive," said Andy Lebow, senior vice president for energy at Jefferies LLC. "You have a glass that's already full or about full, and the liquids just keep coming." In the bond market, the yield on the benchmark 10-year note fell to 1.723%, from 1.825% on Tuesday. The yield has tumbled from 2.173% at the end of 2014. Bond prices rise as yields fall. The 30-year yield settled at 2.294%, breaking the previous record closing low of 2.391% on Jan. 23. Robust demand for U.S. bonds underscored concerns about the uncertain global growth outlook and deflation risks in Europe. As a nod to global uncertainty, the Fed said Wednesday that it will remain patient in raising interest rates even as the U.S. economy was expanding at a solid pace. "The bond market welcomed the Fed's reassertion that they remain patient and a rate increase is still months away," said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. Federal-fund futures, which are used to place bets on central-bank policy, showed Wednesday that investors and traders see a 12% likelihood of a rate increase at the June Fed policy meeting, according to data from CME Group Inc. It was 18% before the Fed's statement and 26% a month ago. The Fed's message drove the euro 0.8% lower against the dollar in late-afternoon trading to $1.1287, pushing toward its lowest level in 11 years. The WSJ Dollar Index, which measures the dollar against a basket of widely traded currencies, rose 0.5% to 85.49. Stock investors largely took the Fed news in stride, traders said. Analysts say that low interest rates in the U.S. have helped support stock-market gains, since stocks look attractive compared with low-yielding government bonds, and low borrowing costs give a boost to corporate profits. "They delivered what the market expected," said Chris Gaffney, senior market strategist at EverBank Wealth Management. He thinks the Fed remains on track to raise rates at midyear and said that could mean more choppy trading for stocks. Technology stocks fared better than the broader market benchmarks, with the tech sector of the S&P 500 slipping 0.1%. Apple rallied $6.17, or 5.7%, to $115.31 after "staggering" demand for iPhones helped the company beat even the most bullish Wall Street forecasts. Apple shares are up 23% since its 7-for-1 stock split on June 9, 2014. Still, tech stocks were unable to recover ground lost during a 3.3% drop Tuesday, when a disappointing earnings report from Microsoft sent that stock down more than 9%. Microsoft shares fell an additional 3.5%, or 1.47, to 41.19 on Wednesday. After Apple's report, stocks in the S&P 500 are on pace for 1.3% fourth-quarter earnings growth, according to FactSet, slightly above analysts' projections of 1.1% at the start of reporting season. But without the tech giant's 38% profit growth, S&P 500 earnings are on pace for a yearly decline of 0.5%. Profits have been hurt by worse-than-expected bank results and the impact of falling oil prices on energy companies. Among Dow components, Boeing jumped 7.16, or 5.4%, to 139.64 after it posted better-than-expected quarterly results. But the company gave a weak outlook for profit in 2015, citing the possibility that diving oil prices could damage demand for fuel-efficient planes. AT&T slipped 13 cents, or 0.4%, to 32.68, after fourth-quarter earnings and sales narrowly beat Wall Street's expectations. --- James Ramage contributed to this article.
Credit: By Alexandra Scaggs, Min Zeng and Timothy Puko
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Company / organization: Name: Jefferies LLC; NAICS: 523110
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Jan 29, 2015
column: Wednesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648845679
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648845679?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gazprom Braces for Oil Price Impact; Russian Gas Giant Says Weak Oil Price Will Hit Revenue
Author: Marson, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
MOSCOW--Russian gas giant OAO Gazprom posted its weakest quarterly earnings since 2008, saying it could cut capital expenditure as plunging oil prices will further damage revenue.
Full text: MOSCOW--Russian gas giant OAO Gazprom posted its weakest quarterly earnings since 2008, saying it could cut capital expenditure as plunging oil prices will further damage revenue. Gazprom said export earnings from its lucrative European market will fall as contracts are linked to the oil price with a lag of around half a year. The world's largest gas producer on Thursday reported a 62% year-on-year drop in net profit for the third quarter of 2014. The oil price has more than halved so the latest results don't account for much of that decline. "Ongoing and any further decline may adversely affect our business, results of operations, cash flows, financial condition and potentially our capital program," the company said. The company said the weak results confirmed that it needed to sell more gas to Turkey and the Asia-Pacific region, a long-term goal that has gained some traction recently. Gazprom has faced regulatory problems in the European Union that in December caused it to to southeastern Europe through the Black Sea and make plans to expand capacity to Turkey instead. Still, despite plans to seal agreements to , Gazprom said that its revenue will remain dependent on Europe. "Diversified growth will be based on the strong foundation of its long-term core export sales to long-term European clients," the company said. Gazprom said volume delivered to Europe in the first nine months of 2014 slipped 3%, although ruble revenue was flat because the dollar had strengthened from a year earlier. The average price of $352.7 a thousand cubic meters for the first three quarters of 2014 will likely slip to a range of $200 to $250 this year, said Alfa Bank analyst Alexander Kornilov. Gazprom has in recent years amended contracts with European clients to include a larger link to prices at traded hubs, while maintaining some link to oil. On Wednesday, Gazprom said it had agreed to adjust its contract with Austria's OMV. "The document is aimed at adapting contractual terms to changing market conditions and therefore making Russian gas more competitive on the Austrian market," Gazprom said. Falling revenue could force Gazprom to cut its capital expenditure, long a sore point with investors who complain of bloated spending. In December Gazprom's board approved a smaller investment program for 2015 than in the previous year of 840 billion rubles ($12.4 billion), although it usually increases the figure during the year. For 2014, the original program was slated at 806 billion rubles but was raised to 1.026 trillion rubles in October. Gazprom, which reports its earnings weeks after other Russian listed companies, hasn't scheduled a conference call to discuss its results and instead will meet with investors in Singapore and Hong Kong next week. Stock in the company was down 0.6% Thursday afternoon, while the MICEX index was up 1.2%. Write to James Marson at Credit: By James Marson
Subject: Investments; Petroleum industry; Capital expenditures; Rubles
Location: Turkey
Company / organization: Name: OAO Gazprom; NAICS: 211111, 221210; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648846200
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648846200?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shell to Cut Spending Amid Lower Oil Prices; Dividends to Be Frozen, Shale Investments to Be Reduced
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
LONDON--Royal Dutch Shell PLC said Thursday it would curb its planned spending over the next three years by some $15 billion, freeze dividends at current levels and scale back shale investments to cope with weaker oil prices.
Full text: LONDON--Royal Dutch Shell PLC said Thursday it would curb its planned spending over the next three years by some $15 billion, freeze dividends at current levels and scale back shale investments to cope with weaker oil prices. Shell, the first of the four giant, integrated oil companies to announce quarterly results, posted an improved profit compared with the year-earlier quarter. But earnings were below some analysts' forecasts, driving shares down nearly 5% in London trading. "The macro environment has moved against us," Shell Chief Executive Ben van Beurden said during a Thursday news conference. He and Chief Financial Officer Simon Henry said Shell is cutting costs but continuing some big investments--including a potential $1 billion exploration project in Alaska's Arctic this year. Shell forecasts rebounding oil prices in coming years, and Mr. van Beurden said: "It's very important not to get into a slash-and-burn mentality." Quarterly profit on a current-cost-of-supplies basis--which factors out the impact of inventories and is similar to the net profit reported by U.S. oil companies--totaled $4.16 billion, nearly double the $2.15 billion of a year earlier. For the full year, the current-cost-of-supplies profit was $19.04 billion, up 14% from 2013. Oil prices have fallen more than 50% since the middle of last year, weighing on the entire industry. ConocoPhillips , and further struggles are likely--the average Brent crude price last quarter was about $77, Barclays said in a report this week, but prices have since dropped below $50. Shell by many measures didn't show a year-over-year decline last quarter, largely because issues including high spending and poor refining margins depressed its year-earlier earnings. That prompted the company to issue its . Mr. van Beurden said Shell would spend less on capital investment in 2015 than 2014, when it spent $37.3 billion. He said Shell has backed away from prospective projects to cut its planned capital investment through 2017 by $15 billion. Mr. Henry said that if it gets U.S. government approval, Shell plans to revive its Arctic-exploration push, which encountered weather-related delays and problems including the grounding of an in-transit drill ship at the start of 2013. Bernstein Research analyst Oswald Clint said Shell's profits disappointed investors partially because of losses in the North American shale business, which includes resources in the areas where the fracking boom has helped produce today's oil glut. Mr. van Beurden said Shell is re-evaluating shale properties world-wide and might divest itself of assets outside North America. Shell has shale properties in places such as Argentina, Turkey and China's Sichuan Basin. "The pace of development outside North America is slower everywhere than people thought it would be," Mr. Henry said in an interview on Thursday. Shell said it would pay a fourth-quarter dividend of 47 cents per ordinary share, a 4% rise on the same quarter last year but flat from the third quarter. Mr. Henry said that "over the past three months, it's become increasingly obvious" that Shell couldn't raise its dividend in the near term with oil prices falling. He said the board completed its decision this week. Investors in big oil companies have come to expect rising dividends. The companies have been reluctant to cut payouts, and in some recent quarters have borrowed money to fill the gap between cash flow and spending on dividends and capital investment. Now, "dividend growth is going to slow" across the sector, said Brian Youngberg, an analyst with Edward Jones. Shell said earnings in its exploration-and-production division were $2.65 billion for the quarter, up 43% from $1.85 billion a year earlier. But excluding one-time items such as write-downs and income from divestments, income in the division declined 30% from a year earlier, to $1.73 billion, in the quarter. For the full year, earnings in the division rose 25% from 2013, to $15.84 billion. Shell said its production for the quarter was 3.21 million barrels a day of oil and equivalent natural-gas volumes, downs 1% from a year earlier. Full-year production totaled 3.08 million barrels of oil and natural-gas equivalents a day, down 4% from 2013. Shell's processing, or downstream, business reported earnings of $1.54 billion for the quarter, more than triple the $472 million of a year earlier. For the full year, Shell's downstream earnings were $3.41 billion, down 12% from 2013. Revenue for the quarter was $92.37 billion, down 15% from $109.24 billion a year earlier. Shell's 2014 revenue fell 6.7% to $421.11 billion from $451.24 billion in 2013. Net income for the quarter fell 57% to $773 million from $1.78 billion. For the year, net income dropped 8% to $15.05 billion. Rory Gallivan contributed to this article. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Profits; Petroleum industry; Prices; Investments; Dividends
Location: Arctic region United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648846201
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648846201?accountid=7117
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Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Kill an $11 Billion Bayou Plan
Author: McGroarty, Patrick; Sider, Alison
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]29 Jan 2015: B.1.
Abstract:
[...]that situation improves, the economics of such a plant aren't good."
Full text: South African energy giant Sasol Ltd. said Wednesday it was shelving an $11 billion project on Louisiana's Gulf Coast, imperiling one of the largest foreign investments on U.S. soil because of the plunge in oil prices. Sasol has spent years planning to expand its chemical factory outside Lake Charles, La., into a sprawling facility to turn natural gas into industrial compounds and diesel fuel. In October, the company committed $8 billion for equipment that produces ethylene, which is used to make plastics and other products. That plant is still going forward, but Sasol said on Wednesday that a bigger project, to use natural gas rather than crude to make diesel, is on hold. Plummeting oil prices have forced it to push back its own 2016 deadline for deciding whether to build the unusual and expensive plant now that oil prices have fallen from over $100 a barrel to under $50. "This will allow us to evaluate the possibility of phasing in the project in the most pragmatic and effective manner," Sasol Chief Executive David Constable said in a statement. Sasol's shares on the Johannesburg stock exchange have shed about a third of their value since crude prices started a precipitous decline in June. Sasol's change of heart shows how crashing oil prices have buffeted a range of energy companies, which have postponed or abandoned projects worth billions of dollars. For example, Royal Dutch Shell PLC this month dropped plans for a multibillion-dollar petrochemical plant in natural-gas rich Qatar. Companies that find and drill for oil have also said they will slash capital spending and cut thousands of jobs. The Sasol natural-gas-to-diesel plant, which would be one of only a handful in the world, relied on oil prices remaining high compared to natural-gas prices, which have been very low in the U.S. since the shale boom began in 2008. When Sasol said it was thinking of building a gas-to-diesel plant in Louisiana in 2012, a barrel of oil was worth around 40 times as much as a million British thermal units of natural gas; today the ratio trades at about 17. Sasol said that ratio must be at least 16 for the project to make economic sense. "We have a surplus of gas and a surplus of crude -- both are down in the dumps," said Sandy Fielden, an analyst with energy consultancy RBN Energy LLC. "Until that situation improves, the economics of such a plant aren't good." As natural gas began flowing from shale fields to the Gulf Coast, the U.S. prepared for an investment boom that the American Chemistry Council, a trade body, estimated could be worth $137 billion from 2010 to 2023. The scale of Sasol's proposed plant made it a selling point for dozens of foreign-owned factories that Louisiana officials hoped to attract to supplement its existing refineries and chemical plants. The state offered Sasol incentives worth hundreds of millions of dollars, including funding a $20 million center aimed at training potential employees to staff the new plant. Louisiana officials say they hope Sasol will push forward with its gas-to-liquid fuel plant after oil prices recover. But already the expansion of Sasol's chemical complex is bringing jobs to the region, and billions of dollars in other investments are proceeding as planned, said Stephen Moret, the head of the Louisiana Department of Economic Development. "Whether or not Sasol completes the second phase of its planned project, Louisiana's manufacturing investment outlook continues to be outstanding," Mr. Moret said. Industry experts say that prospects for plants that convert natural gas into liquid fuels were precarious even when oil was hovering at around $100 per barrel, in part because the plants are so complex and expensive to construct. "My goodness, it was really looking shaky a long time ago," said Michelle Foss, chief energy economist the University of Texas's Center for Energy Economics. "Sooner or later you've got to pull the plug on something that's not going to work." It isn't yet clear how vulnerable plans for the region could be. Last month analysts at Goldman Sachs Group Inc. predicted that a handful of new ethylene projects might be delayed or cancelled amid high labor costs and falling margins, but said plants that have already broken ground would likely move forward. The Louisiana Chemical Association says that products like ethylene, ammonia and methanol, which is used to make formaldehyde, should hold up better than the diesel plant Sasol had planned. Sasol's model for the fuel-conversion plant is Secunda, a four-square-mile maze of pipelines and reactors on the South African plains. The site boasts the world's longest conveyor belt, a game park patrolled by jackals and zebras -- and 50 million tons of carbon dioxide emissions each year, among the highest in the world from one source. Sasol built the plant four decades ago because it feared apartheid-era sanctions might cut the country off from reliable fuel supplies. South Africa doesn't pump its own oil, but it sits on 95% of Africa's coal reserves. Sasol adopted a process refined in Nazi Germany to turn coal and gas into liquid fuel. The project Sasol designed for Louisiana would take advantage of a glut of natural gas. In addition to selling for more money within the U.S. than natural gas, diesel can also be exported for sale anywhere in the world. At the time, Sasol's main concern was that the price of natural gas would rise. It joined with Canadian oil producer Talisman Energy Inc. to lock in a secure supply of cheap natural gas. The company never expected that crude prices would be a problem, said an executive who is familiar with Sasol's work in the U.S. but isn't involved in deliberations over whether to see the investments through. "Such a steep oil price drop wasn't contemplated," the executive said. --- Tapan Panchal in London contributed to this article. Credit: By Patrick McGroarty and Alison Sider
Subject: Energy economics; Diesel fuels; Crude oil prices; Exploration & development expenses; Oil exploration
Location: United States--US Louisiana Lake Charles
Company / organization: Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Sasol Ltd; NAICS: 324110
Classification: 9180: International; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 29, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648865388
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Slide Shakes Up Southeast Asia's Markets; Thailand Overtakes Malaysia as Home to Region's Second Biggest Stock Market
Author: Jake Maxwell Watts
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
[...]a drop in oil price penalizes oil-producing countries and helps oil importing ones," said Olivier d'Assier, Asia managing director of Axioma, a risk consultant. "Since global growth is in doubt, investors are very sensitive to small changes in macroeconomic conditions so the comparison between the two countries is even more impactful," he said.
Full text: Sliding oil prices shook up Southeast Asia's markets as Thailand overtook Malaysia as home to the region's second-biggest stock exchange by market capitalization. of more than 50% in six months has hit exporters of the commodity, such as Malaysia, particularly hard, putting pressure on government finances and on companies that sell the fuel. At the same time, net importers like Thailand have made gains. "In short, a drop in oil price penalizes oil-producing countries and helps oil importing ones," said Olivier d'Assier, Asia managing director of Axioma, a risk consultant. "Since global growth is in doubt, investors are very sensitive to small changes in macroeconomic conditions so the comparison between the two countries is even more impactful," he said. The total market capitalization of all companies listed on the Stock Exchange of Thailand was around US$466.8 billion at market close on Wednesday, compared with US$466.7 billion for those listed on Bursa Malaysia, according to statistics from both exchanges. Singapore's market is still by far the largest in the region, with a total capitalization of about US$800 billion. The shifts in Thailand and Malaysia are among the ripple effects that have shaken up markets from Russia to the U.S. and prompted central banks such as . So far this year, Malaysia's main stock index has risen 2% compared with Thailand's 6.4% gain. Since oil began falling in mid-2014, oil producers such as SapuraKencana Petroleum Bhd. have been badly hit. Although SapuraKencana has regained some ground this year, it stock has dropped more than 30% in the past six months. A divergence in the countries' currencies also has helped Thailand's stock market overtake Malaysia's, in U.S. dollar terms. Against the U.S. dollar, Thailand's baht has strengthened 0.9% to 32.62 baht per dollar this year, while Malaysia's ringgit has weakened as much as 3.8%, trading late Thursday at 3.63 ringgit per dollar. "Thailand will be one of the clearest beneficiaries from low oil prices, it's one of the most oil-intensive emerging-market economies with oil consumption at about 12% of gross domestic product," said Alex Wolf, emerging-markets economist at Standard Life Investments. "The sharp drop in prices is allowing the government to cut fuel subsidies and free up additional fiscal space for infrastructure programs." In Malaysia, it is the opposite story. Last week, the government announced that included higher estimates for budget deficits this year and cuts to spending. Much of the pressure is a direct impact from falling oil prices: Petroleum receipts accounted for about 30% of government revenue in 2013. Petroliam Nasional Bhd., the country's state-owned oil and gas giant, contributes about $10 billion each year to the national budget and is Malaysia's sole Fortune 500 company. "All the factors point to a negative environment for growth, in our view," Credit Suisse said in a note. "Every 10% drop in oil prices cuts growth by around 0.2 percentage points by our estimates." Jason Ng contributed to this article. Credit: By Jake Maxwell Watts
Subject: Stock exchanges; Petroleum industry; Prices; American dollar
Location: United States--US Thailand Malaysia Southeast Asia
Company / organization: Name: Stock Exchange of Thailand; NAICS: 523210; Name: Standard Life Investments; NAICS: 525990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648880211
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648880211?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ConocoPhillips Records Loss, to Further Slash Capital Budget; Plunging Price of Crude Oil Causes Firm to Defer Onshore Drilling, Exploration Program
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
ConocoPhillips announced plans Thursday to pare its capital budget by another 15% as the exploration and production company swung to a loss in its fourth quarter amid tumbling crude oil prices.
Full text: ConocoPhillips announced plans Thursday to pare its capital budget by another 15% as the exploration and production company swung to a loss in its fourth quarter amid tumbling crude oil prices. ConocoPhillips in December was the , shaving 20% off its planned budget to deal with the plunging price of crude. The value of a barrel of oil has slid further since then as a flood of crude from U.S. shale continues to disrupt the global oil market. ConocoPhillips said Thursday that it will cut its capital budget to $11.5 billion from $13.5 billion as it defers onshore drilling and exploration programs. In the fourth quarter, ConocoPhillips's average realized price fell 19% to $52.88 per barrel. Meanwhile, its production level edged up to 1.567 million barrels of oil equivalent per day, excluding Libya. ConocoPhillips has been selling noncore assets to focus on those with higher returns, such as U.S. shale formations, which have fueled the drilling boom. Like many energy companies in the U.S., ConocoPhillips is focusing the largest part of its investment on oil rock formations in North Dakota and Texas. With oil prices in free fall, ConocoPhillips has said it would cut back on exploring for new sources of oil and gas, as well as on drilling in some shale formations in North America, including the Niobrara in Colorado. Overall, ConocoPhillips reported a loss of $39 million, or three cents a share, compared with a profit of $2.5 billion, or $2 a share, a year earlier. Excluding special items, earnings were 60 cents a share compared to $1.40 a share a year earlier. Analysts polled by Thomson Reuters had expected a per-share profit of 59 cents. In 2012, ConocoPhillips spun off its refining arm as Phillips 66 as part of a multiyear revamp aimed at improving the company's finances. Corrections & Amplifications An earlier version of this article misstated ConocoPhillips's production level in the fourth quarter. It was 1.567 million barrels of oil equivalent per day in the quarter, excluding Libya. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Crude oil prices; Oil reserves; Petroleum industry; Energy economics; Profits; Losses
Location: Libya United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648898585
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648898585?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Phillips 66 Profit, Revenue Top Expectations; Refinery Company Benefited From Recent Flood Of Cheap Crude Oil
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
Phillips 66 posted better-than-expected earnings and revenue in its fourth quarter as the refinery company benefits from the flood of cheap crude oil that has sent oil prices tumbling.
Full text: Phillips 66 posted better-than-expected earnings and revenue in its fourth quarter as the refinery company benefits from the flood of cheap crude oil that has sent oil prices tumbling. As oil prices have plummeted since last summer, U.S. refiners have been sucking up as much of the abnormally inexpensive crude as they can, turning it into gasoline, diesel and other fuels. Phillips 66's U.S. refinery margins have been buoyed by the cheap oil from places like North Dakota and Texas. In the latest quarter, Phillips, which was spun off from ConocoPhillips in 2012, said it processed a record 375,000 barrels of tight oil a day in the quarter. About 95% of the company's U.S. crude slate was advantaged in the quarter, unchanged from the third quarter's record rate. Meanwhile, total expenses fell 19.7% to $34.25 billion as the company's crude oil and products costs fell 23%. Overall, Phillips 66 reported a profit of $1.15 billion, or $2.05 a share, up from $826 million, or $1.37 a share, a year earlier. Excluding asset-sale gains, write-downs and other items, earnings rose to $1.63 from $1.34 a share. Revenue fell 18.8% to $35.61 billion. Analysts polled by Thomson Reuters expected a per-share profit of $1.37 and revenue of $35.2 billion. While Phillips 66 had earned most of its profits from refining, its chemical production business has recently taken on a larger role. The chemicals segment, which includes its interest in Chevron Phillips Chemical Company LLC, posted a 2.3% increase in earnings to $267 million in the latest quarter. Earnings for the refining segment, meanwhile, grew 23.7% to $517 million. Write to Chelsey Dulaney at Credit: By Chelsey Dulaney
Subject: Petroleum industry; Chemical industry; Corporate profits; Petroleum refineries
Location: Texas United States--US North Dakota
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648912150
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648912150?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
JetBlue's Profits Rise as Fuel Prices Drop; Budget Airline Joins Delta, American in Benefiting from Oil's Slump
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
Recently, rivals Delta Air Lines Inc. and American Airlines Group also recorded fourth-quarter profits boosted by low gas prices, while United Continental said its profit declined amid losses on fuel hedges and increased severance and benefit costs.
Full text: JetBlue Airways Corp. said Thursday that cheaper fuel and operating expenses--coupled with traffic increases--buoyed earnings in the fourth quarter. Shares rose about 1.4% in premarket trading. The sharp drop-off in oil prices has been generally favorable to airlines. In the December quarter, JetBlue had fuel hedges for about 26% of its fuel consumption. This resulted in an average fuel price of $2.70 a gallon, down 13% from the year before. The company recorded a $26 million loss in fuel hedges in the fourth quarter, and has hedged about 20% of its projected fuel requirements for the current quarter. "While fuel prices have fallen substantially, we are not changing our business plan and the actions we outlined at our investor day in November," said President Robin Hayes. He stressed the strength of the company's "differentiated model." Overall, JetBlue reported a profit of $88 million, or 26 cents a share, up from $47 million, or 14 cents a share, a year earlier. Revenue grew 5.9% to $1.45 billion. Analysts polled by Thomson Reuters had called for earnings of 24 cents a share on revenue of $1.45 billion. JetBlue's revenue per available seat mile, a key measure of performance for the airline industry, fell 0.1% from a year earlier. During the quarter, traffic increased 8.5% as capacity rose 7%. The portion of seats filled, or load factor, grew to 82.1% from 80.9%. JetBlue's operating expense per available seat mile fell 4.5%. For the current quarter, the company expects operating expense per seat mile to fall between 1.5% and 3.5%. Recently, rivals Delta Air Lines Inc. and American Airlines Group also recorded fourth-quarter profits boosted by low gas prices, while United Continental said its profit declined amid losses on fuel hedges and increased severance and benefit costs. Shares of JetBlue have been up about 86% in the past 12 months through Wednesday's close. Write to Angela Chen at Credit: By Angela Chen
Subject: Airlines; Financial performance; Corporate profits; Prices
People: Hayes, Robin
Company / organization: Name: JetBlue Airways Corp; NAICS: 481111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Delta Air Lines Inc; NAICS: 481111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648912177
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648912177?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
South Africa's Central Bank Keeps Rates on Hold; Falling Oil Prices are Driving Down Inflation
Author: McGroarty, Patrick
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
PRETORIA, South Africa--South Africa's central bank kept its key interest rate on hold Thursday after falling oil prices drove down inflation in the oil-importing nation.
Full text: PRETORIA, South Africa--South Africa's central bank kept its key interest rate on hold Thursday after falling oil prices drove down inflation in the oil-importing nation. Falling fuel prices have become the latest brake on the bank's pledge to gradually raise interest rates from four-decade lows. Governor Lesetja Kganyago on Thursday kept the main, or "repo", rate at 5.75%, where it has stood since July. Mr. Kganyago, who took over from former Governor Gill Marcus in November, has said he will continue her push for higher rates over time. But the lower import bill and inflation rate has reduced the urgency to do so soon. "The lower inflation path gives us some room to pause in this process, particularly against the backdrop of a continued weakness in the economy," Mr. Kganyago said. That means pressure on South Africa's rand currency, which has fallen 3% against the U.S. dollar in the past year, is less likely to ease. Higher rates can attract investors seeking strong returns to an economy. But keeping rates on hold could also help support South Africa's weak economy. The economy grew just 1.4% last year, the International Monetary Fund estimates, nowhere near the 7% annual expansion officials say they would need to dent a 25% official unemployment rate. Mr. Kganyago said the economy will grow 2.2% this year, less than the 2.5% expansion forecast in November. Recent electrical blackouts caused by a failing power grid and overstretched plants "more than offset the positive growth impact of lower oil prices," Mr. Kganyago said. Still, economists caution that with interest rates so low for so long already, there isn't much more of a jolt the bank can give to the economy. "It will take more than monetary policy to stimulate growth," said Thabi Leoka, an economist at Renaissance Capital. Instead, economists say, the government led by President Jacob Zuma needs to improve relations with mining and factory-workers unions that have staged monthslong strikes in recent years and improve the electricity supply. "Until such time we will be muddling along for quite some time," Ms. Leoka said. "We seem to be in perennial malaise." Credit: By Patrick McGroarty
Subject: Interest rates; Electricity distribution; Monetary policy
Location: South Africa
People: Zuma, Jacob Marcus, Gill
Company / organization: Name: International Monetary Fund--IMF; NAICS: 522298
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648930003
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648930003?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Loan Deadline for 1MDB Adds to Focus on Other Borrowings; Cost of Servicing Dollar Debts Increases as Oil, Ringgit Fall
Author: Hookway, James; Ng, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
People familiar with the matter say the negotiations with Malayan Banking Bhd. and RHB Bank Bhd. are complicated by the fact that the loan is guaranteed by the investment arm of businessman Ananda Krishnan, who they said is aiming to acquire a stake in unit of a power company he previously sold to 1MDB in 2012.
Full text: A looming deadline to make a $560 million loan repayment is piling pressure on a heavily indebted Malaysian state investment fund and focusing markets' attention on how it will handle its other, much larger liabilities. 1Malaysia Development Bhd., or 1MDB as it is known, has until midnight Saturday to make the payment to two local banks. People familiar with the matter say the negotiations with Malayan Banking Bhd. and RHB Bank Bhd. are complicated by the fact that the loan is guaranteed by the investment arm of businessman Ananda Krishnan, who they said is aiming to acquire a stake in unit of a power company he previously sold to 1MDB in 2012. 1MDB views Mr. Krishnan as a potential strategic partner, one person said. Mr. Krishnan couldn't immediately be reached for comment. The currency grace period may be extended beyond Jan. 31, a person familiar with the talks said. A Dec. 31 deadline for repayment had already been extended, The loan, denominated in ringgit, is a relatively small slice of 1MDB's total liabilities of 41.9 billion ringgit, or $11.5 billion, as of March 31, the latest date for which figures are available. But it is focusing attention on how 1MDB will handle its $7.4 billion in dollar-denominated debt while oil prices, and Malaysia's currency, remain weak. Malaysia is one of Asia's few oil exporters, and the cost of servicing 1MDB's dollar obligations has risen as Malaysia's ringgit slumps. The currency has lost around 12% in the past six months alone, adding to criticism of the government-linked fund. Opposition politician Tony Pua has described 1MDB's borrowing program as reckless. Financing costs were recorded at 2.40 billion ringgit, or $660 million at current rates, in 1MDB's most recent financial statements, dated March 31 last year. The precarious state of 1MDB points to how some emerging economies are being hit hard by the decline in oil prices. Russia, Venezuela, Brazil and Nigeria have all suffered declines in government revenue due to the roughly 50% drop in oil prices since the middle of last year. In Malaysia, the financial stress has exposed some weaknesses in 1MDB's aggressive strategy, and created a political storm. While officials at 1MDB say its assets, valued at 51.4 billion ringgit at the end of March, or $14.1 billion in today's dollars, outweigh its liabilities, the fund's financing crunch is proving to be an embarrassment for Malaysia's government, and for Prime Minister Najib Razak in particular. 1MDB was launched after he became premier in 2009 and he serves as head of its advisory board. The biggest problem is that many of 1MDB's investments aren't generating much in the way of cash. Its business generated net cash of 69 million ringgit in the year ended March 31. Many of its assets are in the form of land; one lot in downtown Kuala Lumpur is being developed as a new financial hub to be named after Mr. Najib's father, Abdul Razak Hussein, Malaysia's second prime minister. Another part of its holdings takes the form of a raft of power generators. 1MDB planned to spin off the power-generation plants in a $3 billion initial public offering early this year, but people familiar with the matter say the offering has been delayed. Mr. Najib appeared on Malaysian television Jan. 21 to say that the IPO is scheduled to be launched in the second quarter. With opposition politicians and Mr. Najib's rivals in the ruling United Malays National Organization both criticizing the way 1MDB is run, some analysts say the fund is operating on borrowed time. James Chin, the Kuala Lumpur-based director of the Asia Institute at Australia's Tasmania University, says that if 1MDB manages to spin off its assets, the government will ultimately choose to wind it down. "It has attracted such a stink it's going to rub off on whoever touches it," he said. Both government and 1MDB officials privately say its investments are solid and will ultimately come good. But the fund's immediate problems are a painful reality check for Malaysia. Opposition politicians argue oil money helped create a lax financial culture in which government-linked funds weren't subject to sufficient scrutiny. As oil falls, damaging the economy and adding to 1MDB's woes, concern about Malaysia's ability to make good on its obligations is growing Fitch Ratings recently cautioned that 1MDB's financial position has become "a source of uncertainty" because of the nature of its operations, leadership and explicit government guarantees of some of its borrowings. And the yield on Malaysian government 10-year bonds, at 3.86%, is significantly higher than the 2.75% yield on comparable Thai securities, despite Malaysia's better sovereign credit rating. Write to James Hookway at and Jason Ng at Credit: By James Hookway And Jason Ng
Subject: Equity stake; Prime ministers; Political parties; Petroleum industry
Location: Malaysia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648936170
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648936170?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Pennsylvania Governor Bars New Oil and Gas Drilling Leases in State Parks, Forests; Marcellus Shale Coalition Criticizes Moratorium, Says it Was Made Without Industry Input
Author: Maher, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
The natural gas industry sharply criticized Pennsylvania Gov. Tom Wolf's decision Thursday to reinstate a moratorium on future drilling in state parks and forests, which includes cases where private landowners own the mineral rights beneath parks.
Full text: The natural gas industry sharply criticized Pennsylvania Gov. Tom Wolf's decision Thursday to reinstate a moratorium on future drilling in state parks and forests, which includes cases where private landowners own the mineral rights beneath parks. Mr. Wolf, a Democrat who took office two weeks ago, signed an executive order barring new leases for oil and gas development on those public lands. Unlike with state forests, Pennsylvania doesn't own the mineral rights for the vast majority of land beneath state parks. At a public signing, Mr. Wolf noted that the parks in the state are visited by 38 million people annually, support more than 13,000 jobs and bring in $1.2 billion to the state's economy. "Natural gas development is vital to Pennsylvania's economy, but so is the economic and environmental viability of our parks and forests," Mr. Wolf said. Dave Spigelmyer, head of the Marcellus Shale Coalition, an industry trade group, said the decision was made without industry input and "flies in the face of common sense." Mr. Spigelmyer said natural gas development on the lands was safe, tightly regulated and caused no surface disturbances. He said drilling beneath the forests and state parks was also a large source of revenue for the state as it faces a $2 billion budget deficit. Allowing drillers to tap deep layers of the Marcellus Shale beneath the state's parks and forests has been contentious under prior governors since the method of natural-gas extraction known as hydraulic fracturing, or "fracking," took off in the state in about 2008. Under Gov. Ed Rendell, a Democrat in office from 2003 to 2011, the state Department of Conservation and Natural Resources leased more than 100,000 acres to natural gas drillers. Before he left office, Mr. Rendell issued an executive order putting a moratorium on future leases. Last year, Gov. Tom Corbett, a Republican, lifted the moratorium. The state department of natural resources has leased about 700,000 acres for gas development out of the 1.5 million acres that sit atop the Marcellus Shale, according to the agency. Natural gas and oil wells on state forests added $582 million to state budgets between 2008 and 2012, state officials said last year. The Sierra Club quickly praised Mr. Wolf for following through on a campaign promise to ban future drilling on parks. Michael Brune, executive director of the environmental group, said he looked forward to working with Mr. Wolf on future initiatives. "It's time to keep dirty fuels like fracked gas in the ground, where it belongs," Mr. Brune said. Mr. Wolf has repeatedly said he supports gas drilling in the state and has proposed instituting a 5% severance tax on drillers, which he said could help the state raise several hundred million dollars a year. Write to Kris Maher at Credit: By Kris Maher
Subject: Natural gas; Environmental protection; Moratoriums; State budgets; Parks & recreation areas; Natural resources; Hydraulic fracturing; Petroleum industry
Location: Pennsylvania
Company / organization: Name: Sierra Club; NAICS: 813312
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648956664
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shell's Defense Sounds Retreat for Big Oil; Early Results Don't Bode Well for Sector
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
[...]there are further risks to cash flow, including the lagged effects of oil-price moves on natural-gas contracts and a weaker tailwind from moves in working capital, which accounted for 60% of the fourth quarter's cash flow from operations as oil prices declined sharply.
Full text: Big Oil is supposed to provide a fortress amid turmoil in the energy market. But the first set of fourth-quarter results from the supermajors, Royal Dutch Shell's on Thursday, : The stock dropped almost 5%. Shell's published sensitivities imply that if Brent were to average $60 a barrel this year--actually higher than what futures currently imply--it would chop roughly $13 billion off operating cash flow, all else being equal. That still implies about $32 billion in 2015. Yet analysts still forecast closer to $37 billion, according to FactSet. And Shell's capital expenditure, even under new guidance, will likely still be north of $30 billion, so it will have to borrow to also cover its $12 billion annual dividend bill. This isn't an acute problem: Shell has a lot of borrowing capacity. But there are further risks to cash flow, including the lagged effects of oil-price moves on natural-gas contracts and a weaker tailwind from moves in working capital, which accounted for 60% of the fourth quarter's cash flow from operations as oil prices declined sharply. Shell's borrowing may rise faster than investors think. Tudor, Pickering, Holt forecasts cash flow of just $26 billion this year, implying Shell's net debt to capital would hit 20% by the end of the year, up from 12% at the end of 2014. That still makes Shell likely the most defensive Big Oil stock, at least in Europe. But this doesn't bode well for the group as a whole given what has happened in the stock market. Energy investors have, at least in relative terms, sought refuge in scale. Stocks including Shell, Exxon Mobil and even BP are down by just midteen percentages over the past six months rather than the 40%-plus drubbing seen in exploration-and-production stocks. Big Oil shares now have multiples of forward earnings in the high teens or low 20s as forecasts have fallen more rapidly than prices. To justify such premiums, they must demonstrate they can use their scale to their advantage. Yet the record is decidedly mixed here in terms of project delivery, weak return on invested capital and, as Shell's dismal reserve replacement numbers attest, exploration. At these multiples, the majors have won the defensive trade already. To maintain such faith, they must now show they can also thrive, whether it be trimming costs to boost return on capital or picking up assets elsewhere that have fallen to the trading room floor. Shell's results don't advance Big Oil's case. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Cash flow; Stock exchanges; Investments
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648956921
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648956921?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Petrobras' Internal Review of Corruption Could Last Two Years; Brazil State-Run Oil Firm Sees Internal Probe Costing About $57 Million This Year
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
RIO DE JANEIRO--An internal investigation into alleged corruption at Brazilian state-run oil firm Petroleo Brasileiro SA will cost the company approximately $57 million this year and could last up to two years, its chief executive said Thursday.
Full text: RIO DE JANEIRO--An internal investigation into alleged corruption at Brazilian state-run oil firm Petroleo Brasileiro SA will cost the company approximately $57 million this year and could last up to two years, its chief executive said Thursday. Chief executive Maria das Gracas Silva Foster said during a conference call with analysts that the costs are related to lawyer's fees and a new internal the company set up after the came to light last year. On Wednesday, Petrobras reported its earnings but didn't include a widely expected related to the corruption scandal, a move that disappointed investors and sent company shares down more than 12%. Federal prosecutors in Brazil allege that several former Petrobras executives and Brazilian construction multinationals colluded to inflate the costs of work performed for Petrobras, and that some of the resulting profits were funneled to Petrobras executives and high level politicians. More than thirty people have been arrested so far, and prosecutors allege that more than $800 million was diverted from Petrobras. Separately, Petrobras executives said Thursday that the company may delay dividend payments, and will consider selling some assets this year to help drive down the company's significant debt burden, but exploration and production assets were off limits. "We will hold on to the [exploration and production] assets, those are good assets," Ms. Foster said. When oil prices were higher, they might have considered other sales, Ms. Foster added, but now that the price of oil is below $50, exploration and production asset sales are "totally out of the question." Write to Will Connors at Credit: By Will Connors
Subject: Petroleum industry; Public prosecutors
Location: Brazil
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648960584
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648960584?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Airbus CEO Sees Low Oil Prices Benefiting Company; Oil Prices Could Create Difficulties for Helicopter Unit, Though
Author: Wall, Robert
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
PARIS--Airbus Group NV chief executive Tom Enders said low crude prices should be good for commercial jetliner maker even if it is creating difficulties for the helicopter unit as demand from the lucrative oil-and-gas sector suffers.
Full text: PARIS--Airbus Group NV chief executive Tom Enders said low crude prices should be good for commercial jetliner maker even if it is creating difficulties for the helicopter unit as demand from the lucrative oil-and-gas sector suffers. "The business environment looks good in 2015," Mr. Enders told reporters. He said should be "a beneficial development." Some industry observers have worried it will soften demand for new jetliners from Airbus and rival Boeing Co. The drop in fuel costs will aid airlines, however, and enable them to buy planes, Mr. Enders said. He said deals this year would include orders for the A380 superjumbo, which has struggled to secure new buyers. "I am still of the opinion that the A380 has a great future," he said. Mr. Enders is less sanguine about the effect on the company's helicopter unit after another year in which helicopter deliveries outpaced new deals, shrinking the unit's backlog, and he said securing new commitments would be a personal priority this year. "The entire group will work very hard to replenish the order book," he said, adding that cash flow at the unit has been good. Earlier Thursday, Airbus said is stepping down. Write to Robert Wall at Credit: By Robert Wall
Subject: Helicopters; Aircraft industry
Company / organization: Name: Airbus Group NV; NAICS: 336411, 336412, 336413; Name: Boeing Co; NAICS: 336411, 336413, 336414
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648960595
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648960595?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Companies, Rulers Caught in Wide Ripples From the Drop of Oil; TAP Airline May Not Want You to Pay for Your Ticket in Angolan Kwanzas, For Instance
Author: Kowsmann, Patricia; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract: None available.
Full text: Airlines love plummeting oil prices, right? Not always. The fall in the price of the black stuff may mean cheaper fuel in the long run, but it's also resulted in a headache for Portuguese carrier TAP SGPS SA. TAP flies frequently in Angola, but the Angolan kwanza has slumped along with oil prices. So TAP doesn't want to be stranded with a load of kwanzas. So this week it announced on its website that fliers temporarily won't be able to buy tickets in Angola--unless the trip starts there. One dollar now buys almost 105 kwanzas, an increase of more than 7% over the last six months, brought on by a nearly 55% fall in the price of both Brent crude and WTI light sweet crude over the same period. Earlier this week, the Angolan cabinet presented a revised 2015 budget to Parliament in which it trimmed its assumed oil price to $40 a barrel, from the $81 previously projected. Brent is currently trading just under $49 per barrel and WTI is below $44, both at lows of more than 5½ years. As well as being Africa's second-largest oil exporter, the former Portuguese colony is also a major destination for TAP. Exchanging kwanzas into U.S. dollars and moving the money back to Lisbon, however, is becoming increasingly difficult for the company because of Angolan foreign-exchange restrictions. Elsewhere, TAP has the equivalent of [euro]100 million stuck in Venezuela, where a similar ban has been implemented since last year, a person familiar with the situation. State-owned TAP is back on the sale block after a failed attempt in 2012. The government has said it received expressions of interest from a handful of companies, including Brazil's Azul. Other Portuguese companies are likely having the same troubles in Angola, where they have expanded heavily over the years. Angola is Portugal's largest exporting market outside the European Union. Beyond corporates, the commodity crisis is also posing a challenge to a cluster of African rulers, like Angola's José Eduardo dos Santos, who have long used crude revenue to consolidate their power, reward political allies and subsidize basic goods and services. Earnings from the 1.7 million barrels produced daily by Angola have given it a comfortable trade surplus and 5.3% annual growth each year since the global financial crisis in 2009. Nonetheless, the oil-related challenges could burden that trajectory. Earlier this month, economists at Barclays listed Angola as one of the nations most likely to have its credit rating chopped this year, making it harder and more expensive for the government to borrow money on the public debt market. The International Monetary Fund last week lowered its 2015 economic-growth outlook for sub-Saharan Africa to 4.9% from a previous estimate of 5.8%. Write to Patricia Kowsmann at and Josie Cox at Credit: By Patricia Kowsmann And Josie Cox
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648960602
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648960602?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Saudi King Shuffles Cabinet, But Leaves Oil Minister; King Salman bin Abdulaziz Orders Major Changes to His Government But Keeps in Place the Oil Minister
Author: Ahmed Al Omran; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
[...]King Salman did opt for some continuity by keeping Oil Minister Ali al-Naimi, who was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries to keep its oil production target steady, sending global oil prices into a tailspin.
Full text: JEDDAH--Saudi Arabia's King Salman bin Abdulaziz ordered major changes to his government including a cabinet shuffle, but kept in place the veteran ministers of oil, finance and foreign affairs. Thursday's changes signal the new leader's intention to inject some fresh blood in his government as it faces challenges ranging from falling oil prices to security threats by Islamist militants to its north and instability in Yemen to its south. But King Salman did opt for some continuity by keeping Oil Minister Ali al-Naimi, who was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries to keep its oil production target steady, sending global oil prices into a tailspin. In a bid to streamline decision-making and make the government more efficient, the king abolished 12 public bodies responsible for drawing up policies in fields ranging from energy to education, according to a series of royal decrees read out by news anchors on state television. "You deserve more and no matter what I do won't do you justice," said King Salman, who took power after his half-brother Abdullah's death this month, in a Twitter message to Saudis. "I ask God to help me and you to serve religion and the nation." To eliminate redundancies, the king said he abolished an old economic council, replacing it with another to be headed by his son Prince Mohammed bin Salman, who also holds the positions of defense minister and chief of the royal court. In a step that appears aimed to unify decision making on security matters under one body, the king also abolished a security council led by Prince Bandar bin Sultan, a former ambassador to the U.S., who was relieved of his duty. The king established a new security body to be led by Prince Mohammed bin Nayef, the deputy crown prince and interior minister, who is admired by American officials for his antiterrorism efforts for the past 15 years. The king also merged two education ministries and appointed new ministers of justice, Islamic affairs, agriculture, municipal affairs, health, information and a new head of the intelligence services and the religious police. The king appointed Mohammed Al Jadaan as new chief of the Capital Market Authority, which regulates the financial markets in Saudi Arabia. It remains unclear if the change will have any effect on the country's plan to open its stock market to foreign investors in the first half of 2015. He kept in place the late king's son Miteb as Minister of the National Guard, but sacked two of Abdullah sons, who held roles as governors of major provinces. The king ordered paying two months of bonus salary to all government employees and pension to retired government workers, and increased spending on social welfare and development, including $5.3 billion to deliver electricity and water to new housing projects. Mr. Naimi, who has been the kingdom's oil minister since 1995, has in recent years championed Saudi Arabia's role as keeping oil markets stable and well supplied. In addition to trimming output at times of weak prices, the world's top oil exporter has also boosted output when supplies were tight, including just before the U.S.-led invasion of Iraq in 2003 and amid Western sanctions targeting Iranian oil exports. King Salman also named as deputy oil minister his son Prince Abdulaziz, who was previously the assistant oil minister and a regular participant in OPEC meetings. Saudi industry officials have said that King Salman is likely to retain Mr. Naimi but if he opts for a successor the best-suited candidates are likely to be either Prince Abdulaziz or the chief executive of the state-owned giant Saudi Aramco Khalid Al-Falih. Traditionally incoming kings have opted to appoint new ministers to lead key ministries like oil, providing in this case a convenient opportunity for Mr. Naimi, to retire--something people familiar with his thinking have said he has considered for years. In an effort to enhance the performance and efficiency of the government, King Salman also abolished the Supreme Council for Petroleum and Minerals, which has been kingdom's top decision-making body on oil and gas since 2000. Its responsibilities will fall under the new economic ministry and include Mr. Nami. Credit: By Ahmed Al Omran And Summer Said
Subject: Petroleum industry; Supply & demand; Decision making; Clergy; Petroleum production
Location: Yemen Saudi Arabia
People: Mohammed bin Nayef, Prince of Saudi Arabia Naimi, Ali I
Company / organization: Name: National Guard; NAICS: 928110
Publication title: Wall Street Journal (Online) New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648960744
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648960744?accountid=7117
Copyright: (c) 2015 Dow J ones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq's Parliament Approves 2015 Budget Following Oil Price Debate; Budget is Based on $56 a Barrel, Lowered From $60 a Barrel in Earlier Drafts
Author: Adnan, Ghassan; Malas, Nour
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
Iraq didn't pass a 2014 budget. Since December, parliament meetings to approve the 2015 draft budget have been bogged down by debate, mostly over what oil price to base the budget on and how to account for exports from the semiautonomous Kurdistan region.
Full text: BAGHDAD--Iraq's parliament has approved the country's 2015 budget following weeks of debate on lower oil prices and how to write in a landmark oil export deal reached last year between Baghdad and the northern Kurdistan region. The budget is based on $56 a barrel of crude, lowered from $60 a barrel in earlier drafts. Despite lower projected revenues from oil sales, the budget projects a deficit of $20 billion compared with $40 billion in an earlier version. The vote Thursday marked a step forward, as rival blocs in parliament agreed to push through a budget that is badly needed for fiscal planning as Iraq's finances reel from a plunge in global oil prices and a costly military campaign against Islamic extremists. Iraq didn't pass a 2014 budget. Since December, parliament meetings to approve the 2015 draft budget have been bogged down by debate, mostly over what oil price to base the budget on and how to account for exports from the semiautonomous Kurdistan region. Prime Minister Haider al-Abadi has said this year's budget would be an austerity budget, focusing on slashing the bloated public sector and freeing up funds for military spending as Iraqi forces battle Islamic State. Parliament's economy and investment committee had initially described the draft as "a budget of punishment for the Iraqi people." Some committee members criticized the draft--which outlines revenue generation under an oil export deal struck in December between Baghdad and the Kurdistan Regional Government--unfairly benefits the Kurdistan region, "while the rest of Iraq suffers austerity." Sunnis in parliament, too, had threatened to boycott the vote because the draft budget didn't include funding provisions for a national guard--a security force meant to empower Sunnis within the Shiite-led government as it fights Islamic State. Opening the voting session, parliament speaker Salim al-Jabouri said all disagreements over the budget had been resolved. "Iraqis have been waiting for this for a long time," Mr. Jabouri said. Ali A. Nabhan contributed to this article. Write to Nour Malas at Credit: By Ghassan Adnan and Nour Malas
Subject: Petroleum industry; Budgets; Oil reserves
Location: Kurdistan Iraq
People: al-Abadi, Haider
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648960751
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648960751?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheap Oil Sours Big-Budget Energy Projects; Chevron Nears Goal of Producing More as Market Turn Pushes Payoff Further Out
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
The company aims to pump the equivalent of 3.1 million barrels a day by 2017, a 20% increase over current levels. [...]recent months, high oil prices helped Chevron finance $156 billion of spending since 2010 on developing new sources of oil and gas. Even with those prices, the heavy spending has taken a toll on Chevron's balance sheet. Since 2012, the company has shelled out $23 billion more on producing energy, paying dividends and buying back shares than it has brought in from operations and selling assets.
Full text: As Chevron Corp. closes in on its long-elusive goal of pumping more oil, another target is slipping away: Boosting profits. Chevron's drive to increase its oil-and-gas production, the most ambitious among the world's giant energy companies, is beginning to show results, with two major deep-water projects in the Gulf of Mexico starting up late last year. But the newest barrels are flowing just as oil prices have crashed more than 60% since last summer; U.S. crude prices dipped below $44 a barrel on Thursday, the lowest in almost six years, and closed at $44.53. Rising production isn't likely to make up for the bite of sharply lower prices when Chevron reports quarterly profits. On Friday, analysts expect it to report fourth quarter per share profit of $1.63, down nearly 37% from a year ago, according to Thomson Reuters. Analysts' consensus for 2015 full-year profit is about half what it was last year. John Watson, Chevron's chief executive, said in a statement to The Wall Street Journal that the San Ramon, Calif., company "has a long history of managing volatility in commodity prices. This cycle is no exception." Chevron "will continue to be focused on aligning costs and capital spending to market conditions," he said. "As current projects come online, they will generate significant revenue for decades." Buoyed in recent years by high prices, Chevron and other oil titans have spent at historic levels to drill in miles-deep waters, build plants to freeze gas into a shippable form and melt oil out of tar-like sands. Meanwhile, smaller companies have moved faster, poking enough holes into U.S. shale rock-formations to deliver about 3.5 million barrels of oil a day above 2010 levels. That increase, almost as much crude as Chevron and Exxon Mobil Corp. produce combined, has added fresh capacity to the global oil market and contributed to the nose-dive in prices. Now that Chevron and its rivals are finally turning on the taps of big-ticket, years-long projects, they appear to have missed the window of the highest sustained oil prices in modern history--and the potential for the greatest payoff. "Short-term, low-cost shale is a brutal competitor" to projects that take years to complete, says Paul Sankey, senior analyst for Wolfe Research LLC, a boutique research firm. Profits of the world's biggest energy companies, including Chevron, Royal Dutch Shell PLC and Exxon Mobil are better insulated than most oil producers because they also make money from refining the fuel into gasoline and diesel. The lower cost crude has helped their refinery businesses improve profit margins. Valero Energy Corp., the largest U.S. refiner, reported a $1.2 billion profit on Thursday, lower than a year ago but still beating analysts' estimates. Chevron's competitors are moving aggressively to curb spending as cheap crude slices into their cash flow. Shell said on Thursday it would spend $15 billion less than planned over the next three years, reporting a $4.2 billion profit for the last three months of 2014 that missed analysts' expectations. Occidental Petroleum Corp. slashed its capital budget by a third, to $5.8 billion, while swinging to a loss of $3.4 billion last quarter. ConocoPhillips lopped 15% off its 2015 spending plans, after a 20% reduction in December, as it disclosed a $39 million loss in the fourth quarter on Thursday. Chevron hasn't yet laid out its capital plans for this year, but many analysts expect it will disclose a reduction when the figures are released. The slump in crude prices is a bitter pill for Chevron. The company aims to pump the equivalent of 3.1 million barrels a day by 2017, a 20% increase over current levels. Until recent months, high oil prices helped Chevron finance $156 billion of spending since 2010 on developing new sources of oil and gas. Even with those prices, the heavy spending has taken a toll on Chevron's balance sheet. Since 2012, the company has shelled out $23 billion more on producing energy, paying dividends and buying back shares than it has brought in from operations and selling assets. Mr. Watson acknowledged last March that many of the company's big-ticket projects depend on expensive crude, which he then suggested would continue. "The $100 barrel is the new $20 barrel," Mr. Watson said at a speech last March during the IHS CERAWeek conference in Houston. Days later, he laid out plans to spend $40 billion a year from 2015 to 2017. Those plans, he told Wall Street analysts, were premised on rising cash flow. Chevron's costliest investments, like a $54-billion project in Australia to liquefy and export natural gas, could yet pay off if prices rebound soon. Such mega-projects have the advantage of delivering steady streams of petroleum for years. They require much less capital once completed. And as the industry collectively pulls back from spending amid lower prices, the costs of hiring offshore welders, leasing rigs and fracking shale wells are beginning to fall. But while a shale well may not be as profitable as a deep-water well that yields many more barrels, it has the advantage of producing oil in months rather than years. When Chevron committed $7.5 billion in 2010 to develop half-a-billion barrels in the Gulf of Mexico, oil sold for about $80 a barrel in the U.S. After hovering around $100 a barrel for the last three years, the price sunk to $67 by the time Chevron hooked up its wells to a floating storage unit in December, and has fallen more than $20 since. Chevron and its peers have "structured themselves for a $90-plus world, and they're in a $50 to $60 [a barrel] world," says Anish Kapadia, a London-based managing director for energy investment bank Tudor, Pickering, Holt & Co. "New big projects will get pushed back until you get higher pricing." Write to Daniel Gilbert at Credit: By Daniel Gilbert
Subject: Petroleum industry; Corporate profits; Capital expenditures; Profit margins; Crude oil prices; Competition
Location: United States--US Gulf of Mexico
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Wolfe Research LLC; NAICS: 541720; Name: Valero Energy Corp; NAICS: 486210, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648983196
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648983196?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Oil Sands to Further Slash Dividend, Speed Up Cost Cuts; Plunge in OIl Prices Roils Oil Sands Producers' 2015 Spending Plans
Author: King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]29 Jan 2015: n/a.
Abstract:
Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.
Full text: Canadian Oil Sands Ltd. said Thursday it would further slash its dividend and speed up cost-cutting efforts in response to the sharp drop in oil prices. The Calgary-based company, largest owner of the Syncrude oil sands project in Alberta, had warned last month it would reduce its quarterly payout to 20 Canadian cents a share from 35 Canadian cents in the third quarter. It said Thursday that an even deeper cut, to 5 Canadian cents, is required in the current environment. The more than 50% plunge in oil prices has roiled Canadian oil sands producers' spending plans for 2015 and led many of them to reassess longer-term projects which hadn't yet received the green light. They haven't halted projects currently under way, or slashed production plans for this year. Canadian Oil Sands said potential cost reductions at Syncrude in 2015, net to Canadian Oil Sands, will be in the range of 10% to 15%, or between 260 million Canadian dollars ($206 million) to C$400 million. The cuts won't alter the company's production guidance of 35 million to 40 million barrels of oil this year. Syncrude's total output guidance remains 95 million to 110 million barrels. "We entered the current period of low crude oil prices with a strong balance sheet, and by reducing our dividend and cutting costs at Syncrude, COS is well positioned to manage its business through a prolonged period of low oil prices and retain its long-term value," said Chief Executive Ryan Kubik. "Syncrude has the flexibility to respond to market conditions without affecting projections for 2015 production." In the fourth quarter, the company earned C$25 million, or 5 Canadian cents a share, down from C$192 million, or 40 Canadian cents, a year earlier. Cash flow fell to C$207 million from C$391 million. Both drops reflected a lower realized oil price and higher operating costs. Canadian Oil Sands owns a 37% stake in Syncrude, which is one of the largest and oldest oil-sands producers. It has struggled to cope with a series of unplanned outages at Syncrude's surface-mining operations. Six other companies own the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company. Write to Carolyn King at Credit: By Carolyn King
Subject: Oil sands; Petroleum industry; Cost reduction; Crude oil prices
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 29, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648986836
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648986836?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Oil Sands to Further Slash Dividend and Spending; Company Pressured by Plunge in Oil Prices and Rising Debt Load
Author: Dawson, Chester; King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
[...]Canadian Oil Sands expects cash flow from operations this year will come to C$368 million, or C$0.76 a share, which is just half the C$730 million, or C$1.51 a share, it had anticipated as recently as early December and a fraction of the C$1.1 billion, or C$2.28 a share, it reported for 2014.
Full text: CALGARY, Alberta--Canadian Oil Sands Ltd. said Thursday it would further slash its dividend and capital spending budget in response to the sharp drop in oil prices and a rising debt load. The Calgary-based company, largest owner of the Syncrude oil sands project in Alberta, had warned last month it would reduce its quarterly payout to 20 Canadian cents ($0.16) a share from 35 Canadian cents in the third quarter. It said Thursday that an even deeper cut, to 5 Canadian cents, is required in the current environment. That widely expected move was designed in part to keep Canadian Oil Sands' debt level in check, something its management has said is a high priority. The company's net debt stood at 1.9 billion Canadian dollars ($1.51 billion) as of Dec. 31, up from the C$1.7 billion it reported on Sept. 30 and just below a self-imposed cap of C$2.0 billion. The more than 50% plunge in oil prices has roiled Canadian oil sands producers' spending plans for 2015 and led many of them to reassess longer-term projects which hadn't yet received the green light. They haven't halted projects currently under way, or slashed production plans for this year. Canadian Oil Sands said potential cost reductions at Syncrude in 2015, net to Canadian Oil Sands, will be in the range of 10% to 15%, or between C$260 million to C$400 million. Up to C$110 million of that will come from reduced capital spending, which the company now pegs at C$541 million. That is down from its previous plan to spend C$564 this year and the C$930 million it spent in 2014. The cuts won't alter the company's production guidance of 35 million to 40 million barrels of oil this year. Syncrude's total output guidance remains 95 million to 110 million barrels. But it now expects to earn less from each barrel, cutting its 2015 estimate for average West Texas Intermediate prices to $55 a barrel from an earlier projection of $75 a barrel and an average price last year of $93. As a result, Canadian Oil Sands expects cash flow from operations this year will come to C$368 million, or C$0.76 a share, which is just half the C$730 million, or C$1.51 a share, it had anticipated as recently as early December and a fraction of the C$1.1 billion, or C$2.28 a share, it reported for 2014. "We entered the current period of low crude oil prices with a strong balance sheet, and by reducing our dividend and cutting costs at Syncrude, COS is well positioned to manage its business through a prolonged period of low oil prices and retain its long-term value," Chief Executive Ryan Kubik said. "Syncrude has the flexibility to respond to market conditions without affecting projections for 2015 production." In the fourth quarter, the company earned C$25 million, or 5 Canadian cents a share, down from C$192 million, or 40 Canadian cents, a year earlier. Cash flow fell to C$207 million from C$391 million. Both drops reflected a lower realized oil price and higher operating costs. The Toronto Stock Exchange halted trading in shares of Canadian Oil Sands on Thursday afternoon before it released its earnings and announced the dividend and spending cuts. It last traded down 7.13% on the day at C$6.51. Canadian Oil Sands holds a 37% stake in Syncrude, with six other companies owning the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company. Syncrude has struggled to cope with a series of unplanned outages at its surface-mining operations, the largest oil-sands project in the world. Its average cost per barrel is about C$47.75, which is higher than every other major oil sands mine in Canada, according to TD Securities Inc. Write to Chester Dawson at and Carolyn King at Credit: By Chester Dawson And Carolyn King
Subject: Oil sands; Petroleum industry; Cash flow; Debt restructuring; Capital expenditures; Crude oil prices
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648992821
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648992821?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Prices Spread Pain Far Across The Oil Patch; Companies Plan to Slash Spending Along With Thousands of Jobs
Author: Ailworth, Erin; Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Many big energy companies have said they plan to slash billions of dollars in spending along with thousands of jobs; energy giant ConocoPhillips told employees Thursday to expect a salary freeze and layoffs. Ed Hazard, who heads a group for royalty owners in California, says a deal to drill a dozen wells on his family's property in Santa Barbara County now appears to be in doubt, a victim of low oil prices.
Full text: DALLAS--Rumor became reality here last week when dozens of workers lost their jobs at Laredo Petroleum Inc. The Oklahoma-based energy outfit said it closed its regional office to cope with plunging oil prices. The layoffs were "kind of like a death in the family," says Robert Silver, age 62, a geophysicist who had helped Laredo decide where to drill in the Permian Basin in West Texas. Trouble has been looming over the oil patch since crude prices began falling last summer, from over $100 a barrel to under $50 today. But only now are the long-feared effects of a bust starting to ripple through the complex energy ecosystem, affecting Houston executives, California landowners and oil old-timers in Oklahoma. Many big energy companies have said they plan to slash billions of dollars in spending along with thousands of jobs; energy giant ConocoPhillips told employees Thursday to expect a salary freeze and layoffs. Indicators like drilling permits in Texas have fallen sharply. Cutbacks aren't yet reflected in broad data on employment, home sales or tax collections. For example, the federal Bureau of Labor Statistics says that employment in oil and gas extraction rose in December to 216,100, the highest level since 1986. But fallout is beginning to affect people, starting with the legions working as suppliers to the energy industry. Eric Herschap is chief operations officer at Exclusive Energy Services LLC, a private company in Orange Grove, Texas, that offers services, including equipment rentals, to exploration companies. His customers are demanding price cuts of 15% to 25%, and Exclusive offers additional discounts beyond that, he says. So the company laid off 10 of its 45 employees and is cutting bonuses for those who remain. Mr. Herschap says his brightest engineers are now fielding phone calls from customers with technical questions. Nonenergy companies that rely on roughnecks are also pulling in their horns. Danny and Kim Gallo moved from Connecticut to tiny Runge, Texas, last February to open Boom Town Food Trucks to serve the Eagle Ford Shale. But the company operates just one truck and a kitchen in a trailer at the moment, and the Gallos, who have backgrounds in the hospitality industry, have decided against adding another truck for a while. "You're sitting there and saying, 'Wow, did we miss the party?'" says Mr. Gallo, whose most expensive item is an $11 double chorizo burger. Fancier establishments that cater to energy executives are taking action, too. Steve Zimmerman has owned a restaurant and boutique hotel in Houston for decades and remembers the oil crash of 1986. Back then, he began offering an "Oil Barrel Special," a multicourse meal with a price pegged to the (falling) cost of crude. This month, he resurrected the special in an effort to attract customers while showing that he feels their pain. Menus like escargot, salmon and bread pudding are on offer for about $50, depending on the closing price of West Texas Intermediate. As oil prices started to fall, Houstonians were hoping for a hiccup, he says. Now, "they're getting more cautious." That's in part because the shares of energy companies have tanked along with crude. Kolja Rockov, chief financial officer of Linn Energy LLC, sold nearly half of his stake in the oil-and-gas partnership in a margin call, the company disclosed. Mr. Rockov had pledged units of the company as collateral for a loan, and was forced to sell 230,900 of them for an average of $9.46, or almost $2.2 million. The company's stock has fallen about 72% in the past year. Mr. Rockov didn't respond to requests for comment. Meanwhile, some oil field workers in North Dakota are reporting shorter shifts and less overtime. Calls for help have been coming in faster at the Rig Wives Foundation of Odessa, Mo., which provides assistance to oil-field families, says Tanya Beeks, who started the small group in 2010. "It's mostly electric bills, gas bills, phone bills," Mrs. Beeks says of the aid she doles out with the help of donations and the proceeds from merchandise she sells online. Those outside of the energy industry are also affected. Landowners are starting to get lower royalty payments for the oil pumped on their properties, and new leasing deals are dwindling. Ed Hazard, who heads a group for royalty owners in California, says a deal to drill a dozen wells on his family's property in Santa Barbara County now appears to be in doubt, a victim of low oil prices. "This is going to hurt, no question," he says. For some of the smallest outfits in the energy-production business, it isn't so much what they are doing in response to low oil prices as what they aren't doing: fixing equipment when it breaks. That is the approach adopted by Tom Dunlap, who pumps oil from some of the same wells his grandfather drilled nearly 100 years ago near Ardmore, Okla. Such stripper-well operations don't produce a lot of oil, but nationally they pump about 700,000 barrels a day, according to their trade association. When oil prices were high, Mr. Dunlap says he would gladly spend $1,000 or more to repair his old pump jacks and tanks. No more, the 73-year-old president of Tripledee Drilling Co. says. Laredo, the company that closed its Dallas office, said it was laying off 75 employees, about 20% of the workforce at the company, which has a stock-market value of about $1.3 billion. "While it is a necessary step due to the substantial drop in commodity prices and the resultant reduction in the company's drilling activities, we do not take such actions lightly," it said. Mr. Silver, the geophysicist, says that after living through oil busts, he has saved for the bad times and could retire--though he doesn't want to. "Probably the scariest thing out there is all of a sudden being without health insurance," Mr. Silver says. "Just being thrown in the marketplace, that's tough." Write to Erin Ailworth at and Dan Molinski at Credit: By Erin Ailworth and Dan Molinski
Subject: Energy industry; Petroleum industry; Crude oil prices; Price cuts
Location: Permian Basin California
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Bureau of Labor Statistics; NAICS: 921110, 923110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1648992874
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1648992874?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Taiwan's Fourth-Quarter Growth Slows; Falling Oil Prices Hit Exports of Petrochemical Products, Electronics Demand Stays Strong
Author: Liu, Fanny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Economists say Taiwan's monetary policy will likely remain accommodative to lift growth, and that the central bank likely will allow the local currency to depreciate more against the U.S. dollar to boost the competitiveness of its exports.
Full text: TAIPEI--Taiwan's economy expanded more slowly in the fourth quarter, as falling oil prices hurt petrochemical exports, though demand for electronics remained strong. Taiwan's gross domestic product rose 3.17% from a year earlier in the final quarter of 2014, the lowest rate in five quarters, and 1.17% from the previous quarter, an initial official reading showed Friday. Growth exceeded the government's previous estimate of 2.83% on year, but was largely in line with analysts' expectations. The economy expanded 3.63% in the third quarter of 2014. Export growth stalled in the fourth quarter, edging up 0.5% from a year earlier, compared with a 6.7% rise in the third quarter. Plummeting crude-oil prices hit overseas sales of petrochemical products, which comprise a fifth of total exports. Electronics exports, however, recorded double-digit growth through the peak shipping season, as many Taiwanese manufacturers supply components for popular gadgets such as Apple Inc.'s new iPhones and China's Xiaomi smartphones. The export-driven economy faces headwinds, despite the recent uptick in U.S. demand, as the eurozone slows and demand cools in China, Taiwan's biggest trading partner. Economists say Taiwan's monetary policy will likely remain accommodative to lift growth, and that the central bank likely will allow the local currency to depreciate more against the U.S. dollar to boost the competitiveness of its exports. An improving job market also lifted Taiwan's private consumption by 2.33% in the fourth quarter, following a 2.92% rise in the third quarter. The government said the gain was capped by rising costs of eating out and a drop in sales at restaurants after an adulterated cooking-oil scandal broke in early September. In the fourth quarter, capital formation, which includes government and private-sector investment in fixed assets and changes in inventories, gained 2.19% from a year earlier, much slower than a 7.97% rise in the third quarter. Write to Fanny Liu at Credit: By Fanny Liu
Subject: Exports; Economic growth; Gross Domestic Product--GDP
Location: United States--US Taiwan China
Company / organization: Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649001938
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649001938?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Moody's Downgrades All Petrobras Ratings; Brazil's State-Run Oil Company Suffers Third Downgrade in Four Months
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: RIO DE JANEIRO--Moody's Investors Service said Thursday it downgraded all ratings for Petróleo Brasileiro, the third downgrade of Brazil's state-run oil company in four months and another significant setback for a company in the midst of a widespread corruption scandal. Moody's said it downgraded the company's unsecured debt from Baa2 to Baa3 and lowered Petrobras' baseline credit assessment from ba1 to ba2, based on "concerns about corruption investigations" and "uncertainty about the timely delivery of audited financial statements [that] could lead to significant liquidity pressures." Moody's said the ratings "remain on review for further downgrade." Petrobras is at the center of a vast corruption probe by Brazilian authorities, who allege that several former Petrobras executives colluded with construction companies and money launderers to artificially inflate the cost of certain Petrobras contracts. Three former Petrobras executives have been indicted, and more than 30 people tied to the scheme have been arrested so far. The scandal has taken its toll on Petrobras's reputation and its financial standing. On Wednesday, Petrobras released its unaudited third-quarter earnings results, two months late because its auditor refused to sign off on them amid the corruption probe. But the company didn't include a widely expected write-down of assets tied to those inflated contracts, another worrying sign, according to Moody's. "The lack of progress in disclosing approximate adjustment amounts is not an encouraging sign for the timely release of audited year-end financial statements," Moody's said in a statement. Petrobras said Wednesday it is working to assess the amount of overvalued assets, and said it won't need to access debt markets in 2015. A Petrobras spokeswoman didn't immediately respond to a request for comment on the downgrade. Write to Will Connors at Credit: By Will Connors
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649006486
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649006486?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico Prepares to Cut Spending as Oil-Price Drop Hits Revenue; By Reducing Spending, Government Signals It Aims to Continue Lowering Deficit
Author: Pérez, Santiago; Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--The Mexican government plans to make spending cuts to offset a drop in revenue from falling oil prices and prevent its budget gap from widening further, according to people familiar with the plan. Finance Minister Luis Videgaray is expected to disclose the extent and magnitude of the adjustments in public spending for this year as early as Friday, said one of the people. The minister has scheduled a news conference Friday morning to discuss the state of the country´s economy. Despite two decades of macroeconomic stability and strong exports, some economists have grown concerned about an increase in government borrowing since the global financial crisis. By cutting spending, the government would be signaling that it intends to stick to its plan of gradually reducing deficits over coming years. That could allay economists' concerns that Mexico could be relaxing fiscal discipline ahead of midterm elections in July, one person said. A senior Finance Ministry official confirmed there are plans to cut federal spending this year, and to adjust spending plans for 2016 in an effort to counter volatility in global markets. The official said two-thirds of total cuts planned for this year would concentrate on current spending, which typically excludes investment projects. Government ministries will be required to lower operating and administrative expenses as part of the austerity drive, which could be relaxed if oil prices recover, said the person familiar with the government´s plans. Faced with economic growth of just 1.4% in 2013, the government of President Enrique Peña Nieto widened the fiscal deficit to an estimated 4.2% of gross domestic product last year to boost growth through public spending. The wider deficit was coupled with a tax overhaul that increased non-oil tax revenue, but also slowed down economic growth. The 4.7 trillion peso ($322 billion) budget approved by Congress for 2015 represented a 1.6% increase over 2014, and calls for a fiscal deficit of around 4% of GDP. "Fiscal discipline was abandoned in Mexico a few years ago, and this has become more acute at present," said Oscar Vera, a Mexican economist and consultant. "The pace at which the budget gap has widened is worrisome." Critics also say that relaxing fiscal discipline amid persistent violence and allegations of conflicts of interest among senior government officials could affect perceptions of Mexico's riskiness and increase funding costs. The federal government, which relies on oil and related taxes for around 30% of its revenue, budgeted for oil at $79 a barrel this year, and hedged about 60% of planned exports at $76.40 a barrel, intending to use money from an oil stabilization fund to cover the difference. The problem is that the government is facing cash-flow shortages before income from hedged oil sales comes in toward the end of the year, according to one person with knowledge of the plan. The price for Mexico's exported crude averaged $52.37 a barrel in December, and has moved below $40 a barrel in January. Major infrastructure plans such as a high-speed rail in central Mexico and a new airport for Mexico City won't be affected, this person added. As part of the austerity push, state-owned oil company Petróleos Mexicanos and electricity utility Comisión Federal de Electricidad will also implement spending cuts. Energy minister Pedro Joaquín Coldwell said this week that spending cuts were being analyzed at both companies. Part of the increased spending in the past two years has been funded with high oil prices, and some through increased borrowing, which Mr. Videgaray has defended as necessary to raise long-term economic growth. The higher spending has had no impact so far on the government's ability to issue debt. The government this month sold $4 billion in 10-year and 30-year global bonds, securing record-low yields, while yields on 10-year peso bonds recently touched 18-month lows, supported by demand among foreign investors. "You don´t see widespread concerns abroad over Mexico's fiscal discipline because other regional peers, such as Brazil, are doing much worse," said Carlos Elizondo, an economist at Mexico's CIDE university. "But fiscal discipline has clearly deteriorated over the past three years." Mr. Peña Nieto's economic overhauls, which included historic changes in energy laws that opened the oil industry to private investment, prompted the three main ratings firms to upgrade Mexico's sovereign-credit ratings further into investment grade since May 2103. "In Mexico there is greater pessimism than abroad," said Víctor Herrera, managing director in Mexico at Standard & Poor's. "Foreign analysts and investors are less worried. When you compare Mexico to other countries such as Russia and Brazil, it's not that bad," Mr. Herrera said Mexican governments have set a precedent for belt-tightening when needed in the past. "We've had budget cuts before, and it wasn't such a big deal. Growth was slowed a little," he said. Write to Anthony Harrup at Credit: By Santiago Pérez And Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649012895
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649012895?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Price Slide Hits LNG Markets; Suppliers May Look to Tweak Contract Terms, Analysts Say
Author: Yep, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
On the country's west coast, the $54 billion Gorgon LNG project, operated by Chevron Corp. with backing from Royal Dutch Shell PLC and Exxon Mobil Corp., is expected to come on line sometime this year.
Full text: SINGAPORE--The collapse in oil markets in recent months is now being mirrored in Asian liquefied natural gas markets, where prices have nearly halved in the last four months. The price of LNG, a key fuel source for power generation particularly in northern Asia's economic powerhouses, fell to $7.45 per million metric British thermal units on January 28, according to the Japan/Korea Marker published by Platts, a pricing agency, its lowest level since June 2010. Just a year ago LNG--natural gas that has been supercooled to a liquid at minus 160 degrees Celsius so it can be transported on tankers--was trading at around $20 a mmBtu in Asia. As recently as October it was trading at around $14 a mmBtu. The sharp drop in LNG prices is reducing the near-term returns on some major new plants that have been built in recent times, particularly in Australia, to meet an expected surge in demand from Asia. Countries like China are looking to use more gas in electricity production, to replace more environmentally-harmful coal, and in transportation to replace diesel fuel. Over the next two years over 60 million tons a year of new LNG supply is expected to come on stream, a flood of new supply not seen since Qatar, the world's largest natural gas exporter, started major operations in 2007-2008. In December, Britain's BG Group PLC started shipping cargoes from its $20.4 billion QCLNG project in Australia's Queensland state. On the country's west coast, the $54 billion Gorgon LNG project, operated by Chevron Corp. with backing from Royal Dutch Shell PLC and Exxon Mobil Corp., is expected to come on line sometime this year. Exxon and its partners, including Australia's Oil Search Ltd., switched on a major LNG project in nearby Papua New Guinea last May. For now, such new supply is swamping Asian demand growth, which has moderated as economic expansion has slowed across the region. In Japan and Korea, nuclear power plants closed following the Fukushima disaster in 2011 are slowly coming back on line, contributing to the slowing rise in demand. Gas consumption in China and India meanwhile hasn't ramped up as quickly as expected. That could lead to some LNG suppliers looking to tweak contract terms, analysts say. "There is so much uncertainty in the market as to where crude is going in the next one or two years that it's going to be very hard to find a comfortable [LNG] price mechanism that both the buyer and seller can agree on," said David Hewitt, managing director and co-head of oil research at Credit Suisse. "I think there are going to be an awful lot of flights between negotiating sellers in Australia and buyers in Japan, South Korea and Taiwan," he said. While spot gas prices are an important indicator of market sentiment, the price of LNG supply contracted for the long term, which is a bigger chunk of the overall market, has also sunk. LNG-producing companies typically agree to sell most of their gas upfront at rates linked to oil prices, to fund their projects. When oil prices fall, that reduces producers' revenue: Brent crude has lost almost 60% since June last year. Several high-cost gas projects, from Australia to North America, that were under scrutiny when prices started weakening are now almost certain to stall or be adapted, analysts say. In December, Woodside Petroleum Ltd. and partners including Shell said they were pushing back a final investment decision on the proposed Browse LNG project in northwestern Australia until 2016. Meanwhile, talk of bringing more U.S. natural gas to Asia has dissipated as the gap between North American and Asian gas prices has narrowed. "Henry Hub [the U.S. gas price benchmark] is a sound bite. It has been left at the side of the road and no one's going to talk about that any more," Mr. Hewitt said. Ross Kelly contributed to this article. Write to Eric Yep at Credit: By Eric Yep
Subject: LNG; Natural gas; Energy policy; Petroleum industry
Location: Asia China
Company / organization: Name: Oil Search Ltd; NAICS: 213111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Credit Suisse Group; NAICS: 522110; Name: BG Group PLC; NAICS: 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649023197
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Waver After U.S. GDP Data; Too Early for Serious Rebound Until Production is Cut, Analysts Say
Author: Berthelsen, Christian; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Mr. Naimi, one of the most influential oil-price brokers in the global market, was the main strategist behind the November decision by the Organization of the Petroleum Exporting Countries in a bid to protect the cartel's market share against booming U.S. shale production.
Full text: Oil prices wavered between gains and losses Friday as fourth-quarter U.S. economic growth came in weaker than expected. The domestic and international leading oil contracts had been in positive territory, but drifted lower after . The average estimate of economists surveyed by The Wall Street Journal was 3.2% growth. The global Brent contract slipped 11 cents, or 0.2%, at $49.02 a barrel on the ICE Futures Europe exchange. Light, sweet crude for March delivery gained 15 cents, or 0.4%, at $44.68 a barrel on the New York Mercantile Exchange. Analysts said the small gains early in the session were likely the result of traders taking profits from bearish bets against the market given the end of the trading week and month. Traders buy contracts to close out bearish bets. But with the global oil supply-demand picture unrelentingly weak and market sentiment bearish, the addition of a lower-than-expected GDP reading for the world's largest economy took away any buying motivation in the market. "The market's really fighting a losing battle here," said Andy Lebow, a broker at investment bank Jefferies. "It's hard to trace a meaningful recovery in the next few months." Oil futures have lost nearly 60% of their value since last June, as surging production from the U.S., Iraq and Libya have flooded the market at a time of weak demand growth as the global economy slows. The losses have stabilized somewhat in the last two weeks, but fundamental factors are expected to continue to deteriorate in coming months. Indeed, market participants have been stunned by a pair of back-to-back U.S. inventory surges in domestic oil stockpiles in the last two weeks, with production reaching a new 31-year high. "Crude oil is once again dead-cat bouncing," analyst Matt Smith of research consultancy Schneider Electric said in a note. "Meow." Major oil companies have announced spending cuts in recent weeks to cope with the price rout. Chevron Corp. said Friday that , resulting in better-than-expected results in its December quarter. Still, Chevron said it plans to pare its capital spending by 13% this year to $35 billion. Royal Dutch Shell said Thursday it would curb its planned spending over the next three years by some $15 billion and scale back investments in shale. ConocoPhillips also said it would slash its capital budget as the company reported losses in the fourth quarter of last year. Meanwhile, Saudi Arabian King Salman bin Abdulaziz has ordered major changes to his government, including a cabinet shuffle, but decided to keep veteran oil minister Ali al-Naimi in place. Mr. Naimi, one of the most influential oil-price brokers in the global market, was the main strategist behind the November decision by the Organization of the Petroleum Exporting Countries in a bid to protect the cartel's market share against booming U.S. shale production. The price slump, however, is good news for the global economy, reducing gasoline prices at the pump and providing a boost to economic growth for net importers of oil. Barclays estimates that the halving in crude prices in the past six months, if sustained for the whole of 2015, would mean a transfer of $1.6 trillion from oil-producing to oil-consuming countries. In refined products, February gasoline fell 1.22 cents, or 0.9%, to $1.3415 a gallon on the Nymex. February diesel fell 1.34 cents, or 0.8%, to $1.6050 a gallon. Write to Georgi Kantchev at Credit: By Christian Berthelsen And Georgi Kantchev
Subject: Petroleum industry; Capital expenditures; Crude oil prices; Gasoline prices; Economic growth
Location: United States--US
People: Naimi, Ali I
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649039767
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649039767?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Palm Oil Prices Are Under Pressure; Demand Is Slow in Both Food and Fuel Sectors
Author: Tan, Huileng
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: SINGAPORE-- from slowing demand in both the food and fuel sectors, dampening investor hopes for prolonged gains after prices surged to a six-month high earlier this month following . Consumption of palm oil, which is used in thousands of products from biscuits to lipstick to transportation fuel, has been suppressed by forecasts of bumper harvests for competing oilseeds such as soybeans and sunflower seeds. And a slump in crude-oil prices has sent palm-based biodiesel demand plummeting. Receding floodwaters aren't helping prices either. "We are maintaining a downward bias for palm oil prices, particularly as the floods have subsided in Malaysia. Harvesting activities have resumed, which means that the market is anticipating higher supply for the month of January," said David Ng, a Kuala Lumpur-based derivatives specialist at Phillip Futures. Global benchmark crude palm-oil prices on the Bursa Malaysia Derivatives hit a six-month high of 2,394 Malaysian ringgit ($659) a ton on Jan. 15 before slumping 11% as prospects of prolonged supply tightness ebbed. The benchmark BMD palm oil contract hit a seven-week low of 2,106 ringgit a ton on Friday. The world's most widely used vegetable oil, palm oil is produced primarily in Indonesia and Malaysia, which collectively account for 85% of global output. Its price sank 20% last year because of an abundance of competing oilseeds, even as both countries mandated that they would use more palm-based biodiesel. Palm-oil prices have been under pressure thanks in part to , a competing product, following a large harvest last year. The U.S. will have inventories of 410 million bushels of soybeans at the end of the 2014-15 season in August, the U.S. Department of Agriculture predicts, above analysts' expectations for about 402 million bushels. The stockpile will add to a record crop of about 3.97 billion bushels of soybeans last year. Prices of soybean oil on the Chicago Board of Trade have fallen to a six-year low and weak prices are prompting buyers from India to switch to soybean oil from palm oil. Govindlal G. Patel, managing partner of Indian firm G.G. Patel & Nikhil Research Co. said imports of soybean oil will rise from December to February. India is the world's largest importer of palm oil. A slump in crude-oil prices to 5½ year lows is also challenging efforts by Indonesia and Malaysia to use more palm oil at home in biofuel blends to help support lackluster prices. With crude-oil prices below $50 a barrel, cost savings from palm feed stocks have been wiped out as palm oil is now $110 a ton more expensive than diesel. Write to Huileng Tan at Credit: By Huileng Tan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649040010
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649040010?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Chevron's Pricey Wells Tripped Up by Oil's Fall
Author: Gilbert, Daniel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Jan 2015: B.1.
Abstract:
The company aims to pump the equivalent of 3.1 million barrels a day by 2017, a 20% increase over current levels. [...]recent months, high oil prices helped Chevron finance $156 billion of spending since 2010 on developing new sources of oil and gas. Even with those prices, the heavy spending has taken a toll on Chevron's balance sheet. Since 2012, the company has shelled out $23 billion more on producing energy, paying dividends and buying back shares than it has brought in from operations and selling assets.
Full text: As Chevron Corp. closes in on its long-elusive goal of pumping more oil, another target is slipping away: Boosting profits. Chevron's drive to increase its oil-and-gas production, the most ambitious among the world's giant energy companies, is beginning to show results, with two major deep-water projects in the Gulf of Mexico starting up late last year. But the newest barrels are flowing just as oil prices have crashed more than 60% since last summer; U.S. crude prices dipped below $44 a barrel on Thursday, the lowest in almost six years, and closed at $44.53. Rising production isn't likely to make up for the bite of sharply lower prices when Chevron reports quarterly profits. On Friday, analysts expect it to report fourth quarter per-share profit of $1.63, down nearly 37% from a year ago, according to Thomson Reuters. Analysts' consensus for 2015 full-year profit is about half what it was last year. John Watson, Chevron's chief executive, said in a statement to The Wall Street Journal that the San Ramon, Calif., company "has a long history of managing volatility in commodity prices. This cycle is no exception." Chevron "will continue to be focused on aligning costs and capital spending to market conditions," he said. "As current projects come online, they will generate significant revenue for decades." Buoyed in recent years by high prices, Chevron and other oil titans have spent at historic levels to drill in miles-deep waters, build plants to freeze gas into a shippable form and melt oil out of tar-like sands. Meanwhile, smaller companies have moved faster, poking enough holes into U.S. shale rock-formations to deliver about 3.5 million barrels of oil a day above 2010 levels. That increase, almost as much crude as Chevron and Exxon Mobil Corp. produce combined, has added fresh capacity to the global oil market and contributed to the nose-dive in prices. Now that Chevron and its rivals are finally turning on the taps of big-ticket, years-long projects, they appear to have missed the window of the highest sustained oil prices in modern history -- and the potential for the greatest payoff. "Short-term, low-cost shale is a brutal competitor" to projects that take years to complete, says Paul Sankey, senior analyst for Wolfe Research LLC, a boutique research firm. Profits of the world's biggest energy companies, including Chevron, Royal Dutch Shell PLC and Exxon Mobil are better insulated than most oil producers because they also make money from refining the fuel into gasoline and diesel. The lower cost crude has helped their refinery businesses improve profit margins. Valero Energy Corp., the largest U.S. refiner, reported a $1.2 billion profit on Thursday, lower than a year ago but still beating analysts' estimates. Chevron's competitors are moving aggressively to curb spending as cheap crude slices into their cash flow. Shell said on Thursday it would spend $15 billion less than planned over the next three years, reporting a $4.2 billion profit for the last three months of 2014 that missed analysts' expectations. Occidental Petroleum Corp. slashed its capital budget by a third, to $5.8 billion, while swinging to a loss of $3.4 billion last quarter. ConocoPhillips lopped 15% off its 2015 spending plans, after a 20% reduction in December, as it disclosed a $39 million loss on Thursday. Chevron hasn't yet laid out its capital plans for this year, but many analysts expect it will disclose a reduction when the figures are released. The slump in crude prices is a bitter pill for Chevron. The company aims to pump the equivalent of 3.1 million barrels a day by 2017, a 20% increase over current levels. Until recent months, high oil prices helped Chevron finance $156 billion of spending since 2010 on developing new sources of oil and gas. Even with those prices, the heavy spending has taken a toll on Chevron's balance sheet. Since 2012, the company has shelled out $23 billion more on producing energy, paying dividends and buying back shares than it has brought in from operations and selling assets. Mr. Watson acknowledged last March that many of the company's big-ticket projects depend on expensive crude, which he then suggested would continue. "The $100 barrel is the new $20 barrel," Mr. Watson said at a speech last March during the IHS CERAWeek conference. Days later, he laid out plans to spend $40 billion a year from 2015 to 2017. Those plans, he told analysts, were premised on rising cash flow. Chevron's costliest investments, like a $54-billion project in Australia to liquefy and export natural gas, could yet pay off if prices rebound soon. Such mega-projects have the advantage of delivering steady streams of petroleum for years. They require much less capital once completed. But while a shale well may not be as profitable as a deep-water well that yields many more barrels, it has the advantage of producing oil in months rather than years. When Chevron committed $7.5 billion in 2010 to develop half-a-billion barrels in the Gulf of Mexico, oil sold for about $80 a barrel in the U.S. After hovering around $100 a barrel for the last three years, the price sunk to $67 by the time Chevron hooked up its wells, and has fallen $20 since. Chevron and its peers have "structured themselves for a $90-plus world, and they're in a $50 to $60 [a barrel] world," says Anish Kapadia, a London-based managing director for energy investment bank Tudor, Pickering, Holt & Co. Credit: By Daniel Gilbert
Subject: Petroleum industry; Corporate profits; Crude oil prices; Earnings forecasting; Petroleum production
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 211111, 324110
Classification: 9190: United States; 3100: Capital & debt management; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Jan 30, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649045625
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649045625?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Fu rther reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Prices Spread Pain Far Across The Oil Patch
Author: Ailworth, Erin; Molinski, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Jan 2015: A.1. [Duplicate]
Abstract:
Many big energy companies have said they plan to slash billions of dollars in spending along with thousands of jobs; energy giant ConocoPhillips told employees Thursday to expect a salary freeze and layoffs. Ed Hazard, who heads a group for royalty owners in California, says a deal to drill a dozen wells on his family's property in Santa Barbara County now appears to be in doubt, a victim of low oil prices.
Full text: DALLAS -- Rumor became reality here last week when dozens of workers lost their jobs at Laredo Petroleum Inc. The Oklahoma-based energy outfit said it closed its regional office to cope with plunging oil prices. The layoffs were "kind of like a death in the family," says Robert Silver, age 62, a geophysicist who had helped Laredo decide where to drill in the Permian Basin in West Texas. Trouble has been looming over the oil patch since crude prices began falling last summer, from over $100 a barrel to under $50 today. But only now are the long-feared effects of a bust starting to ripple through the complex energy ecosystem, affecting Houston executives, California landowners and oil old-timers in Oklahoma. Many big energy companies have said they plan to slash billions of dollars in spending along with thousands of jobs; energy giant ConocoPhillips told employees Thursday to expect a salary freeze and layoffs. Indicators like drilling permits in Texas have fallen sharply. Cutbacks aren't yet reflected in broad data on employment, home sales or tax collections. For example, the federal Bureau of Labor Statistics says that employment in oil and gas extraction rose in December to 216,100, the highest level since 1986. But fallout is beginning to affect people, starting with the legions working as suppliers to the energy industry. Eric Herschap is chief operations officer at Exclusive Energy Services LLC, a private company in Orange Grove, Texas, that offers services, including equipment rentals, to exploration companies. His customers are demanding price cuts of 15% to 25%, and Exclusive offers additional discounts beyond that, he says. So the company laid off 10 of its 45 employees and is cutting bonuses for those who remain. Mr. Herschap says his brightest engineers are now fielding phone calls from customers with technical questions. Nonenergy companies that rely on roughnecks are also pulling in their horns. Danny and Kim Gallo moved from Connecticut to tiny Runge, Texas, last February to open Boom Town Food Trucks to serve the Eagle Ford Shale. But the company operates just one truck and a kitchen in a trailer at the moment, and the Gallos, who have backgrounds in the hospitality industry, have decided against adding another truck for a while. "You're sitting there and saying, 'Wow, did we miss the party?'" says Mr. Gallo, whose most expensive item is an $11 double chorizo burger. Fancier establishments that cater to energy executives are taking action, too. Steve Zimmerman has owned a restaurant and boutique hotel in Houston for decades and remembers the oil crash of 1986. Back then, he began offering an "Oil Barrel Special," a multicourse meal with a price pegged to the (falling) cost of crude. This month, he resurrected the special in an effort to attract customers while showing that he feels their pain. Menus like escargot, salmon and bread pudding are on offer for about $50, depending on the closing price of West Texas Intermediate. As oil prices started to fall, Houstonians were hoping for a hiccup, he says. Now, "they're getting more cautious." That's in part because the shares of energy companies have tanked along with crude. Kolja Rockov, chief financial officer of Linn Energy LLC, sold nearly half of his stake in the oil-and-gas partnership in a margin call, the company disclosed. Mr. Rockov had pledged units of the company as collateral for a loan, and was forced to sell 230,900 of them for an average of $9.46, or almost $2.2 million. The company's stock has fallen about 72% in the past year. Mr. Rockov didn't respond to requests for comment. Meanwhile, some oil field workers in North Dakota are reporting shorter shifts and less overtime. Calls for help have been coming in faster at the Rig Wives Foundation of Odessa, Mo., which provides assistance to oil-field families, says Tanya Beeks, who started the small group in 2010. "It's mostly electric bills, gas bills, phone bills," Mrs. Beeks says of the aid she doles out with the help of donations and the proceeds from merchandise she sells online. Those outside of the energy industry are also affected. Landowners are starting to get lower royalty payments for the oil pumped on their properties, and new leasing deals are dwindling. Ed Hazard, who heads a group for royalty owners in California, says a deal to drill a dozen wells on his family's property in Santa Barbara County now appears to be in doubt, a victim of low oil prices. "This is going to hurt, no question," he says. For some of the smallest outfits in the energy-production business, it isn't so much what they are doing in response to low oil prices as what they aren't doing: fixing equipment when it breaks. That is the approach adopted by Tom Dunlap, who pumps oil from some of the same wells his grandfather drilled nearly 100 years ago near Ardmore, Okla. Such stripper-well operations don't produce a lot of oil, but nationally they pump about 700,000 barrels a day, according to their trade association. When oil prices were high, Mr. Dunlap says he would gladly spend $1,000 or more to repair his old pump jacks and tanks. No more, the 73-year-old president of Tripledee Drilling Co. says. Laredo, the company that closed its Dallas office, said it was laying off 75 employees, about 20% of the workforce at the company, which has a stock-market value of about $1.3 billion. "While it is a necessary step due to the substantial drop in commodity prices and the resultant reduction in the company's drilling activities, we do not take such actions lightly," it said. Mr. Silver, the geophysicist, says that after living through oil busts, he has saved for the bad times and could retire -- though he doesn't want to. "Probably the scariest thing out there is all of a sudden being without health insurance," Mr. Silver says. "Just being thrown in the marketplace, that's tough." Credit: By Erin Ailworth and Dan Molinski
Subject: Layoffs; Petroleum industry; Crude oil prices; Economic impact
Location: United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111
Classification: 9190: United States; 8510: Petroleum industry; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Jan 30, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649045662
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649045662?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Consumer Shares, Gain by Oil Prices Help Lift Stocks
Author: Scaggs, Alexandra; Vaishampayan, Saumya
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]30 Jan 2015: C.4.
Abstract:
Investors have been fretting that oil prices could signal slowing demand overseas, so any stability in oil prices is good news, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management.
Full text: U.S. stocks rose alongside oil prices, as upbeat corporate-earnings reports helped spur consumer stocks higher. The Dow Jones Industrial Average climbed 225.48 points, or 1.3%, to 17416.85. Roughly 81 points of the rise in the Dow came from two stocks, McDonald's and Boeing. McDonald's jumped $4.49, or 5.1%, to $93.27 as investors cheered an executive change. Boeing rose 8.14, or 5.8%, to 147.78, extending gains from Wednesday, when it rose 5.4% after its latest quarterly results. The S&P 500 gained 19.09 points, or 1%, to 2021.25, while the Nasdaq Composite Index rose 45.41 points, or 1%, to 4683.41. Stocks in Japan led Asia higher early Friday with electronics maker Toshiba rising on sharp earnings growth. The Nikkei stock average was up 0.6%, Hong Kong's Hang Seng Index was flat and Australia's S&PASX 200 was up 0.7%. In the U.S. Thursday, stocks climbed in late-afternoon trading, as crude-oil prices turned higher. Crude-oil prices rose 0.2% to $44.53 a barrel. Energy shares in the S&P 500 edged up 0.2%, after losing as much as 2% earlier in the day. Investors have been fretting that oil prices could signal slowing demand overseas, so any stability in oil prices is good news, said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management. He said he thinks that the worst of the declines should be near an end, barring any unexpected increase in supply. "Oil moving higher . . . shows the global growth picture isn't as ugly as some are expecting," which should support stocks, Mr. Jacobsen said. Most of the focus for U.S. stock investors Thursday was on fourth-quarter corporate-earnings reports, traders said. While Thursday brought some good earnings news, especially for consumer stocks, for the most part it has been a lackluster earnings season. A stronger U.S. dollar, the collapse of oil prices and weak profits among big banks have combined to put a dent in S&P 500 profits, analysts said. With 195 companies in the S&P 500 having reported results, earnings are on track to rise 1.8% from a year ago, according to FactSet. Going into the reporting season, analysts had expected earnings to increase 1.1% from a year earlier. But without a huge rise in profits at Apple, S&P 500 earnings would be flat, FactSet said. "Earnings for some of the bigger names have not been good," said Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas. Consumer-discretionary stocks in the S&P 500 gained 1.3% after the news from McDonald's and upbeat earnings reports from the sector. Analysts said retailers should benefit from falling oil prices as U.S. consumers spend less on gasoline. Coach shares rallied 2.48, or 6.8%, to 38.94 after its quarterly earnings declined less than expected and the company known primarily for its handbags highlighted a slight improvement in North American sales. Ford Motor rose 39 cents, or 2.7%, to 14.85 after the auto maker's profit exceeded expectations and the company forecast stronger results for 2015. Amazon.com rose 39.80, or 13%, to 351.58 in after-hours trading after saying that its fourth-quarter profit fell by less than forecast and that world-wide paid memberships to its Amazon Prime program increased 53% last year. Elsewhere, a pair of technology firms reported disappointing results. Qualcomm shares lost 7.30, or 10%, to 63.69 after it cut the forecast for its yearly profit, citing shifting market share among smartphone makers. Alibaba Group Holding declined 8.64, or 8.8%, to 89.81 after quarterly revenue fell short of analyst forecasts. In other markets, gold futures fell 2.4% to $1,254.60 an ounce. Treasury prices fell, pushing the yield on the 10-year Treasury note up to 1.755%, from 1.723% on Wednesday. Credit: By Alexandra Scaggs And Saumya Vaishampayan
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Jan 30, 2015
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649067190
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649067190?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Norwegian Krone Strengthens on Central Bank Buying Plan; Bank Aims to Match Currency Inflows From the Oil Sector With Government's Spending Needs
Author: Duxbury, Charles; Cox, Josie
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
[...]since October last year, the central bank has taken to selling some of its foreign exchange to top up the government's kroner income.
Full text: The Norwegian krone firmed against the euro Friday after the country's central bank said it would increase the amount of kroner it will buy on behalf of its sovereign-wealth fund next month, as it seeks to match the currency inflows from the oil sector with the government's spending needs. Norges Bank said it would sell the foreign exchange equivalent of 700 million kroner a day ($89.8 million) in February, which is the largest daily amount since the bank started buying kroner in this way last October. The Norwegian krone strengthened against the euro, which fell to 8.81 kroner from 8.87 kroner, as investors welcomed the idea of having a buyer in the market rather than dwelling on the reasons for that buying being there. The need to ramp its kroner buying reflects an underlying weakness in the oil sector, said Phyllis Papadavid, a currency strategist at BNP Paribas. Norway receives income from its lucrative oil industry in both kroner--mainly in taxes from oil companies operating in Norway--and foreign currency from its direct ownership of stakes in oil companies. Before October 2013, the kroner income was more than enough to meet the government's spending needs and the central bank would sell the excess in the market for foreign exchange. As oil production levels have fallen, though, the income in kroner has fallen short of what the government needs for its budget. As a result, since October last year, the central bank has taken to selling some of its foreign exchange to top up the government's kroner income. Oil output in 2014 was of 2000 and as Brent crude prices have halved over the past six months oil industry investments have slowed and income to the state has dropped. Norway is western Europe's largest oil producer. The central bank says on the last working day of the month how much foreign currency it will buy or sell in the month ahead on behalf of the country's wealth fund, where the country deposits most of its oil wealth. The central bank sold forex equivalent to 500 million kroner a day in January. Write to Charles Duxbury at and Josie Cox at Credit: By Charles Duxbury and Josie Cox
Subject: Petroleum industry; Central banks; Petroleum production
Location: Norway
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: Norges Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649085591
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649085591?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Chevron Posts Lowest Quarterly Profit in Five Years; Oil Major to Pare Capital Budget by 13%, End Buybacks to Offset Low Crude-Oil Prices
Author: Gilbert, Daniel; Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Chevron Corp. said it would trim ambitious spending plans and stop buying back its shares as the collapse in oil prices erased billions of dollars from the company's cash flow.
Full text: Chevron Corp. said it would trim ambitious spending plans and stop buying back its shares as the collapse in oil prices erased billions of dollars from the company's cash flow. The San Ramon, Calif., company on Friday reported $3.5 billion in profit for the last three months of 2014, down 30% from a year ago and its lowest since the 2009 recession. It also outlined plans to spend $35 billion this year to find and tap oil and gas, a 13% cut from last year's budget, in response to oil prices that have slumped more than 60% since the summer to under $50 a barrel. With less cash coming in, the company is suspending its share buyback program for 2015, which had cost $5 billion a year since 2012. Repurchasing shares shrinks the number available to the public and tends to increase their value. Its shares were down 47 cents at $102.53 on Friday. John Watson, Chevron's chief executive, said the company remains on track to pump the equivalent of about 3.1 million barrels a day by 2017--20% more than its current levels--despite spending less. Oil prices must rise, he said, because companies won't invest enough to make up for the natural declines of existing oil and gas wells, eventually reducing supplies. "The projects that are going to meet demand going forward are more complex than 20 or 30 years ago, and so the costs of the projects will be higher, and will require a higher price than we're seeing today," Mr. Watson said. Chevron's spending plans remain ambitious relative to its rivals and its shrinking cash flow. On Thursday, Occidental Petroleum Corp. said it would spend a third less on producing oil and gas this year; ConocoPhillips said it would chop another 15% off its capital budget; Royal Dutch Shell PLC said it would spent $15 billion less than planned over three years. Exxon Mobil Corp., the biggest U.S. energy company, reports results on Monday. Chevron generated $6.5 billion from its operations in the fourth quarter of 2014, down 38% from a year ago, but still above analysts' expectations. Unless oil prices rebound significantly, that rate of cash generation isn't likely to cover the company's spending on exploration and production, plus dividend payments that totaled $7.9 billion last year. Even before oil prices fell, Chevron had been spending at a deficit, dipping into its pile of cash and borrowing more money. The company's debt rose to $27.8 billion by the end of 2014, doubling in two years and marking the highest it has been in at least 20 years, according to data compiled by S&P Capital IQ. The company still has $12.8 billion in cash, but that is about $3.5 billion less than at the beginning of 2014. Patricia Yarrington, Chevron's finance chief, said it could borrow "tens of billions of dollars" more. Mr. Watson, the CEO, said that while acquisitions aren't a priority, "We are actively screening opportunities that are out there and we'll take advantage of opportunities that we see." Overall, Chevron reported earnings of $3.47 billion, or $1.85 a share, down from $4.93 billion, or $2.57 a share, a year earlier. Results included a net $570 million gain on asset sales. Revenue fell 18% to $46.1 billion. Analysts polled by Thomson Reuters had forecast earnings of $1.63 a share and revenue of $30.65 billion. Chevron's bottom line was helped by foreign-currency effects, which have been a drag on many U.S. companies' results recently. Chevron said foreign currency helped its earnings by $432 million in the quarter, up from $202 million a year earlier. The pain from lower oil prices was cushioned by Chevron's refining business into fuels like gasoline and diesel, which reported profits quadrupled over a year ago. That business, which in recent years has accounted for less than 15% of its profits, provided $1.5 billion in earnings--44% of the company's total. The fall in oil prices masked the company's success at pumping more oil, as it began reaping petroleum from two major projects in the Gulf of Mexico's deep waters in the last months of 2014. But overall, Chevron's 2014 oil and gas output slipped 1% from a year ago. It said production could increase up to 3% this year. Write to Daniel Gilbert at and Chelsey Dulaney at Credit: By Daniel Gilbert and Chelsey Dulaney
Subject: Petroleum industry; Prices; American dollar; Cash flow
Location: San Ramon California
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Occidental Petroleum Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649096401
Document URL: https://log in.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649096401?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canadian Economy Shrinks Unexpectedly in November; GDP Fell 0.2% on Declines in Manufacturing, Mining and Oil and Gas Extraction
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Manufacturing is heavily geared to exports and the decline deals a blow to the Bank of Canada's hopes that exports and business investments will begin to drive sustainable economic growth as consumers are burdened with record debt.
Full text: OTTAWA--The Canadian economy contracted unexpectedly in November as manufacturing output fell sharply and mining and oil-and-gas extraction shrank. The data suggest fourth-quarter growth is set to fall well short of the Canadian central bank's latest forecasts, and will fuel expectations that further rate reductions are in the offing after the Bank of Canada's shock rate cut last week. The Canadian dollar fell sharply after the soft data, hitting a low not seen since March 2009. Canadian monthly gross domestic product, the sum total of goods and services produced in the country, fell 0.2% in November, the biggest contraction in a single month since December 2013, Statistics Canada said Friday. The figure was worse than already soft market expectations, which had called for economic growth to stall in November, according to a report from Royal Bank of Canada. On a year-over-year basis, growth slowed to 1.9% in November from 2.3% in the previous month. That figure also fell short of market expectations. U.S. figures released Friday also showed slower-than-expected growth south of the border, with GDP expanding an annualized 2.6% in the fourth quarter, against the 3.2% predicted by economists. The Bank of Canada last week forecast the Canadian economy would grow at a 2.5% annualized pace in the fourth quarter of 2014, a prediction that now looks too optimistic in light of the soft November figures. National Bank of Canada Senior Economist Krishen Rangasamy said the economy is likely to have posted growth of around 2% in the October through December period. "That, coupled with the recent Statistics Canada downgrade to employment, gives the central bank ammunition to dispatch another rate cut at its March meeting," Mr. Rangasamy wrote in a report. Earlier this week, Canada's statistics agency revised 2014 employment data, cutting its original estimate of job creation last year by about one-third. In November, the manufacturing sector caused the biggest drag on November growth, with output contracting 1.9%, the most since January 2009 when the economy was entering recession. Manufacturing is heavily geared to exports and the decline deals a blow to the Bank of Canada's hopes that exports and business investments will begin to drive sustainable economic growth as consumers are burdened with record debt. Mining and oil-and-gas extraction output also weighed on November growth, recording an overall decline of 1.5%. Mining and quarrying output alone fell 2.5% due to declines in iron ore, potash and coal mining. Oil-and-gas extraction fell 0.7% due to lower "non-conventional oil extraction," Statistics Canada said, referring to production in Alberta's oil patch. The central bank described last week's rate cut as insurance against the expected hit to the economy from plunging prices for oil, a key Canadian export. Write to Nirmala Menon at nirmala.menon@wsj.com Credit: By Nirmala Menon
Subject: Central banks; Manufacturing; Economic growth; Canadian dollar; Monetary policy
Company / organization: Name: Statistics Canada; NAICS: 926110; Name: Royal Bank of Canada; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649110324
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649110324?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mitsui Remains Focused on Resources; Japanese Trading House's Chief Executive Is Undeterred as Oil Prices Plunge
Author: Fukase, Atsuko
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: TOKYO--While many Japanese executives have welcomed lower oil prices, which have fallen by around 50% since June, others have been less pleased. Mitsui & Co., Japan's second-largest trading house, derives about half its profit from energy investments, making it the most dependent on resource-related sectors of its peers. Masami Iijima, chief executive of Mitsui, said the slide in oil prices has taken a toll on his company but he didn't expect its investments in oil-and gas-producing shale projects to become unprofitable as a long-term prospect. Like its rivals, Mitsui also runs businesses around the world in a range of sectors, including hospitals and telecommunications companies. In an interview with The Wall Street Journal, Mr. Iijima, 64 years old, talked about diversification and his hopes for Abenomics. Edited excerpts: WSJ: Has the drop in oil prices affected your business? Mr. Iijima: I think there will be a certain impact on our energy operations but even at the current [price] level, our business foundation will remain solid. Energy demand is growing. Demand for liquefied natural gas, for instance, is expected to more than double to 550 million tons by 2030 across the world, particularly in Asia. Given population growth and economic development, energy demand is definitely increasing. In the U.S., we have two energy assets in operation: a gas project at Marcellus Shale in eastern North America and at the oil-and gas-producing Eagle Ford shale in Texas. Since oil prices have fallen so much, we'll see some impact but [shale-gas producing operations] haven't been hit much. Everyone thinks of shale as high-cost but it isn't so. WSJ: Rival trading houses are shifting investments into non-resources sectors. Are you considering further diversifying? Mr. Iijima: Resources, energy are finite elements so when we think about Japanese energy security, we need to be committed to the businesses. Energy business can also contribute to nation-building abroad, such as with our development of a liquefied natural gas field in Mozambique. We'll be involved in the country's infrastructure--railway and ports. Besides energy business, we also would like to get involved other businesses in growth sectors. We have identified food and agriculture and health care as some of the key strategic areas in which we can collaborate with other businesses. WSJ: Sumitomo Corp. last year reported a huge loss from its shale investments. How do you handle risk management? Mr. Iijima: We have about 100 technical experts in the oil-and-gas division domestically and globally. They exchange data and information with various partners and oil majors to brush up their expertise. We're not perfect but we have good eyes. WSJ: What does a trading house do exactly? How is it different from an investment fund? Mr. Iijima: It's about making a connection. By conducting our trading business as a main player in certain industries, we can obtain important information and create new business opportunities even if the sector may be limited. It's true that we buy and sell like a private-equity fund, but we also try to contribute to Japanese or global economic growth by developing human resources. WSJ: In what ways do you want to grow your business outside resources sectors? Mr. Iijima: I'm interested myself in the lifestyle [consumer] segment. The [product] life cycle is short and so business models change quickly. We need to seize on such changes and how we form a platform or a partner for that would be a key focus. Right now, we're doing business with Indonesian conglomerate Lippo Group in several sectors including financial services and high-speed mobile service. We're also considering doing projects [with Lippo] in food and chemical-related businesses in Indonesia. WSJ: What do you expect from Prime Minister Shinzo Abe's economic policies? Mr. Iijima: I strongly hope for deregulation of Japan's agricultural sector. Our company has farms for agricultural production in Brazil but as a private company we aren't allowed to run farms in Japan. If the reform proceeds, we can start a business here using our experience. We can export agricultural products at a more competitive level. Medical services should also be deregulated. A private company can't operate a hospital in Japan but if we can take advantage of [our] experience [running hospitals] in Southeast Asia, that should create a win-win situation for everyone. WSJ: What experience in your career has helped you to run the company? Mr. Iijima: I faced a lot of problems when I worked in London in 1990. When I placed orders for good quality scrap steel in the former East Germany, I was waiting for the ship to arrive at a port for three days but she never showed up. It turned out the ship was sold away to someone else under a different name on the way, which caused a loss for us. But my boss didn't blame me for that. He told me not to give up easily and you should keep trying to do what you think is important. Résumé Career: Mr. Iijima Joined Mitsui in 1974, and spent years in its mineral and metal division, including a six-year assignment in London in the 1990s. He became president and chief executive in 2009. He has been named chairman and will take up the role in April. Education: He holds a bachelors in economics from Yokohama National University. Extracurricular: He has a lifelong passion for baseball, and also enjoys singing "kouta," traditional Japanese ballads. Credit: By Atsuko Fukase
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649626280
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649626280?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Paccar Says Lower Oil Prices Good For Truck Demand; Profits Up 18%, Buoyed By Higher Truck Sales
Author: Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Dozens of U.S. manufacturers this week have cited falling oil prices for undermining their sales and profits as oil-related customers cut back on orders for industrial equipment, construction machinery, steel and other durable items.
Full text: Lower oil prices should cause more U.S. consumer spending, which will stimulate demand for commercial trucks this year, truck manufacturer Paccar Inc. said Friday. Dozens of U.S. manufacturers this week have cited falling oil prices for undermining their sales and profits as oil-related customers cut back on orders for industrial equipment, construction machinery, steel and other durable items. But the maker of Peterbilt and Kenworth-brand trucks topped analysts' fourth-quarter expectations by logging a 13% increase in truck sales. Paccar expects industrywide retail sales of heavy-duty trucks weighing above 33,001 pounds in the U.S. and Canada to rise about 6% in 2015 over last year to a range of 250,000 to 280,000 vehicles. "Our assessment of the impact of lower oil prices is [that it's] a positive for the U.S. economy that will create additional consumer spending, which will benefit freight volumes and will be a positive for the truck industry," said Chief Executive Ron Armstrong said Friday during a conference call with analysts. Sales of heavy-duty trucks in the U.S. and Canada last year reached 253,151, the highest level since 2006, according to market forecaster ACT Research, which expects 2015 sales to rise 19% 302,000 trucks. The Bellevue, Wash.-based Paccar is the second-largest seller of heavy-duty trucks in North America with 28% of the market. Mr. Armstrong dismissed suggestions from analysts that higher truck sales last year were mainly caused by oil and gas producers' need for more trucks as they accelerated exploration and drilling activity. "About 10% or less of Paccar's volume is related to the oil and gas industry," Mr. Armstrong said. "That's a very small portion of what we do." Paccar's fourth-quarter truck sales grew to $4 billion from $3.54 billion a year earlier. In 2014, trucks sales rose 12.2% from 2013 to $14.6 billion. Paccar's sales volumes increased 4% last year from 2013 to 142,900 trucks. But unit sales in the U.S. and Canada increased 23%, helping offset an 18% decline Europe and a 7% drop in Latin America and the rest of the world. Overall for quarter, the company reported an 18% increase in profit to $394 million, or $1.11 a share, from $334 million, or 94 cents a share, a year earlier. Revenue climbed 11% to $5.12 billion. Analysts polled by Thomson Reuters expected a profit of $1.09 per share from revenue of $4.87 billion. Angela Chen contributed to this article. Write to Bob Tita at Credit: By Bob Tita
Subject: Trucks; Stock prices; Industrial equipment; Automobile sales; Profits
Location: United States--US Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649626317
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649626317?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Colombia Considers Measures to Aid Its Battered Oil Sector; Government Seeks to Mitigate Effect of Falling Oil Prices and Other Factors Hurting Industry
Author: Sara Schaefer Muñoz
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: BOGOTÁ, Colombia--Representatives from the country's energy ministry and hydrocarbons agency met on Thursday to come up with an action plan to assist Colombia's battered oil sector, as the share price of the country's largest independent oil company plunged. "We are committed to facilitating exploration and exploitation in Colombia, so we have to look for a way to make it viable," said Javier Betancourt, departing director of Colombia's National Hydrocarbons Agency, which manages Colombia's oil and gas resources. He declined to give details about the proposed measures. But people with knowledge of the talks said possibilities on the table, which aim to mitigate the devastating effects of falling world oil prices on an important Colombian industry, include a reduction of the country's stake in oil-company projects, allowing more revenue to flow back to companies and reducing the time it takes to get environmental approvals from around 16 months to under a year. Officials are also looking at giving companies more time to discover oil before exploration and production blocks must be handed back to the state, the people said. The government's moves come amid a storm of factors hitting Colombia's oil sector, including heavy company debt, a lack of new discoveries and the nearly 60% fall in petroleum prices since July. Colombia's two main producers have suffered, with shares of state-controlled Ecopetrol S.A. falling 52% since mid-July and those of independent Pacific Rubiales Energy Corp. down 85% in the same period. On Thursday, Pacific's share price hit a historical low of $2.79 Canadian dollars a share on the Toronto Stock Exchange. The price edged up on Friday morning to $2.90. The woes of the sector are a blow to the Colombian government, which receives some 20% of its revenues from oil. Members of congress and economists say the country needs a robust tax-take to support a peace process with Marxist guerrillas, which is expected to be signed later this year. They estimate the costs of implementing the peace process, which includes retraining thousands of rebel fighters and compensating Colombians who lost land and family members in the conflict, could cost tens of billions of dollars. Oil-sector leaders have been pushing the government to take action to help the industry. "I hope they make some decisions to incentivize a sector that generates so much revenue for the country," Ruben Dario Lizarralde, president of industry trade group Campetrol, said at an oil conference in Bogotá last month. Pacific Rubiales, who has seen its share price collapse 97% since 2011, when it was a Wall Street darling, has made its own requests to bolster the company. Part of the reason the selloff in Pacific stock has been so dramatic, analysts say, is because the company must turn over its productive Rubiales field to Ecopetrol in 2016 under a previous agreement. Many investors wonder how Pacific will replace that source of production. Addressing that concern, Pacific last month asked Ecopetrol for a new contract for it to keep operating in the field jointly with Ecopetrol, using a technology known as Synchronized Thermal Additional Recovery that heats oil found inside wells, which in Colombia is some of the world's thickest, to increase the amount that can be removed. An Ecopetrol spokesman said the board of directors is considering the request. People close to the matter say a decision could come in the first quarter. Frederick Kozak, a spokesman for Pacific Rubiales, declined to give details of the company's proposal, which isn't public. But he said that if Pacific and Ecopetrol work together in the Rubiales field using the STAR technology, the companies could extract around 30% of the dense oil there, a figure based on independent analysis of a recent STAR pilot project. Usually, the recovery is around 15%, he said. "It could be good for us, good for them and good for the country," Mr. Kozak said. If the contract isn't granted, he said, Pacific still produces oil elsewhere and can sell roughly $1 billion worth of noncore infrastructure and other assets to keep the company moving forward. "If we can continue in the Rubiales field, it would remove some uncertainty," he said. "But we still produce 100,000 barrels a day outside the Rubiales field, which is not immaterial." Daniela Blandón contributed to this article. Credit: By Sara Schaefer Muñoz
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649626349
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649626349?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Laurence Fink's Optimistic Outlook; The head of BlackRock on cheap oil, China, the downside to living longer and his outlook for 2015
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract:
Since the financial crisis, he says, many American state governments have balanced their budgets; now some have surpluses to spend on infrastructure. Though lower energy prices bode well for the economy in the long term, Mr. Fink is weighing the more immediate downside: a drop in employment numbers.
Full text: Laurence Fink, head of BlackRock, the world's largest asset-management company, likes to defy conventional wisdom. He has just returned from the World Economic Forum in Davos, Switzerland, where he says, "generally, the consensus is all wrong." Most people at the conference were "very worried about the world," he says. Some fretted about oil-price volatility; others were concerned with the future of the European economy. Mr. Fink doesn't share their dark views. Back in his office in midtown Manhattan, he says that 2015 could bring the best U.S. economy in several years. Mr. Fink has an unusual vantage point. He sits at the helm of a firm that manages $4.65 trillion worth of assets (as of the last quarter)--the investments of individuals, governments, pension funds and other global institutions. His firm advised the Federal Reserve and the Treasury Department during the 2008 financial crisis, and since then, he has spent more time advising the public sector, sharing his views and predictions with the Obama administration and world leaders. "We have addressed our banking crisis faster" than the Europeans, he says, which is one reason that he is optimistic about the U.S. economy. Since the financial crisis, he says, many American state governments have balanced their budgets; now some have surpluses to spend on infrastructure. "And our companies are in great shape," he adds. Though lower energy prices bode well for the economy in the long term, Mr. Fink is weighing the more immediate downside: a drop in employment numbers. Oil companies are starting to lay off employees, and the repercussions include "a little disappointment" in the market. But as more Americans realize that they will be saving $50 to $100 on gas every month and increase their spending, he expects more growth in the economy in the second half of the year. Lately, Mr. Fink has been keeping his eye on other trends that might seem like good news. Longer life spans in the U.S. are a blessing, he acknowledges, but he wonders about the broader economic implications. A tall, fit 62-year old, he shares the desire for personal longevity. He eats healthily (though he notes that "If I wasn't worried about managing my life, I'd have a hamburger and milkshake every day") and exercises four or five days a week. "I still exercise my jaw too much," he adds. Mr. Fink is concerned that too many people won't be able to afford living longer. "One of the biggest problems facing the U.S. is we're ill-prepared to build that nest egg...and there's no safety net if you're ill-prepared, other than Social Security." He thinks this trend could start to be a bigger problem in the next decade. "I'm bringing it up more and more," he says. "If you don't live your elongated life in dignity, it's a crisis." Mr. Fink says that, even while growing up in Van Nuys, Calif.--he's the son of a shoe-store owner and a college English professor--he gave a lot of thought to the longer term. He worked odd jobs as a teenager to save up for a camping trip to Hawaii or a backpacking adventure in Mexico. He went on to earn an undergraduate degree in political science at the University of California, Los Angeles, in 1974, as well as an MBA in 1976. From there he moved to Wall Street, where he started out as a bond trader. By age 28, he had risen to be the youngest managing director at First Boston, an investment bank that was acquired by Credit Suisse. At 31, he was on the firm's management committee--until one of the traders on his team lost $100 million on a single trade a few years later. Mr. Fink resigned soon after, and in 1988 he co-founded BlackRock as a division of the investment and advisory firm Blackstone Group. BlackRock split off from Blackstone in 1994 and became a public company in 1999. Today, it has more than 12,000 employees and more than 135 investment teams. They manage the portfolios of more than 7,700 clients, from sovereign-wealth funds to college endowments to corporations. With offices for his firm in 27 countries, Mr. Fink spends at least two weeks a month traveling. (U.S. airports are the worst, he says: "Kennedy airport is an embarrassment.") When he's not on the road, he lives with his wife of 30 years, mostly in New York. They also have a home in Colorado, where he enjoys skiing and fly-fishing. The couple has three adult children and three grandchildren. This weekend he will be flying to Delhi to host a session on infrastructure with Indian Prime Minister Narendra Modi for BlackRock clients. Mr. Fink has been encouraged by what the pro-business Mr. Modi has done for India's economy. "Since he's been prime minister, their equity markets have pretty close to doubled," he says. "He's proposed many reforms that make it easier to do business in India, and now we need to see if he implements them all. There's a lot of hope that he will." Mr. Fink is also feeling good about China's economy, which he expects to grow about 7% this year, compared with about 3% for the U.S. Still, China's growth has slowed from double-digit rates a few years ago. In China, the national saving rate has been between 35% and 40%, Mr. Fink says, in part because of the country's patchy government retirement and health-care benefits. China's one-child policy, though relaxed in recent years, also has meant that children bear a heavy burden in providing for their parents' retirement as well. China is starting to provide more public-supported pensions and health care, but "it's a fraction of what it should be," Mr. Fink says. He is encouraged by China's proposed fiscal reforms, such as steps to shift the country's debt burden toward the central government, away from local authorities, improving efficiency. Mr. Fink doesn't spend much time on social media. He has a LinkedIn profile with some 400,000 followers and posts commentary every month or so as part of the site's Influencers program. Still, he says, "We spend too much time focusing on social media and the apps on our iPhone." He thinks that many people haven't paid enough attention to the displacement caused by technology. "Think of all the people who used to be in agriculture, and now it's all mechanized," he says. To offset this shift, Mr. Fink thinks that governments should invest in infrastructure to provide jobs and create capital. He also thinks that successful countries will train workers to be able to do skilled jobs, such as writing computer code or building machines. Technology, he says, has been a boon to growth in energy, especially with advances in fracking and oil. "We have been blessed by the geology of our nation...and that has added two million jobs since 2010." It's just one of the reasons that "our economy is doing better than any other economy."
Subject: Economic crisis
Location: United States--US Switzerland
Company / organization: Name: World Economic Forum; NAICS: 926110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: Life
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649626656
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649626656?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Mexico to Cut Planned Spending; Government Seeks to Offset Effects of Lower Oil Prices and Adverse Global Economic Conditions
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]30 Jan 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexico's government will cut planned spending by about $8.3 billion this year to cushion the effects of plunging oil prices and adverse global economic conditions, while postponing a controversial high-speed train. Finance Minister Luis Videgaray on Friday said the cuts were a preventive measure to protect public finances against economic headwinds, as oil and related taxes account for about 30% of federal government revenue. Mexico also needed to confront the prospect of higher interest rates in the U.S., he added. "We're adjusting public spending to have lower financing needs in domestic and international financial markets, in a situation where with higher interest rates, and , financing will become more difficult to obtain," Mr. Videgaray said at a news conference. The measures seek to boost investor confidence and tackle concerns that Mexico could be tempted to relax fiscal discipline ahead of midterm elections in July. Despite two decades of macroeconomic stability, some economists have grown concerned about an increase in government borrowing since the global financial crisis in 2009. Mr. Videgaray said the budget cuts of 124.3 billion pesos, or about 0.7% of gross domestic product, are likely to have only a marginal impact on this year. The ministry is sticking to its GDP growth estimate of 3.2% to 4.2% for 2015. He reiterated that the government wouldn't increase or create new taxes nor take on greater public debt. "On the positive side, this means that the government has a buffer either against weaker [oil] prices, or a weaker economy," said Rodrigo Aguilera, Mexico analyst at The Economist Intelligence Unit. "It could also serve to add some degree of discipline to what was already a somewhat bloated 2015 budget." Mr. Aguilera said he was disappointed, however, that the cuts include investment projects like the 130-mile bullet-train from Mexico City to Querétaro. The project was initially awarded in November to a Chinese-led consortium, along with a handful of Mexican partners, with a $3.7 billion bid that included 85% long-term financing by the China Eximbank. It was canceled several days later, however, following complaints that other potential participants were turned down in their requests for more time to prepare an offer and concerns that several Mexican partners had ties to ruling party officials and government officials. The government in January, with plans to give potential bidders more time to prepare. The Chinese companies were expected to participate again without the original Mexican partners. Now, Mexico's government has suspended it indefinitely. Mr. Videgaray said the spending cuts wouldn't touch key social spending programs in areas such poverty alleviation, housing subsidies, education and agriculture, nor money transfers to state governments, but will include an austerity drive across government ministries. The government is also revising its budget plan for 2016, and will be working with the World Bank to find ways to make spending more efficient. Congress approved a fiscal deficit of 4% of gross domestic product for this year. The deficit in 2014 also ended at 4% of GDP. This year's spending cuts will be shared among the federal government, state oil company Petróleos Mexicanos, and state electricity Comisión Federal de Electricidad. The way the budget cuts are structured appears to be directed at making both firms more efficient, as they start to work alongside and compete with the private sector under new energy laws, said Banco Santander economist Rafael Camarena. The spending adjustments will likely require more private-sector participation in the government's long-term infrastructure development plan, including greater private-sector financing, extending existing concessions and making greater use of public-private partnerships, Mr. Videgaray said. Santiago Pérez contributed to this article. Write to Anthony Harrup at Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 30, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 164962675 9
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649626759?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Oil's Fall Prompts Mexico to Cut Spending, Suspend Rail Project
Author: Harrup, Anthony; Perez, Santiago
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Jan 2015: A.14.
Abstract:
Mr. Videgaray said the spending cuts wouldn't touch key social-spending programs in areas such poverty alleviation, housing subsidies, education and agriculture, nor money transfers to state governments, but will include an austerity drive across government ministries.\n
Full text: MEXICO CITY -- Mexico's government will cut planned spending by about $8.3 billion this year to cushion the effects of plunging oil prices and adverse global economic conditions, while postponing a controversial high-speed train. Finance Minister Luis Videgaray on Friday said the cuts were a preventive measure to protect public finances against economic headwinds, as oil and related taxes account for about 30% of federal government revenue. Mexico also needed to confront the prospect of higher interest rates in the U.S., he added. "We're adjusting public spending to have lower financing needs in domestic and international financial markets, in a situation where with higher interest rates, and the drop in oil prices, financing will become more difficult to obtain," Mr. Videgaray said. The measures seek to boost investor confidence and tackle concerns that Mexico could be tempted to relax fiscal discipline ahead of midterm elections in July. Despite two decades of macroeconomic stability, some economists have grown concerned about an increase in government borrowing since the global financial crisis in 2009. Mr. Videgaray said the budget cuts, which amount to about 0.7% of gross domestic product, are likely to have only a marginal impact on economic growth this year. The ministry is sticking to its GDP growth estimate of 3.2% to 4.2% for 2015. Mr. Videgaray said the government wouldn't increase or create new taxes nor take on greater public debt. "On the positive side, this means that the government has a buffer either against weaker [oil] prices, or a weaker economy," said Rodrigo Aguilera, Mexico analyst at the Economist Intelligence Unit. "It could also serve to add some degree of discipline to what was already a somewhat bloated 2015 budget." Mr. Aguilera said he was disappointed, however, that the cuts include investment projects like the 130-mile bullet train from Mexico City to Queretaro. The project was initially awarded in November to a Chinese-led consortium, along with a handful of Mexican partners, with a $3.7 billion bid that included 85% long-term financing by the China Eximbank. It was canceled several days later, however, following complaints that other potential participants were turned down in their requests for more time to prepare an offer and concerns that several Mexican partners had ties to ruling-party officials and government officials. Among them was a government contractor who built and holds the title to President Enrique Pena Nieto's family home in Mexico City, and sold a house in an exclusive golf resort to Mr. Vidergaray. The revelations sparked influence-peddling allegations. The Mexican government has denied allegations that it has favored politically connected businessmen to win public-works contracts. The government relaunched the rail project in January, with plans to give potential bidders more time to prepare. The Chinese companies were expected to participate again without the original Mexican partners. Now, Mexico's government has suspended it indefinitely. Mr. Videgaray said the spending cuts wouldn't touch key social-spending programs in areas such poverty alleviation, housing subsidies, education and agriculture, nor money transfers to state governments, but will include an austerity drive across government ministries. Credit: By Anthony Harrup and Santiago Perez
Subject: Interest rates; Housing subsidies; Budgets; Economic growth; Gross Domestic Product--GDP; Local elections; High speed rail; Crude oil prices; Government spending
Location: United States--US Mexico
Classification: 9173: Latin America; 1120: Economic policy & planning
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.14
Publication year: 2015
Publication date: Jan 31, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649397492
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649397492?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Oil Jumps as Number of Drilling Rigs Drops; Sign of Falling Domestic Crude Production Drives Traders to Unwind Bearish Wagers That Profit When the Market Sinks
Author: Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Jan 2015: n/a.
Abstract:
The news of falling domestic production facilities came against a backdrop of otherwise bearish supply-and-demand fundamentals and macroeconomic indicators on Friday, including a continued widening gap between production and consumption for oil from the Organization of the Petroleum Exporting Countries and a on fourth-quarter U.S. economic growth.
Full text: U.S. oil prices surged 8.3% as traders jettisoned bearish bets against the market after data showed a steep drop in the number of rigs drilling for oil in the country--a sign that crude production may be starting to ebb. The news of falling domestic production facilities came against a backdrop of otherwise bearish supply-and-demand fundamentals and macroeconomic indicators on Friday, including a continued widening gap between production and consumption for oil from the Organization of the Petroleum Exporting Countries and a on fourth-quarter U.S. economic growth. Indeed, many analysts believe oil prices have further to fall as global production continues to outpace demand through the first half of this year. Still, for one day the bullish production news drove traders to quickly unwind pre-existing bets that profit when the market falls. Such trades are closed out by buying futures to cover the position, which can feed into a price rally when it is done in large numbers at the same time. The benchmark U.S. oil contract rose $3.71 to settle at $48.24 a barrel on the New York Mercantile Exchange, the largest one-day percentage jump since June 2012. Most of the surge came in the last 45 minutes of trading as investors squared up their books with the end of the month. The global Brent benchmark climbed $3.86, or 7.9%, to $52.99 a barrel on the ICE Futures Europe exchange, its largest percentage gain since April 2009. Oil-field-services company Baker Hughes reported domestic oil-drilling rigs fell by 7% for the week, bringing the count to 1,223, the lowest in three years. "This is another sign that the drop in energy prices is going to impact future production of oil," said Phil Flynn, an account executive at Price Futures Group in Chicago. "People who have been short are starting to have second thoughts about staying short at this level." The rally played into the positioning of traders who have been betting on a bounce in the market. Their numbers have been growing since late November as oil's price collapse has become more pronounced. As of Tuesday, bullish traders outnumbered bearish ones by more than 3-to-1, according to data from commodity regulators. Before Friday's rally, U.S. and global oil benchmarks were down nearly 60% in the past seven months, as surging production from the U.S., Iraq and Libya overwhelmed tepid demand amid slowing global economic growth and as OPEC kept output steady in a bid to defend its market share. Analysts believe the global oil surplus is rising by at least 1.5 million barrels a day. On Thursday, U.S. oil prices traded below $44 a barrel during the market session and settled at a nearly six-year low. On Friday morning, the market received data pointing to a shaky global economic outlook, with fourth-quarter U.S. gross domestic product growing 2.6%, below the 3.2% average estimate of economists surveyed by The Wall Street Journal, and European price data signaling deflation. While the global economy wobbles, OPEC says it produced 30.2 million barrels a day of crude oil in December, up 140,000 barrels from the previous month, despite declining demand for the cartel's output. Saudi Arabia made further reductions to selling prices for Europe and the U.S., and Iraq production is at or near four million barrels a day, according to London oil brokerage PVM Oil Associates Ltd. The market has seen back-to-back supply inventory surges in domestic oil stockpiles in the past two weeks, with production reaching a new 31-year high. The global supply and demand imbalance is keeping the market in a funk. Both major contracts declined for the seventh consecutive month, the longest losing streak since January 2009. Analysts said the selling could resume Monday with the start of the new month. "We see ongoing headwinds for oil prices," Citigroup analyst Tim Evans said in a note. "Optimists may view the price performance in the face of bearish news as an encouraging sign, but we continue to see near-term downside risks." In refined-product markets, gasoline futures gained 6.16 cents, or 4.6%, to settle at $1.4153 a gallon on the Nymex. Diesel futures snapped a 12-week losing streak, the longest on record based on data going back to 1979. The February contract gained 2.4% for the week and rose 6.79 cents, or 4.2%, for the day to end Friday at $1.6863 a gallon. Write to Christian Berthelsen at Credit: By Christian Berthelsen
Subject: Economic growth; Petroleum industry; Supply & demand; Futures; Crude oil prices; Gross Domestic Product--GDP
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 31, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649628945
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia GDP to Shrink 3% in 2015, Economy Minister Says; Low Oil Prices, $115 Billion Capital Outflow Cited; Inflation Forecast Raised to 12%
Author: Razumovskaya, Olga
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]31 Jan 2015: n/a.
Abstract:
The announcement comes a day after the Russian central bank unexpectedly lowered its key interest rate by two percentage points, sending the ruble lower.
Full text: MOSCOW--Russia's economy minister said Saturday that the country's gross domestic product is expected to shrink by 3% in 2015 with oil prices at $50 a barrel and an estimated capital outflow at $115 billion, Russian news agencies reported. The government previously predicted the decrease in GDP at 0.8%. Inflation in 2015 is now forecast to stand at 12%, up from the previous estimate of 7.5%, Alexei Ulyukayev said, Russian news agencies reported. The announcement comes a day after the Russian central bank unexpectedly lowered its key interest rate by two percentage points, sending the ruble lower. Russia was also recently downgraded to "junk" level , below investment-grade, by the credit rating company Standard & Poor's amid the mounting violence in eastern Ukraine. Russia has previously warned that the country's already ailing economy will slip into recession in 2015, tarnished by billions of dollars in capital outflow, falling oil prices and Western sanctions. Saturday Mr. Ulyukayev presented the figures the government will use to revise previous forecasts and account for falling oil prices and the pressure of sanctions over Moscow's annexation of Crimea in 2014 that cut Russia off from Western capital. He also defended the central bank's decision to lower its interest rate Friday, calling it "absolutely justified and practical." The GDP contraction in 2015 would be the first time the Russian economy has shrunk since 2009. The previous forecast of an 0.8% GDP slide was already a much more optimistic forecast than the central bank's outlook, which had estimated that the economy may contract by around 4% this year. The Economy Ministry had said previously it expected the Western sanctions to still be in place by 2016. Write to Olga Razumovskaya at olga.razumovskaya@wsj.com Credit: By Olga Razumovskaya
Subject: Central banks; Interest rates; Sanctions; Economic growth; Gross Domestic Product--GDP
Location: Russia
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Jan 31, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1649754479
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1649754479?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Jumps as Number of Drilling Rigs Drops --- Sign of Falling Domestic Crude Production Drives Traders to Unwind Bearish Wagers That Profit When the Market Sinks
Author: Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]31 Jan 2015: B.5.
Abstract:
The news of falling domestic production facilities came against a backdrop of otherwise bearish supply-and-demand fundamentals and macroeconomic indicators on Friday, including a continued widening gap between production and consumption for oil from the Organization of the Petroleum Exporting Countries and a weaker-than-expected reading on fourth-quarter U.S. economic growth.
Full text: U.S. oil prices surged 8.3% as traders jettisoned bearish bets against the market after data showed a steep drop in the number of rigs drilling for oil in the country -- a sign that crude production may be starting to ebb. The news of falling domestic production facilities came against a backdrop of otherwise bearish supply-and-demand fundamentals and macroeconomic indicators on Friday, including a continued widening gap between production and consumption for oil from the Organization of the Petroleum Exporting Countries and a weaker-than-expected reading on fourth-quarter U.S. economic growth. Indeed, many analysts believe oil prices have further to fall as global production continues to outpace demand through the first half of this year. Still, for one day the bullish production news drove traders to quickly unwind pre-existing bets that profit when the market falls. Such trades are closed out by buying futures to cover the position, which can feed into a price rally when it is done in large numbers at the same time. The benchmark U.S. oil contract rose $3.71 to settle at $48.24 a barrel on the New York Mercantile Exchange, the largest one-day percentage jump since June 2012. Most of the surge came in the last 45 minutes of trading as investors squared up their books with the end of the month. The global Brent benchmark climbed $3.86, or 7.9%, to $52.99 a barrel on the ICE Futures Europe exchange, its largest percentage gain since April 2009. Oil-field-services company Baker Hughes reported domestic oil-drilling rigs fell by 7% for the week, bringing the count to 1,223, the lowest in three years. "This is another sign that the drop in energy prices is going to impact future production of oil," said Phil Flynn, an account executive at Price Futures Group in Chicago. "People who have been short are starting to have second thoughts about staying short at this level." The rally played into the positioning of traders who have been betting on a bounce in the market. Their numbers have been growing since late November as oil's price collapse has become more pronounced. As of Tuesday, bullish traders outnumbered bearish ones by more than 3-to-1, according to data from commodity regulators. Before Friday's rally, U.S. and global oil benchmarks were down nearly 60% in the past seven months, as surging production from the U.S., Iraq and Libya overwhelmed tepid demand amid slowing global economic growth and as OPEC kept output steady in a bid to defend its market share. Analysts believe the global oil surplus is rising by at least 1.5 million barrels a day. On Thursday, U.S. oil prices traded below $44 a barrel during the market session and settled at a nearly six-year low. On Friday morning, the market received data pointing to a shaky global economic outlook, with fourth-quarter U.S. gross domestic product growing 2.6%, below the 3.2% average estimate of economists, and European price data signaling deflation. While the global economy wobbles, OPEC says it produced 30.2 million barrels a day of crude oil in December, up 140,000 barrels from the previous month, despite declining demand for the cartel's output. Saudi Arabia made further reductions to selling prices for Europe and the U.S., and Iraq production is at or near four million barrels a day, according to London oil brokerage PVM Oil Associates Ltd. The market has seen back-to-back supply inventory surges in domestic oil stockpiles in the past two weeks, with production reaching a new 31-year high. The global supply and demand imbalance is keeping the market in a funk. Both major contracts declined for the seventh consecutive month, the longest losing streak since January 2009. "We see ongoing headwinds for oil prices," Citigroup analyst Tim Evans said in a note. "Optimists may view the price performance in the face of bearish news as an encouraging sign, but we continue to see near-term downside risks." Credit: By Christian Berthelsen
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Jan 31, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650165703
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650165703?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Kidnapped Libyan Oil Official Released After Two Weeks; Samir Kamal, Libya's OPEC Governor, Had Been Released to His Family
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]01 Feb 2015: n/a.
Abstract: None available.
Full text: A top Libyan oil official who has been released, a spokesman for the country's state oil company said Sunday. Samir Kamal, the planning director of the National Oil Co. and Libya's governor with the Organization of the Petroleum Exporting Countries, was taken hostage more than two weeks ago in the last sign of the country's escalating chaos. He was released back to his family recently, the spokesman said. No one claimed responsibility for the alleged kidnapping. Mr. Kamal couldn't be reached for comment. A Libyan official said Mr. Kamal wasn't harmed. Mr. Kamal has been the face of Libya's oil policies since resumption of the country's petroleum exports last summer. In recent months, he has called for OPEC to reduce output to boost prices, a move Saudi Arabia has successfully opposed. The country is in the midst of a civil war that has pitted a Tripoli-based Islamist-backed government--of which Mr. Kamal is an employee--against a government based in eastern Libya and recognized as legitimate by the United Nations, European Union and U.S. Criminal gangs--which frequently kidnap for ransom or to settle scores in business disputes--have also become common place. Tripoli is also facing the new threat of terrorism. Last week, in the capital killed nine people, including an American contractor. An offshoot of the Syria-based Islamic State claimed responsibility. Write to Benoît Faucon at Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 1, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650036872
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650036872?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Morgan Stanley Shops Oil-Storage Unit Again
Author: Baer, Justin; Berthelsen, Christian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
[...]people familiar with the matter said, the collapse in oil prices has boosted the value of the unit's storage capacity since Morgan Stanley struck a deal with Rosneft.
Full text: The collapse of the oil market has dragged down prices across the energy sector. One exception is the price Morgan Stanley is seeking for its oil-trading and storage business, which could profit from the recent slide. The New York bank, whose deal to sell the division to Russian energy firm OAO Rosneft for several hundred million dollars was scuttled last month, is seeking a similar price for the business this time around, according to people familiar with the matter. Australian bank Macquarie Group Ltd. and private-equity firm KKR & Co. have emerged as early contenders to acquire the unit, the people said. Oil-storage facilities are among the collection of assets Morgan Stanley is looking to sell as it scales back its commodities business. Prices for storage have been surging amid the steep decline in the commodity itself, as traders hoard crude at currently cheap rates and stash it away for sale when the market eventually recovers. Analysts say the amount of oil stored in such trades has jumped to millions of barrels, and traders who deal in physical oil markets say prices for land storage have been on the rise, roughly doubling since last fall. "Anyone who owns storage potentially has a license to print money," said Stephen Schork, president of oil research consultancy Schork Group in Villanova, Pa. "If you have those assets in this market structure you're in a very advantageous position, and it gives you a lot of leverage in your negotiations." The sale process remains at an early stage, and a deal isn't imminent. Other would-be buyers have also expressed interest in the unit, the people said. Morgan Stanley's agreement with Rosneft--which fell apart amid political tensions between U.S. and Russian authorities--had included Morgan Stanley's oil-storage business, agreements covering the sale, purchase and supply of oil, an inventory of the commodity and various other investments. Morgan Stanley had also planned to transfer its 49% stake in Heidmar Holdings LLC, an operator of oil tankers, as part of the deal. When Morgan Stanley was forced to unwind the Rosneft deal after failing to win the U.S. government's approval, Macquarie emerged quickly as a potential replacement. By Dec. 22, or two days after Morgan Stanley's contract with Rosneft expired, the bank had conveyed its interest, The Wall Street Journal reported last month. Since then, Morgan Stanley named new leadership to run its commodities division after one co-head, Simon Greenshields, quit the firm and another moved to take an advisory role. Wall Street banks, including Morgan Stanley and J.P. Morgan Chase & Co., have moved to shed businesses that store or transport commodities amid pressure from U.S. regulators and politicians. Concerned the assets may pose dangers to the markets or the banks themselves, the Federal Reserve is weighing whether to restrict these activities. Last year, a Senate subcommittee published a report critical of Wall Street's biggest commodities traders, including Morgan Stanley. Macquarie is a commodity-focused bank with offices in the U.S. and 27 other countries. Its energy-trading group operates from cities including Houston, New York and Singapore, and it already has a footprint in physical markets for oil, natural gas, power and coal. KKR has shown interest in commodity assets before. In 2013, it was part of a joint bid for the physical commodity trading assets being sold by J.P. Morgan. Last month, one of its subsidiaries announced a plan to launch a joint venture that will pump capital into the commodities industry. J.P. Morgan ultimately reached a deal to sell the assets to Mercuria Energy Group Ltd. Morgan Stanley executives have stuck with plans to shed the division despite the Rosneft deal's collapse. "We remain committed to selling our oil-merchanting business," James Gorman, the firm's chairman and chief executive, said during a Jan. 20 conference call with analysts. Indeed, the sale remains on the list of actions Morgan Stanley said will help lift returns to at least 10%, a milestone in Mr. Gorman's turnaround plan. Last year, the firm's board included the deal among the "strategic objectives" used to evaluate Mr. Gorman's performance and set his annual pay. On the call with analysts, Morgan Stanley finance chief Ruth Porat said she didn't believe the sharp drop in oil prices--which contributed to weaker fourth-quarter results by the firm's commodities-trading arm--would affect the sale of the physical business. In fact, people familiar with the matter said, the collapse in oil prices has boosted the value of the unit's storage capacity since Morgan Stanley struck a deal with Rosneft. The same storage leases that were producing losses for the firm when prices were high have turned profitable now that more traders are looking to store oil until the market recovers. "We have excess storage capacity, so that actually sets the business up well," Ms. Porat said. Write to Justin Baer at and Christian Berthelsen at Credit: By Justin Baer and Christian Berthelsen
Subject: Banking; Prices; Energy industry; Investment bankers; Petroleum industry
Location: United States--US
Company / organization: Name: Macquarie Group; NAICS: 523110; Name: OAO Rosneft; NAICS: 324110; Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650038296
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650038296?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
ETFs and Other Ways Investors Can Bet on the Drop in Oil Prices; Options Include Shorting Canadian Banks and Currency, or Investing in Inverse ETFs
Author: Zuckerman, Gregory
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, urges caution about investments with exposure to Russian debt, such as the iShares JPMorgan USD Emerging Market Bond ETF (EMB) and PowerShares Fundamental Emerging Market Lcl Debt ETF (PFEM) since Russia's economy is very dependent on energy prices.\n
Full text: Oil prices are tumbling and energy stocks have fallen. Are there exchange-traded funds or exchange-traded notes that could do well or help hedge an energy position if this environment persists? And which are the most liable to lose money besides the obvious funds that track the industry? The rising supply of oil from U.S. shale fields has helped create a global glut, even as world-wide demand remains tepid. That, along with Saudi Arabia's recent decision to keep its production apace, has helped send oil prices tumbling. Most analysts expect the pressure on prices to continue, raising questions about how investors can shift their portfolios to take advantage. Jared Dillian, a former trader who now publishes a financial newsletter, says one way to play the energy downturn is by betting against the Canadian currency and investments. The energy industry is one of Canada's most important. Mr. Dillian has shorted, or bet against, Canadian banks such as Canadian Imperial Bank of Commerce and Toronto-Dominion Bank, which have U.S.-listed shares. These banks remain at expensive levels and could see an earnings downturn and slower loan growth as the Canadian energy business pulls back, he says. He also has shorted the Canadian dollar, which he sees falling further. Keep in mind that trading currencies can be dangerous and too often investors use dangerous leverage with these moves. One way to profit from a fall in the Canadian dollar is by shorting an ETF that tracks the currency, such as the CurrencyShares Canadian Dollar ETF (FXC). For those eager to profit from further weakness in crude prices, or just protect a portfolio laden with energy stocks, Matthew Tuttle, president of Tuttle Tactical Management LLC in Stamford, Conn., recommends ProShares Short Oil & Gas (DDG), an ETF that aims to achieve a return equal to the inverse of an oil-and-gas index. There's also the ProShares UltraShort Oil & Gas (DUG), which aims for a return that is twice the inverse of the energy index. Investors interested in wagering against the commodity itself, rather than energy shares, could choose the ProShares UltraShort Bloomberg Crude Oil (SCO), which aims for returns that are twice the inverse of crude prices, Mr. Tuttle says. The fund is up more than 140% so far this year. ProShares UltraShort Bloomberg Natural Gas (KOLD) is a way to bet against natural-gas prices, which also face pressure. Just keep in mind that leveraged ETFs are better used as short-term investment vehicles since they tend to have a tough time tracking an index over time. Scott Miller Jr., a managing partner at Blue Bell Private Wealth Management in Blue Bell, Pa., suggests looking for companies that will benefit from lower energy prices, like transport firms, airlines and chemicals. He's a fan of iShares Transportation Average (IYT) and SPDR S&P Transportation (XTN), ETFs that track transportation shares. "Countries that heavily rely on imported energy may be another way to play falling oil and energy prices because trade balances and domestic growth prospects will improve," Mr. Miller says. "The closed-end fund CAF [Morgan Stanley China A Shares] is a good way to invest in China, a country heavily reliant on foreign energy." Other possibilities include WisdomTree India Earnings (EPI), iShares MSCI Japan (EWJ) and iShares MSCI Taiwan (EWT). Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, urges caution about investments with exposure to Russian debt, such as the iShares JPMorgan USD Emerging Market Bond ETF (EMB) and PowerShares Fundamental Emerging Market Lcl Debt ETF (PFEM) since Russia's economy is very dependent on energy prices. But he says investors have been too bearish on master limited partnerships that focus on providing pipelines for the energy industry, such as Enbridge Energy Partners (EEP), which now carries of yield of more than 5.5% and has been growing its distribution since 2007. Mr. Zuckerman is a reporter for The Wall Street Journal in New York and author of "The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters." Email: greg.zuckerman@wsj.com. Credit: By Gregory Zuckerman
Subject: Petroleum industry; American dollar; Canadian dollar; Stock exchanges; Banking; Profits; Natural gas; Currency; Emerging markets
Location: United States--US Saudi Arabia
Company / organization: Name: Canadian Imperial Bank of Commerce; NAICS: 522110; Name: Toronto-Dominion Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650047478
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650047478?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Markets Rally, Despite Strikes, Data; Potential Supply Cuts Outweigh Concerns About Labor Action, China Manufacturing
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Workers represented by the United Steelworkers Union at U.S. refineries that produce nearly 10% of the nation's gasoline, diesel and other fuels went on strike Sunday after contract negotiations broke down over salaries and safety concerns.
Full text: Oil closed at its highest prices in nearly a month as traders kept focused on potential supply cuts and shrugged off news of U.S. refinery strikes and sluggish Chinese manufacturing, traders and analysts said. Light, sweet crude for March delivery, the U.S. benchmark, settled up $1.33, or 2.8%, at $49.57 a barrel on The New York Mercantile Exchange. The front-month March contract for Brent crude settled up $1.76, or 3.3%, at $54.75 a barrel on London's ICE Futures exchange. Both benchmarks hit their highest price since the first days of January, extending winning streaks to three days. Brent's percentage gains have been larger for that three-day span than any other since 2009. WTI has had its largest three-day percentage gain since 2012. Several analysts still believe that crude could keep falling. But after months of large, steady losses, they are debating whether falling rig counts and drilling budget cuts are causing a rally that can stabilize crude prices. "The easy part of trading the (bearish) side of this complex is over," Jim Ritterbusch, president of energy-advisory firm Ritterbusch & Associates, said in a note to clients. The rally accelerated on Friday as oil-field-services company Baker Hughes reported domestic oil-drilling rigs fell by 7% for the week, bringing the count to 1,223, the lowest in three years. Traders were also worried about new threats to oil production from the conflict in Iraq, analysts said. The data and earnings reports from the past week are showing that drilling cutbacks are coming in larger and quicker than expected, the energy investment bank Tudor, Pickering, Holt & Co. said Monday morning. It seems "increasingly plausible" that U.S. oil rigs could be down more than 40% by the second half of this year, with production shrinking from 2015 to 2016 by as much as much 600,000 barrels a day, the bank said. Gordon Kwan, head of oil research at Nomura, told clients the cutbacks should support a recovery in oil prices by the end of the year. A 15% to 20% drop in U.S. production would eliminate global oversupply of as much as 2 million barrels a day, Mr. Kwan said. "The slowdown is coming. We just don't know yet when," said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. "But I do think, there's probably still more of a weakness (in near-term futures) before we start to see a little more of that slowdown." Crude prices did initially fall Monday on news of refinery strikes. It fueled concerns that any reduction in refining capacity could cut consumption and allow supplies to build even more after inventories touched record highs in recent weeks. Workers represented by the United Steelworkers Union at U.S. refineries that produce nearly 10% of the nation's gasoline, diesel and other fuels went on strike Sunday after contract negotiations broke down over salaries and safety concerns. The union said the strike affects 3,800 workers. Oil refiners like Royal Dutch Shell PLC., Tesoro Corp., Marathon Petroleum Corp. and LyondellBasell Industries said they would keep plants operating under contingency plans. Gasoline prices rose on the news. March reformulated gasoline blendstock, or RBOB, settled up 6.58 cents, or 4.5%, to $1.5446 a gallon. March diesel settled up 5.67 cents, or 3.3%, at $1.7575 a gallon. There are concerns about slowdown in the world's second-largest oil consumer. Data showing China's manufacturing sector contracted in January also added to early losses. The HSBC China manufacturing purchasing managers index inched up to 49.7 for January from 49.6 in December, HSBC said Monday. The data came a day after China's official PMI fell to 49.8 for January, the first reading below 50 since 2012. A reading below 50 indicates a contraction. "While today's rally is a technical follow-through from Friday, fundamentals haven't really changed and macro data is still not supportive for oil," said Harry Tchilinguirian, head of commodity strategy at BNP Paribas Eric Yep, Richard Silk and Alison Sider contributed to this article. Write to Georgi Kantchev at Credit: By Timothy Puko And Georgi Kantchev
Subject: Manufacturing; Petroleum industry; Statistical data; Contract negotiations; Purchasing managers index; Crude oil prices; Petroleum production; Gasoline prices; Strikes; Petroleum refineries
Location: United States--US
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Tudor Pickering Holt & Co LLC; NAICS: 523110; Name: New York Mercantile Exchange; NAICS: 523210; Name: United Steelworkers of America; NAICS: 813930
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United S tates, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650066430
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650066430?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Wealth Management (A Special Report) --- Alternative Investing: ETFs That Let You Play the Downturn in Oil Prices and Energy Stocks
Author: Zuckerman, Gregory
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2015: R.7.
Abstract:
Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, urges caution about investments with exposure to Russian debt, such as the iShares JPMorgan USD Emerging Market Bond ETF (EMB) and PowerShares Fundamental Emerging Market Lcl Debt ETF (PFEM) since Russia's economy is very dependent on energy prices.\n
Full text: Oil prices are tumbling and energy stocks have fallen. Are there exchange-traded funds or exchange-traded notes that could do well or help hedge an energy position if this environment persists? And which are the most liable to lose money besides the obvious funds that track the industry? The rising supply of oil from U.S. shale fields has helped create a global glut, even as world-wide demand remains tepid. That, along with Saudi Arabia's recent decision to keep its production apace, has helped send oil prices tumbling. Most analysts expect the pressure on prices to continue, raising questions about how investors can shift their portfolios to take advantage. Jared Dillian, a former trader who now publishes a financial newsletter, says one way to play the energy downturn is by betting against the Canadian currency and investments. The energy industry is one of Canada's most important. Mr. Dillian has shorted, or bet against, Canadian banks such as Canadian Imperial Bank of Commerce and Toronto-Dominion Bank, which have U.S.-listed shares. These banks remain at expensive levels and could see an earnings downturn and slower loan growth as the Canadian energy business pulls back, he says. He also has shorted the Canadian dollar, which he sees falling further. Keep in mind that trading currencies can be dangerous and too often investors use dangerous leverage with these moves. One way to profit from a fall in the Canadian dollar is by shorting an ETF that tracks the currency, such as the CurrencyShares Canadian Dollar ETF (FXC). For those eager to profit from further weakness in crude prices, or just protect a portfolio laden with energy stocks, Matthew Tuttle, president of Tuttle Tactical Management LLC in Stamford, Conn., recommends ProShares Short Oil & Gas (DDG), an ETF that aims to achieve a return equal to the inverse of an oil-and-gas index. There's also the ProShares UltraShort Oil & Gas (DUG), which aims for a return that is twice the inverse of the energy index. Investors interested in wagering against the commodity itself, rather than energy shares, could choose the ProShares UltraShort Bloomberg Crude Oil (SCO), which aims for returns that are twice the inverse of crude prices, Mr. Tuttle says. The fund is up more than 140% so far this year. ProShares UltraShort Bloomberg Natural Gas (KOLD) is a way to bet against natural-gas prices, which also face pressure. Just keep in mind that leveraged ETFs are better used as short-term investment vehicles since they tend to have a tough time tracking an index over time. Scott Miller Jr., a managing partner at Blue Bell Private Wealth Management in Blue Bell, Pa., suggests looking for companies that will benefit from lower energy prices, like transport firms, airlines and chemicals. He's a fan of iShares Transportation Average (IYT) and SPDR S&P Transportation (XTN), ETFs that track transportation shares. "Countries that heavily rely on imported energy may be another way to play falling oil and energy prices because trade balances and domestic growth prospects will improve," Mr. Miller says. "The closed-end fund CAF [Morgan Stanley China A Shares] is a good way to invest in China, a country heavily reliant on foreign energy." Other possibilities include WisdomTree India Earnings (EPI), iShares MSCI Japan (EWJ) and iShares MSCI Taiwan (EWT). Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, urges caution about investments with exposure to Russian debt, such as the iShares JPMorgan USD Emerging Market Bond ETF (EMB) and PowerShares Fundamental Emerging Market Lcl Debt ETF (PFEM) since Russia's economy is very dependent on energy prices. But he says investors have been too bearish on master limited partnerships that focus on providing pipelines for the energy industry, such as Enbridge Energy Partners (EEP), which now carries of yield of more than 5.5% and has been growing its distribution since 2007. --- Mr. Zuckerman is a reporter for The Wall Street Journal in New York and author of "The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters." Email: greg.zuckerman@wsj.com. Credit: By Gregory Zuckerman
Subject: Petroleum industry; American dollar; Canadian dollar; Stock exchanges; Banking; Profits; Natural gas; Currency; Emerging markets
Location: United States--US Saudi Arabia
Company / organization: Name: Canadian Imperial Bank of Commerce; NAICS: 522110; Name: Toronto-Dominion Bank; NAICS: 522110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.7
Publication year: 2015
Publication date: Feb 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650074094
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650074094?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Brazil Oil Giant Spawns Colossal Mess --- Fallout of Alleged Graft at Petrobras Idles Thousands, Risks Bank Losses, and Sparks Political, Economic Headaches
Author: Dickerson, Marla; Jelmayer, Rogerio
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2015: A.9.
Abstract:
Prosecutors say the firms colluded to drive up prices for the work, kicking back a portion to high-ranking Petrobras employees and politicians, including members of Ms. Rousseff's ruling Workers' Party. Since the scandal exploded in March, prosecutors have charged 39 people with corruption, money-laundering and organized crime.
Full text: SAO PAULO -- A corruption scandal at state-controlled Petroleo Brasileiro SA has created political headaches for President Dilma Rousseff. Now it's also threatening Brazil's economy. What began as an investigation of money launderers operating out of a gas station has reached the executive suites of Petrobras and the nation's best-known construction firms, which prosecutors accuse of ripping off the oil giant. The fallout is battering some of the most important business sectors. Petrobras, Brazil's largest company and a major source of capital investment, is in chaos. Scrambling to calculate the extent of the massive fraud, it has canceled planned projects and delayed payments to accused contractors, setting off a chain of defaults and credit downgrades. Thousands of laborers have been put out of work building oil refineries, tankers and drilling platforms. Banks that lent money to firms tangled in the legal dragnet are cutting off credit and girding for potential losses. The turmoil is a liability for Ms. Rousseff's new economic team and it is a major stumbling block for Brazil's economy, which is already struggling with slow growth, widening deficits and an epic drought. A recent survey of economists projects GDP will grow just 0.13% this year, but even that may be optimistic. "The contagion problems at Petrobras may not have stopped," said Carlos Kawall, chief economist at Banco Safra and a former treasury secretary. "Do not rule out a recession in Brazil in 2015." Dubbed "Operation Car Wash" by investigators, the federal investigation has exposed the murky world of public contracting, long a source of waste and abuse in Latin America. Authorities allege that some of the largest construction companies paid bribes to secure $23 billion in contracts with Petrobras in recent years. Prosecutors say the firms colluded to drive up prices for the work, kicking back a portion to high-ranking Petrobras employees and politicians, including members of Ms. Rousseff's ruling Workers' Party. Since the scandal exploded in March, prosecutors have charged 39 people with corruption, money-laundering and organized crime. They include two top Petrobras officials and 27 construction industry executives from big firms including Camargo Correa S.A., Queiroz Galvao S.A. and OAS S.A. Among them, 15 are jailed awaiting trial and one is under house arrest. Petrobras says it is a victim of the alleged scam and that it is cooperating with authorities. Ms. Rousseff hasn't been implicated and Workers' Party officials have repeatedly denied involvement. Some of the companies and attorneys of the people involved have denied wrongdoing, while other have said they are cooperating with investigators. The political blowback may be just beginning. Prosecutors have signaled a new round of charges is coming soon, this time against politicians and government officials. But Brazil's economy is already paying the price. On Friday, Eliane Cantanhede, a columnist with the daily O Estado De S. Paulo, summarized the company's pivotal role in the economy. "Petrobras is at the center of a gear that moves hundreds of companies, billions of reais and millions of people," she said. "If it chokes, the machines stops." The pain has spread to the construction sector. In December, Petrobras barred 23 builders ensnared in Operation Car Wash from bidding on new work with the company while the probe continues. The oil giant has also halted payments to suspects in the probe and scuttled some contracts outright. Fears are growing that the paralysis could slam the brakes not only on GDP growth, but on Brazil's ambitions of becoming a Top 5 oil producer by 2020. Petrobras' average annual output increased 5.3% last year, thanks largely to its investments in deep-water drilling. Sidelining all the accused construction firms working on infrastructure critical to the offshore push would slow Petrobras' efforts considerably, experts say. One solution being floated in Brasilia is for the government to strike leniency deals with the builders, allowing them to continue working with Petrobras in exchange for admitting guilt. "We should punish people, not destroy companies," Ms. Rousseff said this past week following a closed-door meeting with her cabinet. Credit: By Marla Dickerson and Rogerio Jelmayer
Subject: Petroleum industry; Construction; Recessions; Criminal investigations; Gross Domestic Product--GDP; Corruption
Location: Brazil
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: Banco Safra; NAICS: 522110
Classification: 9173: Latin America; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2015
Publication date: Feb 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650074133
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650074133?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Morgan Stanley Shops Oil-Storage Unit Again
Author: Baer, Justin; Berthelsen, Christian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]02 Feb 2015: C.1. [Duplicate]
Abstract:
[...]people familiar with the matter said, the collapse in oil prices has boosted the value of the unit's storage capacity since Morgan Stanley struck a deal with Rosneft.
Full text: The collapse of the oil market has dragged down prices across the energy sector. One exception is the price Morgan Stanley is seeking for its oil-trading and storage business, which could profit from the recent slide. The New York bank, whose deal to sell the division to Russian energy firm OAO Rosneft for several hundred million dollars was scuttled last month, is seeking a similar price for the business this time around, according to people familiar with the matter. Australian bank Macquarie Group Ltd. and private-equity firm KKR & Co. have emerged as early contenders to acquire the unit, the people said. Oil-storage facilities are among the collection of assets Morgan Stanley is looking to sell as it scales back its commodities business. Prices for storage have been surging amid the steep decline in the commodity itself, as traders hoard crude at currently cheap rates and stash it away for sale when the market eventually recovers. Analysts say the amount of oil stored in such trades has jumped to millions of barrels, and traders who deal in physical oil markets say prices for land storage have been on the rise, roughly doubling since last fall. "Anyone who owns storage potentially has a license to print money," said Stephen Schork, president of oil research consultancy Schork Group in Villanova, Pa. "If you have those assets in this market structure you're in a very advantageous position, and it gives you a lot of leverage in your negotiations." The sale process remains at an early stage, and a deal isn't imminent. Other would-be buyers have also expressed interest in the unit, the people said. Morgan Stanley's agreement with Rosneft -- which fell apart amid political tensions between U.S. and Russian authorities -- had included Morgan Stanley's oil-storage business, agreements covering the sale, purchase and supply of oil, an inventory of the commodity and various other investments. Morgan Stanley had also planned to transfer its 49% stake in Heidmar Holdings LLC, an operator of oil tankers, as part of the deal. When Morgan Stanley was forced to unwind the Rosneft deal after failing to win the U.S. government's approval, Macquarie emerged quickly as a potential replacement. By Dec. 22, or two days after Morgan Stanley's contract with Rosneft expired, the bank had conveyed its interest, The Wall Street Journal reported last month. Since then, Morgan Stanley named new leadership to run its commodities division after one co-head, Simon Greenshields, quit the firm and another moved to take an advisory role. Wall Street banks, including Morgan Stanley and J.P. Morgan Chase & Co., have moved to shed businesses that store or transport commodities amid pressure from U.S. regulators and politicians. Concerned the assets may pose dangers to the markets or the banks themselves, the Federal Reserve is weighing whether to restrict these activities. Last year, a Senate subcommittee published a report critical of Wall Street's biggest commodities traders, including Morgan Stanley. Macquarie is a commodity-focused bank with offices in the U.S. and 27 other countries. Its energy-trading group operates from cities including Houston, New York and Singapore, and it already has a footprint in physical markets for oil, natural gas, power and coal. KKR has shown interest in commodity assets before. In 2013, it was part of a joint bid for the physical commodity trading assets being sold by J.P. Morgan. Last month, one of its subsidiaries announced a plan to launch a joint venture that will pump capital into the commodities industry. J.P. Morgan ultimately reached a deal to sell the assets to Mercuria Energy Group Ltd. Morgan Stanley executives have stuck with plans to shed the division despite the Rosneft deal's collapse. "We remain committed to selling our oil-merchanting business," James Gorman, the firm's chairman and chief executive, said during a Jan. 20 conference call with analysts. Indeed, the sale remains on the list of actions Morgan Stanley said will help lift returns to at least 10%, a milestone in Mr. Gorman's turnaround plan. Last year, the firm's board included the deal among the "strategic objectives" used to evaluate Mr. Gorman's performance and set his annual pay. On the call with analysts, Morgan Stanley finance chief Ruth Porat said she didn't believe the sharp drop in oil prices -- which contributed to weaker fourth-quarter results by the firm's commodities-trading arm -- would affect the sale of the physical business. In fact, people familiar with the matter said, the collapse in oil prices has boosted the value of the unit's storage capacity since Morgan Stanley struck a deal with Rosneft. The same storage leases that were producing losses for the firm when prices were high have turned profitable now that more traders are looking to store oil until the market recovers. "We have excess storage capacity, so that actually sets the business up well," Ms. Porat said. Credit: By Justin Baer and Christian Berthelsen
Subject: Banking; Prices; Energy industry; Investment bankers; Petroleum industry; Divestiture
Location: United States--US
Company / organization: Name: OAO Rosneft; NAICS: 324110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Classification: 9190: United States; 2330: Acquisitions & mergers
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 2, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650075362
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650075362?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Rally; Energy Sector Climbs as Oil Prices Push Higher
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
The wide swings mark a resurgence in volatility for stocks, as investors grapple with slowing economic growth around the world, swings in the price of oil and the prospect of U.S. interest-rate increases later in the year. Exxon reported fourth-quarter earnings that topped expectations and released plans to cut its share buyback program amid the monthslong tumble in oil prices.
Full text: Stocks climbed on Monday, bouncing back from their January slump, as a rally in oil prices propelled energy shares to strong gains. The Dow Jones Industrial Average rose 196.09 points, or 1.1%, to 17361.04, closing out a choppy session for U.S. stocks in which major indexes swung sharply between gains and losses. The S&P 500 index advanced 25.86 points, or 1.3%, to 2020.85. The Nasdaq Composite Index gained 41.45 points, or 0.9%, to 4676.69. The wide swings mark a resurgence in volatility for stocks, as investors grapple with slowing economic growth around the world, swings in the price of oil and the prospect of U.S. interest-rate increases later in the year. Traders pointed to a surge of buying, unrelated to news of the day, late in the session. "We were due for a snapback rally" following last week's declines, said Michael Antonelli, sales trader at Robert W. Baird. Providing a lift was an afternoon rally in the oil market. Oil prices have risen nearly 12% in the last three sessions, helping propel gains in blue-chip energy stocks. Crude-oil futures rose 2.8% Monday to $49.57 a barrel , after jumping 8.3% Friday. The S&P 500 Energy index led major sectors, gaining 3%. Chevron Corp. gained 3.4% and Exxon Mobil Corp. advanced 2.5%. Exxon reported fourth-quarter earnings that topped expectations and released plans to cut its share buyback program amid the monthslong tumble in oil prices. Prompting the initial bout of selling was a report from the Institute for Supply Management showing decelerating manufacturing activity last month. The report was the latest data point to feed investors' concerns about the health of the U.S. economy. On Friday, the Commerce Department said the U.S. economy grew 2.6% in the fourth quarter, missing Wall Street expectations and marking a slowdown from earlier in 2014. Last week also showed a sharp slowdown in durable goods orders for December. "People are getting nervous about slowing growth," said Joe Saluzzi, partner at brokerage firm Themis Trading. "Most people would say we're still better than the rest, and we're still reporting decent earnings. But are we getting dragged down? That's the fear, and if we are, then we have some issues." Stocks remain near record highs reached late last year, and many investors say that last year's gain of 11% in the S&P 500 leaves valuations for many shares at above-average levels. Last month, the Dow lost 3.7% and the S&P 500 shed 3.1%, with both indexes showing the worst monthly loss in a year. Many investors say they expect data due later in the week to offer further insight on U.S. economic health, including Friday's closely watched jobs report for January. Jerry Braakman, chief investment officer at First American Trust, which manages about $1.1 billion, said the domestic economy is on a sound footing, though he remains concerned over the extent to which slowing growth elsewhere can spread to the U.S. "Part of the underlying concerns are with valuations, but also how insulated we are from all the issues overseas," said Mr. Braakman. "We've seen real improvements in unemployment, but we haven't necessarily seen that spread throughout all parts of the economy." Other data Monday painted a mixed picture for investors. Consumer spending fell 0.3% in December, the Commerce Department said. Personal income rose 0.3%. The Federal Reserve's preferred inflation measure, the price index for personal consumption expenditures, fell 0.2% from November. Economists surveyed by The Wall Street Journal expect Friday's data to show 234,000 new jobs were added last month, while the unemployment rate is expected to remain at 5.6%. Many investors say the backdrop for stocks remains positive. Mr. Braakman said he is betting on gains in stocks this year, though he expects more bouts of volatility. In addition to low interest rates, the steep fall in oil prices should give a boost to consumer spending and benefit the broader economy, he said. Among recent bets, Mr. Braakman said he has bought shares of Boeing Co., noting the fall in oil prices will benefit airlines and spur spending on new aircraft. "With energy, we've been looking at who is vulnerable and who will benefit," he said. A rally in European stocks helped boost sentiment in the U.S., traders said. "You got a little sigh of relief" as Europe's exchanges closed with a gain, said Bill Nichols, head of U.S. equities at Cantor Fitzgerald. Germany's DAX index closed 1.3% higher to a record high. The Stoxx Europe 600 index edged up 0.1%, reversing an early loss. The yield on the 10-year Treasury note fell to 1.669% as prices rose. In other corporate news, Mylan Inc. has agreed to buy certain women's health-care businesses from India's Famy Care Ltd. for $750 million in cash. Mylan shares rose 0.1%. Apple Inc. shares gained 1.3%. The iPhone maker boosted the size of its bond deal to $6.5 billion Monday . Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Petroleum industry; Prices; Stocks
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Institute for Supply Management; NAICS: 813910; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650152494
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650152494?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon's Profit Drops 21% as Production Declines; Quarterly Cash Flow Reaches Lowest Level Since 2009
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Among the data that made traders more bullish was a report that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day.
Full text: Exxon Mobil Corp., the biggest and richest U.S. oil company, is moving to conserve cash in a sign that it doesn't expect a quick rebound in crude prices. Despite generating $87.3 billion in revenue last year, Exxon's cash flow in the last three months of 2014 fell to its lowest level since recession-wracked 2009. On Monday, the company said it would cut share buybacks by $1 billion this quarter, saving about $2 billion as it searches for ways to cut costs. "This organization has a very strong culture of driving down our cost structure," Jeff Woodbury, Exxon's head of investor relations, said in a call with analysts. The Irving, Texas, company isn't assuming that oil and gas prices will increase, he added. One by one, the world's biggest oil and gas producers are posting weaker profits as oil prices have collapsed to less than $55 a barrel from triple digits over the summer. Last week, ConocoPhillips said it would cut spending on new oil and gas projects by 15%, on top of a 20% cut disclosed in December. Occidental Petroleum Corp. said it would chop capital spending by a third this year. Royal Dutch Shell PLC has said it would spend $15 billion less than planned over the next three years. And Chevron Corp. plans to cut spending by $5 billion from 2014 and suspend its share-buyback program. Exxon said it operated more drilling rigs in the U.S. in the fourth quarter than it had earlier in the year, and its retrenchment is less drastic than some of its rivals. But given the company's focus on the long-term, its efforts to retain cash are a sign of just how cautious energy executives have become. The company won't report its capital spending plans until March. The big, diversified energy companies "were built for conditions like these," said Doug Terreson, head of energy research at Evercore ISI. But even giants "want to try and preserve cash and prepare for the downturn in case it's extended." These companies, which generate billions of dollars in cash flow a year, are among the best insulated in their industry against the bite of falling oil prices. They have strong balance sheets and own refining and chemicals businesses that can benefit from cheap crude, which they convert to plastics, gasoline and other fuels. Smaller companies, whose shale-drilling has sparked a resurgence in U.S. oil and gas output, are more vulnerable to the price collapse; most of them will report earnings later this month. There are signs that crude prices might be stabilizing. The U.S. benchmark for oil prices rose to $49.57 on Monday, continuing a recent recovery since prices dipped below $45 a barrel last week. The price of Brent crude, the global benchmark, also rose to $54.75, up 3.3%. Exxon's shares rose 2.5% to $89.58 in 4 p.m. New York on Monday trading amid gains in the broader market. Among the data that made traders more bullish was a report that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day. Still, few analysts expect U.S. oil production to slow until the second half of the year at the earliest, and crude prices remain near the lowest level in six years. The oil-price slump has arrived at a vulnerable moment for big energy companies. Natural gas prices have remained low since drillers unleashed a flood of gas from shale-rock formations beginning around 2008, keeping a lid on profits of big producers like Exxon, which bought XTO Energy, a shale-gas pioneer, for $25 billion in 2010. Bolstered by oil hovering around $100 a barrel for the last three years, Exxon and its peers have invested at historic levels to tap massive energy deposits in some of the most remote reaches on earth, from Australia's offshore gas fields to Canada's oil sands. At the same time, they have steadily boosted dividend payments that long been their hallmark, and added share buybacks as a further enticement to investors. Such aggressive spending, combined with low interest rates, has led energy giants to pile on billions of dollars in debt. Now, crude's fall is taking a toll on the most fortified balance sheets in the oil patch, with some analysts questioning how much new debt Exxon and Chevron can take on and still maintain their superior credit ratings. The companies have indicated they can borrow much more without jeopardizing their credit ratings. Exxon borrowed $7.3 billion in the quarter, bringing total debt to $29.1 billion, more than double the level in early 2013. Cash on hand fell to $4.7 billion by the end of last year from $5 billion at the beginning of the year. Exxon's $6.6 billion profit for the fourth quarter of 2014 was 21% less than a year ago, contributing to its weak cash flow. While still more than any U.S. rival, Exxon's cash flow for the quarter was about $7 billion short of covering its costs for tapping oil and gas, paying dividends and repurchasing shares. In all, Exxon reported a per-share profit of $1.56, down from $1.91 a year earlier. Revenue slipped to $87.3 billion from $110.9 billion. Wall Street analysts polled by Thomson Reuters expected the company to report per-share profit of $1.34 on revenue of $87.6 billion. Exxon is expected to release its capital spending plans for 2015 next month; a year ago, it forecast spending less than $37 billion this year. Corrections & Amplifications Exxon Mobil's refining and marketing earnings fell by 46% in the fourth quarter. An earlier version of this article misstated the percentage in the sixth paragraph. Write to Daniel Gilbert at Credit: By Daniel Gilbert
Subject: Petroleum industry; Cash flow; Corporate profits; Capital expenditures; Crude oil prices; Petroleum production; Natural gas prices
Location: United States--US
People: Tillerson, Rex W
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Occidental Petroleum Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650152712
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650152712?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Imperial Oil Profit Falls 36%; Exxon Mobil's Canadian Unit Hurt by Lower Oil Prices and Volumes
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Imperial Oil Ltd., the Canadian subsidiary of Exxon Mobil Corp., posted a 36% decline in fourth-quarter earnings on Monday, hurt by lower oil prices and volumes.
Full text: Imperial Oil Ltd., the Canadian subsidiary of Exxon Mobil Corp., posted a 36% decline in fourth-quarter earnings on Monday, hurt by lower oil prices and volumes. Imperial Oil said the continued slump in oil prices reduced earnings by about 100 million Canadian dollars ($78.7 million), while lower volumes shaved about C$50 million from profits. The Calgary, Alberta-based integrated energy company said its quarterly profit fell to C$671 million, or 79 Canadian cents a share, from C$1.06 billion, or C$1.24 a year earlier. Earnings came in ahead of the 72 Canadian cents a share analysts polled by Thomson Reuters were expecting. Revenue of C$8.03 billion was down from C$8.36 billion a year earlier. Lower commodity prices also took a bite out of parent Exxon's earnings. It reported earlier Monday and unveiled plans to slash its share buyback program. Imperial Oil said production dipped to 315,000 gross-equivalent barrels a day from 329,000 barrels a day a year earlier. Excluding the sale of conventional assets earlier in the year, it said production was up 4,000 barrels. The company said its average realizations from sales of synthetic crude oil fell about 10% to C$82.04 per barrel, due to a lower West Texas Intermediate crude benchmark price, which was down about 25%, partly offset by a weaker Canadian dollar. Imperial's capital and exploration spending edged up 1% to C$1.59 billion in the latest quarter. It said its near-term investment plans remain "largely unchanged," but added it will continue to monitor and respond to market conditions in light of the continued slump in crude oil prices. Canada's largest oil and gas producers have been taking steps to cope with a more than 50% drop in crude oil prices since last summer. Many have scaled back capital spending and cut their dividends. Imperial Oil maintained its quarterly dividend at 13 Canadian cents a share. It said its spending in the quarter was targeted largely at its Kearl oil sands mine expansion in northern Alberta, which it said continues ahead of schedule. Start-up is now targeted for the third quarter, ahead of the original year-end target, it said. Kearl, which is expected to produce up to 345,000 barrels a day at full capacity, is undergoing an C$8.9 billion expansion. Write to Judy McKinnon at Credit: By Judy McKinnon
Subject: Crude oil; Crude oil prices; Petroleum industry; Energy economics; Canadian dollar; Capital expenditures
Location: Calgary Alberta Canada
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Imperial Oil Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650158875
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650158875?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gold Ends Slightly Lower; Traders Weigh Higher Oil Prices, Fed Rate Increases
Author: Shumsky, Tatyana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
NEW YORK--Gold futures closed slightly lower Monday after a volatile session that saw investors weigh higher oil prices against signs of weakness in the U.S. economic recovery.
Full text: NEW YORK--Gold futures closed slightly lower Monday after a volatile session that saw investors weigh higher oil prices against signs of weakness in the U.S. economic recovery. Gold for April delivery, the most actively traded contract, closed 0.2%, or $2.30, lower at $1,276.90 a troy ounce on the Comex division of the New York Mercantile Exchange. Investors had been buying gold in recent sessions after crude-oil prices tumbled and spurred concerns about how lower energy costs would affect global markets. Some traders view gold as a haven from political and economic turbulence, believing it will keep its value better than other assets. But the U.S. benchmark rose as much as 4.8% on Monday, sapping investor appetite for haven assets. "The rally in oil took some of the pressure off the reasons to buy gold," said Ira Epstein, a broker with the Linn Group in Chicago. Gold reversed its losses in afternoon trading, after sluggish U.S. manufacturing data reanimated hopes that the Federal Reserve would delay raising interest rates. U.S. factory activity, as measured by the Institute for Supply Management's manufacturing purchasing managers index, expanded to 53.5 in January, a slowdown from 55.1 in December and below forecasts of 54.3. While the PMI isn't the only gauge watched by the Federal Reserve, some gold traders bet that the U.S. central bank would be more likely to raise interest rates later this year than midyear. The Federal Open Market Committee's statement after its meeting last week reiterated that officials would be patient in considering the timing of the rate increase, which, according to Chairwoman Janet Yellen, means the earliest the central bank would move would be June. Gold is likely to have a harder time competing with interest-bearing assets when rates aren't pinned at zero, so any delay in raising rates is seen as positive for prices of the precious metal. "While a flight to safety is likely to underpin gold's rally in the near term, we believe without a change in sentiment prices are set to endure downward pressure as the market shifts its focus to the U.S. next quarter," said Barclays precious metals analyst Suki Cooper in a note. Write to Tatyana Shumsky at Credit: By Tatyana Shumsky
Subject: Gold markets; Central banks; Interest rates; Purchasing managers index
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Federal Open Market Committee--FOMC; NAICS: 921130; Name: Institute for Supply Management; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650163275
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650163275?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Obama Budget Would Pour Funds Into Climate, Renewable Energy; Proposal Calls for Repeal of Nearly $50 Billion in Oil, Natural-Gas and Coal Tax Breaks
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
While many of Mr. Obama's energy and environmental plans have been included in prior year proposals, the 2016 proposal includes a new $4 billion fund, dubbed the Clean Power State Initiative Fund, to help states comply with draft Environmental Protection Agencyregulations cutting carbon emissionsfrom U.S. power plants.
Full text: WASHINGTON--President Barack Obama's fiscal 2016 budget plan would pour billions of dollars into climate-change and renewable-energy technologies, and repeal nearly $50 billion in tax breaks from the oil, natural-gas and coal industries. The budget proposal, released Monday, underscores an intensifying push by Mr. Obama on his climate agenda, which he hopes to cement as a presidential legacy in his final two years in office. While many of Mr. Obama's energy and environmental plans have been included in prior year proposals, the 2016 proposal includes a new $4 billion fund, dubbed the Clean Power State Initiative Fund, to help states comply with draft Environmental Protection Agencyregulations cutting carbon emissionsfrom U.S. power plants. The fund, which would cost $4 billion over the next decade, would encourage states to exceed the minimum requirements of rules the EPA is expected to complete this summer. The fund is likely to incite opposition from congressional Republicans, who control Congress. Hamstringing EPA's climate regulations is a top goal of Senate Majority Leader Mitch McConnell (R., Ky.), who represents a state heavily dependent upon coal for energy production and electricity. Mr. McConnell has said one way he will try to stop the EPA's climate regulations will be by cutting off its funding. The EPA would administer the fund and proposed it not be subject to spending restrictions from an existing budget deal known as sequestration. The administration proposes an overall EPA budget at $8.6 billion, or 5.8% greater than and more than 8% higher than what the administration . The new fund would be in addition to those figures. The EPA budget also proposes $239 million to support the agency's climate agenda and $25 million to help states comply with its rule on power plants. The administration proposed some cuts to EPA's budget, including $54 million off $2.4 billion of EPA programs that help localities pay for clean drinking water and sewer projects, and $50 million from a $300 million initiative to restore the Great Lakes. Mr. Obama separately proposed $1.29 billion go toward his pledge to commit that supports reduced greenhouse gas emissions and climate preparedness in poorer countries. This money primarily comes from the Treasury and State departments and the U.S. Agency for International Development. Mr. Obama's budget proposes repealing a raft of oil, natural-gas and coal tax deductions that the administration estimates would raise nearly $50 billion for the federal government over the next decade. Most of that amount--$45.5 billion--comes from the oil and natural-gas sector. The president has repeatedly called to repeal these tax breaks in his previous budgets. Also reaffirming earlier budget blueprints, the plan proposes to permanently extend a tax credit for wind energy and a tax credit for solar power, which together would cost the government $31.5 billion over the next decade. The wind credit expired at the end of 2013, and Congress must vote to renew it. The solar industry's credit expires at the end of 2016. Republicans in Congress are generally opposed to the renewable-energy tax incentives, as well as repeal of the oil and gas tax breaks. The Obama budget calls for increasing the Energy Department's budget nearly 10% over current levels to $29.9 billion. The National Nuclear Security Administration, the agency responsible for safeguarding the nation's nuclear weapons, takes up the bulk of the department's budget. The overall budget proposal would provide $7.4 billion for clean-energy programs primarily within the Energy and Defense departments, which is up 13.8% from current levels. Mr. Obama also proposed an increase of 12.8% for the Interior Department to $13.2 billion. The proposal calls for the elimination of $3.1 billion in certain payments to oil, natural-gas, coal and other mineral development on public lands and in federal waters over the next decade. One policy that hasn't been requested before is an Interior proposal to redirect future oil and natural-gas drilling revenue that benefits four states along the Gulf Coast. "There is a small portion of the Gulf where there is revenue-sharing for certain Gulf states, and we believe that should be re-examined to what is a fair return to taxpayers," Interior Secretary Sally Jewell said Monday. Alabama, Louisiana, Mississippi and Texas currently receive 37.5% of the revenue generated from oil and gas production off their coasts and are set to get an increase in 2018. Mr. Obama's budget blueprint would redirect some of that funding to other uses, including conservation efforts that benefit the entire nation, and bring an additional $3 billion to the federal government's coffers. Write to Amy Harder at Credit: By Amy Harder
Subject: Energy policy; Emission standards; Industrial plant emissions; Natural gas; Tax cuts
People: Obama, Barack McConnell, Mitch
Company / organization: Name: Congress; NAICS: 921120; Name: Environmental Protection Agency--EPA; NAICS: 924110; Name: Agency for International Development--AID; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650214736
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650214736?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Exxon is No Chicken Little on Oil Prices -- Heard on the Street; Heard: Exxon is No Chicken Little on Oil Prices; Exxon is no chicken little on oil prices; Exxon is No Chicken Little on Oil Prices -- Heard on the Street; Exxon is No Chicken Little on Oil Prices; Exxon is No Chicken Little on Oil Prices; Something Has to Give for Prices to Rebound
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Yet even as E&P companies announce big budget cuts for 2015, production overall is still expected to grow and every time oil futures move up it allows these firms to hedge a bit more of their cash flow. [...]while the majors can borrow to cover their all-important dividends in the short term, big-ticket projects like liquefied gas, Arctic drilling and Canadian oil sands need much higher oil prices to make decent returns on investment.
Full text: If you want to picture today's oil market, imagine a brood of giant chickens running headlong at each other. The one thing everyone in the industry agrees on is that someone has to cut back. The question is who will be willing, or forced, to do so in order to help oil prices rebound. Saudi Arabia says it won't and data out Monday showed that Russia's output remained close to record levels in December. Beyond the state actors, oil majors aren't ceding much ground either. Exxon Mobil on Monday reported that capital expenditure and shareholder payouts were more than double its cash from operations in the fourth quarter. Yet it punted guidance on this year's investment plans to next month's analyst day and re-emphasized that spending was guided by long-term projections rather than "volatility in the market." Rivals Chevron and Royal Dutch Shell, while deigning to actually give 2015 budget guidance, also haven't taken the ax to spending, with each likely to invest well north of $30 billion. Their capacity to cut back is limited given existing commitments such as Chevron's Australian liquefied natural gas projects. But Shell, for instance, still plans to spend $1 billion this year drilling in Alaska. In both cases, there is an implicit bet that oil will rebound sooner rather than later. Oil has rallied sharply in recent days, taking Brent back above $50 a barrel, on numbers showing the biggest weekly drop of U.S. rigs in operations since the financial crisis. Like the oil majors, investors are betting that it will be smaller exploration and production companies that lose the game of chicken to curtail supply growth to rebalance the market. Certainly, falling rig counts bolster this view. Yet even as E&P companies announce big budget cuts for 2015, production overall is still expected to grow and every time oil futures move up it allows these firms to hedge a bit more of their cash flow. Moreover, while the majors can borrow to cover their all-important dividends in the short term, big-ticket projects like liquefied gas, Arctic drilling and Canadian oil sands need much higher oil prices to make decent returns on investment. The latter is the metric investors focus on with the oil majors, and where performance has slipped badly in the past five years or so. That makes Big Oil stocks vulnerable if the companies continue to hold the line on spending. Either the E&P sector could prove more resilient than expected or Saudi Arabia may yet decide to flood the market with extra supply, squeezing all of its rivals. Write to Liam Denning at Credit: By Liam Denning
Subject: Petroleum industry; Investments; Capital expenditures; Budgets
Location: Russia Saudi Arabia
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650228834
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650228834?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Three More Energy Companies in Texas Warn of Layoffs; Drop in the Price of Crude Oil Leads to More Cuts in Oil-Industry Workforce
Author: Ailworth, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
Analysts at Moody's Investors Service said oil and gas has been an engine of growth for GE, and low crude prices will weigh on the company as energy producers spend less in the oil patch.
Full text: Hundreds more oil-industry workers in Texas--including 330 in the oil and gas division of General Electric Co.--are about to lose their jobs as U.S. crude prices languish below $50 a barrel. In recent letters sent to the Texas Workforce Commission, GE Oil & Gas and two other energy companies warned state regulators of plans to cut 720 employees around the state. GE said it would cut about 45% of staff at its Buck Creek oil field equipment manufacturing plant in Lufkin, Texas, about 120 miles northeast of Houston. The layoffs are scheduled to begin in late March and are part of a restructuring drive to reduce costs, the company said. This "is a decision we don't take lightly but one we must undertake for the long-term health of the business," the company said. Analysts at Moody's Investors Service said oil and gas has been an engine of growth for GE, and low crude prices will weigh on the company as energy producers spend less in the oil patch. "Cost savings from restructuring initiatives will blunt the impact," the analysts said in a note to clients. In addition to the cuts at GE, two oil-field services companies informed Texas regulators of impending layoffs. Lariat Services Inc. will cut 265 employees who work in the Permian Basin area of West Texas, said Jeff Wilson, vice president for government and public affairs. Lariat is a subsidiary of Sandridge Energy Inc., an Oklahoma City-based oil and gas producer. "These decisions are tremendously difficult," Mr. Wilson said. "We are doing what we have to do to meet the current market and rise to the challenge." Trican Well Service LP is laying off 125 employees and shutting down its operation in Longview, Texas, about 130 miles east of Dallas, according to the Texas Workforce Commission. A representative for Trican couldn't immediately be reached. Deep job cuts in the oil patch are expected because energy companies are drilling fewer wells and looking for ways to save money this year. The industry is reeling from a steep drop in the price of crude oil, which is down more than 50% since June, settling Monday at $49.57 a barrel. In the past several weeks, tens of thousands of oil workers around the world have lost their jobs as companies pare their workforces to deal with the downturn. Write to Erin Ailworth at Credit: By Erin Ailworth
Subject: Energy industry; Layoffs; Petroleum industry; Crude oil prices
Location: United States--US West Texas
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: GE Oil & Gas; NAICS: 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650238849
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650238849?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asia's Oil Giants Rethink Spending Plans; State-Run Companies Weigh Double-Digit Investment Cuts Amid Crude-Price Slump
Author: Yep, Eric; Otto, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]02 Feb 2015: n/a.
Abstract:
SINGAPORE--Asia's largest oil companies are set to join their global peers in slashing investment plans for 2015 in response to the slump in oil prices, putting production growth in jeopardy in the energy-hungry region.
Full text: SINGAPORE--Asia's largest oil companies are set to join their global peers in slashing investment plans for 2015 in response to the slump in oil prices, putting production growth in jeopardy in the energy-hungry region. Malaysia's Petroliam Nasional Bhd., known as Petronas, has warned of double-digit percentage cuts in capital spending this year, while China's Cnooc Ltd. and PetroChina Ltd. could reduce spending by a similar amount, people briefed by the companies said. Indonesia's Pertamina said last week it could cut its investment by up to 50% this year. In all, Asian state-run oil-and-gas companies--which in the recent past have spent around $120 billion a year, accounting for nearly one-fifth of annual sector investment world-wide--could cut capital spending by between 15% and 30% in 2015, according to several experts. Meanwhile, major developments planned in the region by international oil companies including Chevron Corp. could be put on hold as the industry comes to terms with the new economics of low oil prices. "The next three months are crucial for oil majors as the level at which oil prices settle will decide how much spending gets cut," Shun Ling Yap, oil and gas analyst at Business Monitor International, a unit of Fitch Ratings, said. As companies spend less both on exploration and developing existing resources, Asia-Pacific's oil production could peak in 2016 at 8.5 million barrels a day--nearly 10% of annual global oil output--and then slip into a decline, Ms. Yap estimates. The likely cuts in capital spending in Asia echo moves made by large oil companies globally as they come to terms with oil prices under $50 a barrel. On Thursday, over the next three years. Also Thursday, , having previously lowered its budget by 20% in December. French oil major Total SA said this month it would chop its investment budget for 2015 by 10%. While much of the focus during oil's slide has been on the effect on the U.S.'s burgeoning shale-oil industry and on members of the Organization of the Petroleum Exporting Countries, it is regions where costs are elevated or where regulatory or political barriers to investment are high that could suffer most. Companies operating in the U.K.'s North Sea, where new projects often need oil prices above $75 a barrel to break even, . In Asia, Indonesia--one of the region's top two oil-exporting nations--has seen investment growth hindered by the difficulties companies encounter obtaining necessary permits and regulations such as age limits on foreign oil experts allowed to work there. A slowdown in the permits process pushed U.S. energy giant Chevron Corp. to delay green-lighting a $12 billion ultra-deepwater gas project in September, the country's first such project. Chevron says it is still considering the project, but has given no timeframe. The slide in oil prices is making such tricky investments even less attractive, particularly as gas is often sold on long-term contracts at prices linked to oil. One industry adviser who is trying to bring investors into at least four oil-and-gas assets in Indonesia said it is a tough sell these days. "There is some resistance, and my feeling is that it is 50% about Indonesia and 50% a drop in confidence due to global effects," he said. Waning spending by oil companies comes at a bad time for Indonesia's industry. In 2014, oil production from the former OPEC member fell to its lowest point in more than 40 years. "If nothing is done, Indonesia will be a net energy importer by 2019," said Lukman Mahfoedz, chief executive of oil and gas company PT Medco Energi Internasional Tbk. Other Asian oil giants expect production to decline this year. Last week, state-owned Vietnam Oil & Gas Group, or Petrovietnam, lowered its production target for 2015 by 3.5% from last year, to 16.8 million metric tons or 337,400 barrels a day of crude oil. Asia's oil production has struggled to increase in recent years, and the region needs both state-owned companies--which own much of Asia's hydrocarbon resources--and independent firms to keep spending on new developments to replace depleting reserves. The International Energy Agency has estimated Asia will need total investment of around $3.33 trillion from 2014 to 2035 to ensure its oil-and-gas production remains at current levels. Big oil companies have been counting both on expanding existing oil fields and new projects to boost flagging production volumes. But with oil prices trading at under $50 a barrel, many won't provide a positive return on investment. Marginal oil field developments in Malaysia, the region's biggest oil exporter, need oil at $70 a barrel to break even, analysts estimate. Petronas, one of Asia's largest oil exporters, said in November it expected spending cuts of between 15% and 20% this year. The company didn't respond when asked for further comment. Thailand's state-run PTT Exploration and Production Public Co., or PTTEP, has cut its five-year spending plans to $24.3 billion from the $27 billion set a year earlier. In China, the three oil majors Cnooc, PetroChina and Sinopec Ltd. could collectively cut capital spending by 30% in 2015, according to Nomura's head of oil research Gordon Kwan. He said weaker cash flows will force Chinese oil majors to prioritize profitable projects over production growth. Spokespeople for the Chinese companies said they would outline detailed spending plans in early February, with Cnooc due to update investors first on Tuesday. Vu Trong Khanh in Hanoi, Jason Ng in Kuala Lumpur and I-Made Sentana in Jakarta contributed to this article. Write to Eric Yep at and Ben Otto at Credit: By Eric Yep and Ben Otto
Subject: Petroleum industry; Capital expenditures; Petroleum production; Natural gas utilities
Location: China Indonesia Malaysia Asia
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: Petronas; NAICS: 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 2, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650238870
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650238870?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Exxon's Profit Drops 21% as Production Declines; Quarterly Cash Flow Reaches Lowest Level Since 2009
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Among the data that made traders more bullish was a report on Friday that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day.
Full text: Exxon Mobil Corp., the biggest and richest U.S. oil company, is moving to conserve cash in a sign that it doesn't expect a quick rebound in crude prices. Despite generating $87.3 billion in revenue last year, Exxon's cash flow in the last three months of 2014 fell to its lowest level since recession-wracked 2009. On Monday, the company said it would cut spending on share buybacks by two-thirds to $1 billion this quarter as it searches for ways to cut costs. "This organization has a very strong culture of driving down our cost structure," Jeff Woodbury, Exxon's head of investor relations, said in a call with analysts. The Irving, Texas, company isn't assuming that oil and gas prices will increase, he added. One by one, the world's biggest oil and gas producers are posting weaker profits as oil prices have collapsed to less than $55 a barrel from triple digits over the summer. Last week, ConocoPhillips said it would cut spending on new oil and gas projects by 15%, on top of a 20% cut disclosed in December. Occidental Petroleum Corp. said it would chop capital spending by a third this year. Royal Dutch Shell PLC has said it would spend $15 billion less than planned over the next three years. And Chevron Corp. plans to cut spending by $5 billion from 2014 and suspend its share-buyback program. Exxon said it operated more drilling rigs in the U.S. in the fourth quarter than it had earlier in the year, and its retrenchment is less drastic than some of its rivals. But given the company's focus on the long-term, its efforts to retain cash are a sign of just how cautious energy executives have become. The company won't report its capital spending plans until March. The big, diversified energy companies "were built for conditions like these," said Doug Terreson, head of energy research at Evercore ISI. But even giants "want to try and preserve cash and prepare for the downturn in case it's extended." These companies, which generate billions of dollars in cash flow a year, are among the best insulated in their industry against the bite of falling oil prices. They have strong balance sheets and own refining and chemicals businesses that can benefit from cheap crude, which they convert to plastics, gasoline and other fuels. Smaller companies, whose shale-drilling has sparked a resurgence in U.S. oil and gas output, are more vulnerable to the price collapse; most of them will report earnings later this month. There are signs that crude prices might be stabilizing. The U.S. benchmark for oil prices rose to $49.57 on Monday, continuing a recent recovery since prices dipped below $45 a barrel last week. Exxon shares rose 2.5% to $89.58 in 4 p.m. New York trading on Monday amid broad market gains. The price of Brent crude, the global benchmark, also rose to $54.75, up 3.3%. Among the data that made traders more bullish was a report on Friday that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day. Still, few analysts expect U.S. oil production to slow until the second half of the year at the earliest, and crude prices remain near the lowest level in six years. The oil-price slump has arrived at a vulnerable moment for big energy companies. Natural gas prices have remained low since drillers unleashed a flood of gas from shale-rock formations beginning around 2008, keeping a lid on profits of big producers like Exxon, which bought XTO Energy, a shale-gas pioneer, for $25 billion in 2010. Bolstered by oil hovering around $100 a barrel for the last three years, Exxon and its peers have invested at historic levels to tap massive energy deposits in some of the most remote reaches on earth, from Australia's offshore gas fields to Canada's oil sands. At the same time, they have steadily boosted dividend payments that long been their hallmark, and added share buybacks as a further enticement to investors. Such aggressive spending, combined with low interest rates, has led energy giants to pile on billions of dollars in debt. Now, crude's fall is taking a toll on the strongest balance sheets in the oil patch, with some analysts questioning how much new debt Exxon and Chevron can take on and still maintain their superior credit ratings. The companies have indicated they can borrow much more without jeopardizing their credit ratings. Exxon borrowed $7.3 billion in the quarter, bringing total debt to $29.1 billion, more than double the level in early 2013. Cash on hand fell to $4.7 billion by the end of last year from $5 billion at the beginning of the year. Exxon's $6.6 billion profit for the fourth quarter of 2014 was 21% less than a year ago, contributing to its weak cash flow. While still more than any U.S. rival, Exxon's cash flow for the quarter was about $7 billion short of covering its costs for tapping oil and gas, paying dividends and repurchasing shares. In all, Exxon reported a per-share profit of $1.56, down from $1.91 a year earlier. Revenue slipped to $87.3 billion from $110.9 billion. Wall Street analysts polled by Thomson Reuters expected the company to report per-share profit of $1.34 on revenue of $87.6 billion. Exxon is expected to release its capital spending plans for 2015 next month; a year ago, it forecast spending less than $37 billion this year. Write to Daniel Gilbert at daniel.gilbert@wsj.com Corrections & Amplifications Exxon Mobil's refining and marketing earnings fell by 46% in the fourth quarter. An earlier version of this article misstated the percentage in the sixth paragraph. Credit: By Daniel Gilbert
Subject: Petroleum industry; Cash flow; Corporate profits; Capital expenditures; Crude oil prices; Petroleum production; Natural gas prices
Location: United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Occidental Petroleum Corp; NAICS: 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650250811
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650250811?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Indonesia Struggles to Strike Oil; Investment Falls Short of Government's Target for 2014
Author: Otto, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Exxon Mobil Corp.'s Cepu block, long hailed as the project that would restore Indonesia to one million barrels of a day of oil production, has missed deadlines for years in part due to land acquisition snags.
Full text: JAKARTA, Indonesia--Oil and gas investment in Indonesia fell 26% short of the government's target in 2014, underscoring a hard truth for Southeast Asia's largest economy: oil is getting harder to find and extract, and without more help from government in an era of riskier plays, few companies are betting big. Government data shared with The Wall Street Journal shows investment in the former OPEC member reached $18.9 billion last year, more than $6 billion shy of its goal--the first decline in at least five years. Companies say that is because the government has made it harder to operate here by imposing age limits on foreign industry experts, slowing down the permit process for new investments and maintaining an incentives scheme that doesn't reflect a costlier era of oil recovery. New rules last year closed off many oil and gas services to foreigners. The result is that oil output is falling fast, exploration is a small percentage of overall investment and no new major fields have been discovered in years. Some projects are delayed because --and fear of being implicated in them--effectively have frozen the bureaucratic process. Last year, one case landed the in jail, while the energy minister later stepped down. "Those are very serious in terms of affecting people making decisions," said Kuntoro Mangkusubroto, a former energy minister who has worked with foreign energy majors developing new projects. He called "indecisiveness" at the upstream regulator a major reason for delayed projects. A slowdown in the permits process pushed U.S. energy giant Chevron Corp. to delay greenlighting a in September, the country's first such project. Other companies have seen fields sit untapped for more than a decade after the discovery of oil. Another challenge is acquiring land. Exxon Mobil Corp.'s Cepu block, long hailed as the project that would restore Indonesia to one million barrels of a day of oil production, has missed deadlines for years in part due to land acquisition snags. In other cases, the government hasn't made decisions on expiring contracts. French energy major Total S.A. says it can't commit to further investment in one of the country's largest gas fields until the government clarifies what it intends to do when the company's contract runs out in 2017. The country continues to operate "under the old paradigm, where Indonesia had lots of oil and lots of people trying to get it," said Andrew White, former managing director of the American Chamber of Commerce in Jakarta. "Today, companies have the option to leave and get the oil elsewhere. Indonesia hasn't yet realized that." The new government of President Joko Widodo says it knows that the sector needs an overhaul, and that it is taking steps to do that by appointing new oil officials and considering fresh incentives to draw investors into making costlier investments in deep water and eastern Indonesia fields, as well in enhanced recovery operations. "We have to change the [production-sharing contract] scheme," Sofyan Djalil, coordinating minister for economic affairs, told The Wall Street Journal. He called the current scheme "archaic," and said the government is discussing a change "very soon." Mr. Widodo , saying he's met with Shell executives to discuss just that. "Why not? If you bring money, and that in my calculation it gives benefit to my country, to my people, please," he said. Write to Ben Otto at Credit: By Ben Otto
Subject: Petroleum industry; Energy policy; Petroleum production; Oil recovery
Location: Southeast Asia
Company / organization: Name: Organization of Petroleum Exporting Countries--OPEC; NAICS: 813910; Name: Chevron Corp; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: American Chamber of Commerce; NAICS: 813910
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650267766
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650267766?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Australia Cuts Interest Rates to Record Low; Reserve Bank Eases Policy in Response to Tumbling Oil Price, Deflation Worries
Author: Glynn, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract: None available.
Full text: SYDNEY--Australia cut its benchmark interest rate to a record low of 2.25% Tuesday, joining a procession of central banks that have eased policy settings this year in response to the deflationary impact of tumbling oil prices. The 0.25-percentage-point cut represents a dramatic shift for the Reserve Bank of Australia--which ended 2014 with a message to financial markets that interest-rate stability was likely to feature again in 2015, to help underpin certainty for businesses and support the economy as a mining-investment boom fizzles out. Gov. Glenn Stevens said the decision to come off the sidelines for the first time in 18 months was driven by concern that Australia's resource-rich economy was facing another year of below-average growth. The Australian dollar fell sharply on the announcement of a cut, dropping to a fresh 5½-year low, while the stock market surged to the highest level since May 2008. Nations cutting interest rates or engaging in stimulus measures are hoping to boost domestic growth and employment by weakening their currencies, making exported goods more competitive overseas. Still, currency depreciation also raises the risk of a tit-for-tat race to the bottom, as trading partners seek to outdo one another only to find gains are limited. "Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns reaching new all-time lows over recent months," Mr. Stevens said. The central bank has been cutting rates on and off since late 2011, but has been in a holding pattern since August 2013. The case for a rate cut was strengthened by recent inflation data, which showed an absence of price pressures in the economy. With falling oil prices also driving lower gasoline prices at the pump, the central bank can safely bet on weak inflation readings for some time. The Reserve Bank of Australia joins the Monetary Authority of Singapore, Reserve Bank of New Zealand, European Central Bank, Bank of Canada and the central banks of India, Denmark and Switzerland in either announcing substantial policy shifts or easing monetary settings--in some cases dramatically--since Jan. 1. Throughout last year, Australia's central bank repeatedly stressed it would be appropriate for rates to remain stable for some time. It removed that reference on Tuesday, leaving open the door to more cuts. "The idea that the RBA could sit there and persist with forward guidance that suggested policy stability was no longer tenable given the action of other central banks so far this year," said Sally Auld, a fixed-income and foreign-exchange strategist at J.P. Morgan in Sydney. Financial markets are expecting further rate cuts to follow, factoring in at least one more by June. Mr. Stevens, meanwhile, sought to head off concern about rising house prices, saying that the banking regulator had drawn up plans to stymie any resurgence in speculative mortgage lending. An overheating housing market presents a big risk to the economy since a crash could unravel the Reserve Bank's limited success in stimulating sectors such as retail and manufacturing. Australia's economy, which hasn't encountered a recession for 23 years, was among the few to emerge from the global financial crisis largely unscathed, thanks to industrializing China's thirst for the nation's abundant raw materials. China is Australia's largest trading partner and the biggest buyer of the country's top export, iron ore, the steelmaking ingredient for which prices plunged by some 50% last year as supply ballooned. But China's recent weakening is also hurting Australia's economy, which slowed sharply in late 2014 as tumbling commodity prices shook confidence and as critical investment outside the mining industry remained weak despite the record-low interest rates. Unemployment is near its highest levels in a decade, while the sustained fall in oil prices is expected to hit the profitability of vast gas projects across the country's northern frontier. Australia's treasurer, Joe Hockey, said the rate cut would help create jobs, while economists said the "income shock" caused by weaker commodity prices would squeeze government budgets. In Tuesday's statement, Mr. Stevens said the jobless rate--currently 6.1%--would likely peak a little higher than had been anticipated. Rob Taylor contributed to this article. Write to James Glynn at james.glynn@wsj.com Credit: By James Glynn
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650267830
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650267830?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Surge 7% to One-Month High; U.S. Refinery Strike Pushes Up Prices for Petroleum Products
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Plunging oil prices, driven by a global glut of crude oil, pummeled shares of oil companies and the currencies of oil-producing nations. Money managers, including hedge funds, added a large number of bets on lower U.S. oil prices in January, according to data from the U.S. Commodity Futures Trading Commission.
Full text: Oil prices soared to a one-month high on Tuesday, providing investors some respite from a prolonged selloff that rattled financial markets, the energy sector and oil-dependent economies. U.S. oil futures notched a fourth consecutive gain, their longest winning streak since August. Prices have risen 19% in that time. The benchmark crude-oil contract on the New York Mercantile Exchange settled up $3.48, or 7%, at $53.05 a barrel, the highest settlement price since Dec. 31, 2014. Despite the jump in oil prices, few investors and analysts are willing to call a bottom to . Plunging oil prices, driven by a global glut of crude oil, pummeled shares of oil companies and the currencies of oil-producing nations. The decline also prompted cutbacks to energy spending and investment, potentially sowing the seeds for a sustained recovery in prices. Tuesday's rally came in response to a U.S. refinery strike, which pushed up prices for petroleum products on concerns that the refineries could shut down fuel production. "It's a pretty big move," said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. "You have a sequence of events that has really spiked this market," including the refinery strike and announcements that major oil companies are cutting their 2015 spending plans, he said. Refineries also typically close units in February and March to perform seasonal maintenance, which can boost product prices. Retail gasoline cost $2.07 a gallon, on average, in the U.S. on Tuesday, AAA said, up about a penny from Monday. But the global crude market is still oversupplied, analysts say. Money managers, including hedge funds, added a large number of bets on lower U.S. oil prices in January, according to data from the U.S. Commodity Futures Trading Commission. The recent rally is likely due to some of those traders closing out positions, said Andy Lebow, senior vice president of energy at Jefferies LLC. In futures markets, investors must buy contracts to close bearish bets. When many investors try to take profits at the same time, the scramble tends to exert upward pressure on prices. "Oil products continue to rally," said Phil Flynn, analyst at the Price Futures Group, in a note. Though the refineries affected by the strikes say they will use nonunion labor to keep operating, "many are not certain if the refineries over the long run can maintain output," Mr. Flynn said. Already, Tesoro Corp. announced plans to idle one refinery in California during the strike to perform seasonal maintenance. Brent, the global benchmark, settled up $3.16, or 5.8%, at $57.91 a barrel on ICE Futures Europe, the highest settlement since Dec. 26, 2014. Prices are also up for four straight sessions, the longest winning streak since June. Brent prices are up 24% from their Jan. 13 low. A 20% gain from a recent low is defined as a bull market. Refineries are seeing better profits for turning crude oil into gasoline and other products, because there is more storage space available for oil products than for crude oil, according to London consulting firm Energy Aspects. Gasoline futures rose 3.7% to $1.6013 a gallon, while diesel futures gained 5.1% at $1.8465 a gallon. Data released Friday showing a sharp drop in the number of rigs drilling for oil in the U.S. have also boosted prices. Some traders expect the cutback in drilling to lead to lower U.S. production, reducing the global glut of oil. Gareth Lewis-Davies, an analyst at BNP Paribas, said investors were encouraged by the U.S. rigs data. But as the lag between falling rig counts and falling output is up to nine months, the price gains may not be sustained, he said. Global supply is still exceeding demand, and crude-oil stocks will continue to build for some time, he said. RBC Capital Markets on Tuesday cut its Brent crude forecast for this year to $57 a barrel from $71 a barrel and lowered its Nymex crude forecast to $53 a barrel from $65 a barrel. "World oil prices are searching for a bottom in a landscape characterized by excess supply," the bank said. "Severe capital spending cuts under way globally, in tandem with natural declines, are laying the groundwork for an oil price recovery to take shape during the second half of 2015 and into 2016." Investors are tracking spending cuts and falling profits at major oil companies, as these will eventually lead to cuts in oil output. BP PLC on Tuesday . The company expects organic capital expenditure this year to total around $20 billion, significantly lower than its previous guidance of $24 billion to $26 billion. Market watchers are waiting for weekly storage data from the U.S. Energy Information Administration, which is due to be released Wednesday. Analysts surveyed by The Wall Street Journal expect the agency to report that crude-oil supplies rose by 3.7 million barrels last week, while inventories of gasoline fell by 300,000 barrels and stocks of distillates, including heating oil and diesel fuel, fell by 2.2 million barrels. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed a 6.1-million-barrel rise in crude stocks, a 2-million-barrel gain in gasoline supplies and a 278,000-barrel build in distillate stocks, according to industry sources. Eric Yep contributed to this article. Write to Nicole Friedman at and Georgi Kantchev at Credit: By Nicole Friedman And Georgi Kantchev
Subject: Petroleum refineries; Petroleum industry; Crude oil; Profits; Crude oil prices; Energy industry
Location: United States--US California
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: New York Mercantile Exchange; NAICS: 523210; Name: Tesoro Corp; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650361478
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650361478?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BG Group Hit by $8.9 Billion Write-Down; Oil and Natural Gas Company Booked Impairments on Assets in Australia
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Output in the fourth quarter slipped 0.8% to 630,000 barrels of oil equivalent a day due to lower volumes from the U.K. North Sea, Egypt and Kazakhstan.
Full text: LONDON--BG Group PLC is writing down the value of its oil and gas assets by nearly $9 billion as the British natural gas producer adjusts to the plunge in oil prices. The charge, reported in Tuesday's fourth-quarter earnings statement, capped for the U.K. company that was once a darling of investors. BG reported a steeper net loss of $5 billion for three months to end-December compared with a net loss of $1.08 billion in the same period a year earlier. Overall in 2014, the company turned in a net loss of $1 billion but held the dividend steady at 28.75 cents a share. About $6.8 billion of the write-down was related to BG's reassessment of its big bet in Australia, where the company has just started a giant project, known as QCLNG, to convert coal-seam gas to liquefied natural gas for export. BG said $4.1 billion of the write-down in Australia was driven mainly by a reduction in the company's assumptions about future . "In the last six months the world has changed," said BG Executive Chairman Andrew Gould on a conference call. "After four years of prices above $100 we're now operating above $50 a barrel." BG Group, once reputed for its production growth, will delay or cancel projects in 2015 and cut capital spending by around 30% to between $6 billion and $7 billion, Mr. Gould said. BG's production has slowed in recent years. Output in the fourth quarter slipped 0.8% to 630,000 barrels of oil equivalent a day due to lower volumes from the U.K. North Sea, Egypt and Kazakhstan. BG's shares were down slightly in early London trading, underperforming the oil-and-gas sector which was up more than 2% on the back of higher oil prices. The write-down, which totaled $5.9 billion after tax, comes as Helge Lund, of Norway's Statoil ASA, prepares to take the helm as BG's new CEO in March. BG has been without a CEO since the previous boss Chris Finlayson resigned last April after only 16 months in the job, leaving Mr. Gould in charge. The company, which today has a market value of around £31.80 billion ($47.70 billion), had fallen out of favor with investors after a series of profit warnings, production downgrades and cost overruns on big projects. The stock has lost around 30% of its value since the start of last year. A key task for Mr. Lund will be reshaping BG's collection of mainly gas assets in countries including , Tanzania and Egypt. BG also has a big position in Brazil's highly prized offshore oil fields in partnership with state-owned Petrobras, representing another challenge for Mr. Lund. Petrobras is embroiled . Mr. Gould said on Tuesday that the U.K. North Sea oil and gas sector is unlikely to experience a major resurgence at current oil prices, even if the government goes ahead with reducing the tax burden as it is considering. "I don't think you can, at these oil prices, hope for a major resurgence of the North Sea on the basis that there are a lot of other places in the world where the reserves life is a lot more promising than it is in the U.K. sector of the North Sea," Mr. Gould said. Oil and gas production from the U.K.'s North Sea has fallen around 70% since its peak in 1999, to roughly 1.4 million barrels a day. Royal Dutch Shell PLC has set out plans to decommission the U.K.'s North Sea Brent oil field. BG said its closely watched underlying profit, excluding exceptional items such as disposals and impairments, fell nearly 20% to $915 million but that was better than the analysts' consensus estimate of $576 million. The group's earnings fell 20% to 26.8 cents a share. Write to Selina Williams at Credit: By Selina Williams
Subject: Petroleum industry; Net losses; Financial performance; Natural gas utilities
Location: Egypt Kazakhstan Australia
Company / organization: Name: BG Group PLC; NAICS: 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650376808
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650376808?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP Posts Quarterly Loss Amid Oil Price Rout; Oil Major Will Cut Capital and Exploratory Budget by Nearly 20%
Author: Scheck, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
At least two dozen U.S. independent oil producers have announced plans to curb capital spending this year by nearly $24 billion dollars compared with last year's budgets, according to a review of company records by The Wall Street Journal.
Full text: LONDON--BP PLC on Tuesday joined a raft of oil companies, big and small, slashing their budgets for finding and tapping new sources of crude, offering a pessimistic outlook on a day it reported a net loss for the latest financial quarter. The London-based company, which is still facing up to $13.7 billion in U.S. penalties from its 2010 Gulf of Mexico spill, said it would cut its capital and exploratory budget by nearly 20%, down to $20 billion. The announcement came as BP became the only so-called super-major oil company in the red in the fourth quarter, a $969 million replacement-cost loss caused in part by a more than $3 billion downgrade in the value of some of its reserves. BP CEO Bob Dudley gave a darker assessment of the future than his oil rivals have, saying U.S. shale production and low oil prices are a structural shift that is forcing him to "reset the whole cost base" of the company. The outlook for oil prices is "clearly much weaker than anyone anticipated," he said. "I do think we're in for, at minimum, a year, and probably several years, of lower prices." BP is the latest producer to grapple with plunging oil prices by cutting capital expenses, walking a line between making short-term cost cuts and the need to invest in long-term projects that will produce crude in years to come. At least two dozen U.S. independent oil producers have announced plans to curb capital spending this year by nearly $24 billion dollars compared with last year's budgets, according to a review of company records by The Wall Street Journal. Additional cuts are expected over the next several weeks as big shale players, including EOG Resources Inc. and Anadarko Petroleum Corp., outline their 2015 spending strategies. And BP's decision follows super-major rivals Chevron Corp. and Royal Dutch Shell PLC in slashing planned capital expenses by billions of dollars. The cutbacks come after years of high spending on giant projects around the globe. With oil near $100 a barrel, companies competing for access to drill rigs and contractors drove up development costs and sent giant projects over budget in far-flung places like Papua New Guinea. Now, oil prices are hovering between $50 and $60 a barrel. The situation has benefited American consumers who have enjoyed $2 a gallon gasoline for the first time in a decade, but it is below the break-even point for many new oil-drilling projects. BP's gloomy quarterly report didn't scare off investors, who sent the stock up nearly 4% in London trading Tuesday. The slashed spending by producers has helped fuel the recent oil-price rally, with some betting the cuts will bring the global market back into balance. Brent, the global benchmark, and WTI, the U.S. price marker, have both gained more than 15% since Thursday. But the risks of pulling back too far on new oil fields were noted by some analysts and investors. BP last year replaced only 62% of the oil and gas it pumped with new reserves and Shell replaced just 26%. For both companies, that is the lowest amount in a decade, according to data from analysts at Oppenheimer. Mr. Dudley said Tuesday that the replacement ratios are "lumpy" year to year and the fluctuations aren't a concern. "You'll get Brownie points from the stock market for slashing your spending in the short term, but in the long term you have to be concerned about your long-term prospects," said Ivor Pether, a portfolio manager with Royal London Asset Management, which owns Shell and BP stock. The spending cuts and a commitment to paying dividends were heartening to investors, Mr. Pether said, but he added that investors must ask "how they are protecting the long-term dividend stability, which only comes from delivering new projects to replace the ones that run off." Development costs are dropping with the oil price. Now, said Oppenheimer analyst Fadel Gheit, "would be the time to invest in long-term projects." Instead, companies facing investor pressure are cutting back when they could invest at low rates on projects that could be lucrative if prices rebound years down the road. Mr. Dudley said the company is reviewing, for a second time, a delayed offshore project in the Gulf of Mexico called Mad Dog 2 in an effort to find ways to cut costs. The company also struck a deal to partner with Chevron on some Gulf projects that could make them less costly for BP, Mr. Dudley said. Another British energy company, BG Group PLC, said it would cancel or delay projects in 2015 and cut capital spending by roughly a third, to about $6 billion to $7 billion, after writing down nearly $9 billion in assets and reporting a net loss of $5 billion for the 2014 fourth quarter. "In the last six months the world has changed," said BG Executive Chairman Andrew Gould on a conference call. "After four years of prices above $100, we're now operating above $50 a barrel." Shell last week sounded a less bearish note. Its chief executive said the company would cut some $15 billion of planned capital spending over the next few years, but executives said they were confident that oil prices would rebound in coming years. Chevron said last week it would cut capital spending this year by 13% from 2014. Since its 2010 Gulf of Mexico explosion and spill, BP has faced investor pressure to maintain dividends, which Mr. Dudley called a "financial priority." The company has shrunk since the spill, selling more than $40 billion in assets to pay for legal and cleanup costs. Even as it announced cost cuts Tuesday, Mr. Dudley said BP would raise its dividend. The asset sales since 2010 reduced BP's production by about 25% between the spill and the end of 2013, but the company said in December that its head count rose over that period. BP said it would book a $1 billion restructuring charge as it tries to cut costs through layoffs and other measures. BP also lowered the value of reserves in places such as the North Sea and Angola, which it has relied on for some of its highest profit margins in recent years. For the full year, BP reported a replacement-cost profit--a figure that strips out inventory changes and is similar to the net income that U.S. companies report--of $8.07 billion, compared with $23.61 billion for 2013. BP's net loss for the quarter was $4.41 billion, compared with a profit of $1.04 billion in the same period last year, on revenue down 21% at $74 billion. Net profit for the year fell to $3.78 billion from $23.45 billion, with revenue falling 6.7% to $353.57 billion. BP's earnings only capture a portion of the recent oil-price decline, since much of it happened after the quarter closed; the price for benchmark Brent crude averaged about $77 a barrel in the fourth quarter. Erin Ailworth, Daniel Gilbert, Selina Williams and Georgi Kantchev contributed to this article. Write to Justin Scheck at Credit: By Justin Scheck
Subject: Petroleum industry; Prices; Investments; Net losses; Capital expenditures; Budgets
Location: United States--US
People: Dudley, Bob
Company / organization: Name: EOG Resources Inc; NAICS: 211111, 213112; Name: Royal Dutch Shell PLC; NAICS: 32411 0, 213112, 221210; Name: Anadarko Petroleum Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650376826
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650376826?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
An Ominous Forecast From Exxon --- Share Buybacks and Capital Spending Are Tightened as Prices Continue to Lag
Author: Gilbert, Daniel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Feb 2015: B.1.
Abstract:
Among the data that made traders more bullish was a report on Friday that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day.
Full text: Exxon Mobil Corp., the biggest and richest U.S. oil company, is moving to conserve cash in a sign that it doesn't expect a quick rebound in crude prices. Despite generating $87.3 billion in revenue last year, Exxon's cash flow in the last three months of 2014 fell to its lowest level since recession-wracked 2009. On Monday, the company said it would cut spending on share buybacks by two-thirds to $1 billion this quarter as it searches for ways to cut costs. "This organization has a very strong culture of driving down our cost structure," Jeff Woodbury, Exxon's head of investor relations, said in a call with analysts. The Irving, Texas, company isn't assuming that oil and gas prices will increase, he added. One by one, the world's biggest oil and gas producers are posting weaker profits as oil prices have collapsed to less than $55 a barrel from triple digits over the summer. Last week, ConocoPhillips said it would cut spending on new oil and gas projects by 15%, on top of a 20% cut disclosed in December. Occidental Petroleum Corp. said it would chop capital spending by a third this year. Royal Dutch Shell PLC has said it would spend $15 billion less than planned over the next three years. And Chevron Corp. plans to cut spending by $5 billion from 2014 and suspend its share-buyback program. Exxon said it operated more drilling rigs in the U.S. in the fourth quarter than it had earlier in the year, and its retrenchment is less drastic than some of its rivals. But given the company's focus on the long-term, its efforts to retain cash are a sign of just how cautious energy executives have become. The company won't report its capital spending plans until March. The big, diversified energy companies "were built for conditions like these," said Doug Terreson, head of energy research at Evercore ISI. But even giants "want to try and preserve cash and prepare for the downturn in case it's extended." These companies, which generate billions of dollars in cash flow a year, are among the best insulated in their industry against the bite of falling oil prices. They have strong balance sheets and own refining and chemicals businesses that can benefit from cheap crude, which they convert to plastics, gasoline and other fuels. Smaller companies, whose shale-drilling has sparked a resurgence in U.S. oil and gas output, are more vulnerable to the price collapse; most of them will report earnings later this month. There are signs that crude prices might be stabilizing. The U.S. benchmark for oil prices rose to $49.57 on Monday, continuing a recent recovery since prices dipped below $45 a barrel last week. Exxon shares rose 2.5% to $89.58 in 4 p.m. New York trading on Monday. Among the data that made traders more bullish was a report on Friday that the number of rigs drilling for oil in the U.S. fell 7% last week to 1,223, the lowest in three years, according to oil-field-services company Baker Hughes Inc. A surge in U.S. oil output, along with muted demand for oil around the globe, has led to an oversupply of crude that some energy analysts have put as high as 2 million barrels a day. Still, few analysts expect U.S. oil production to slow until the second half of the year at the earliest, and crude prices remain near the lowest level in six years. The oil-price slump has arrived at a vulnerable moment for big energy companies. Natural gas prices have remained low since drillers unleashed a flood of gas from shale-rock formations beginning around 2008, keeping a lid on profits of big producers like Exxon, which bought XTO Energy, a shale-gas pioneer, for $25 billion in 2010. Bolstered by oil hovering around $100 a barrel for the last three years, Exxon and its peers have invested at historic levels to tap massive energy deposits in some of the most remote reaches on earth, from Australia's offshore gas fields to Canada's oil sands. At the same time, they have steadily boosted dividend payments that long been their hallmark, and added share buybacks as a further enticement to investors. Such aggressive spending, combined with low interest rates, led energy giants to pile on billions of dollars in debt. Now, crude's fall is taking a toll on the strongest balance sheets in the oil patch, with some analysts questioning how much new debt Exxon and Chevron can take on and still maintain their superior credit ratings. The companies have indicated they can borrow much more without jeopardizing their credit ratings. Exxon borrowed $7.3 billion in the quarter, bringing total debt to $29.1 billion, more than double the level in early 2013. Cash on hand fell to $4.7 billion by the end of last year from $5 billion at the beginning of the year. Exxon's $6.6 billion profit for the fourth quarter of 2014 was 21% less than a year ago, contributing to its weak cash flow. While still more than any U.S. rival, Exxon's cash flow for the quarter was about $7 billion short of covering its costs for tapping oil and gas, paying dividends and repurchasing shares. In all, Exxon reported a per-share profit of $1.56, down from $1.91 a year earlier. Revenue slipped to $87.3 billion from $110.9 billion. Wall Street analysts polled by Thomson Reuters expected the company to report per-share profit of $1.34 on revenue of $87.6 billion. Exxon is expected to release its capital spending plans for 2015 next month.
Credit: By Daniel Gilbert
Subject: Petroleum industry; Cash flow; Corporate profits; Capital expenditures; Petroleum production; Natural gas prices; Cost reduction; Crude oil prices; Securities buybacks
Location: United States--US
Company / organization: Name: ConocoPhillips Co; NAICS: 211111; Name: Chevron Corp; NAICS: 324110, 211 111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Occidental Petroleum Corp; NAICS: 324110, 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 3100: Capital & debt management; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Feb 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650397560
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650397560?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
World News: Signs of Growth Bolster Japan Leader Abe --- Hints Surface of Increased Economic Activity Helped by Low Oil Prices; Skeptics Say Long-Term Perspective Remains Dim
Author: Schlesinger, Jacob M
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Feb 2015: A.9.
Abstract:
With downward pressure from oil prices counteracting the Bank of Japan's massive stimulus aimed at stoking inflation, "we now expect that Japan will fall back into deflation from March to November," J.P. Morgan economist Masamichi Adachi wrote in a recent report, though he added he expected a bounceback later in the year.
Full text: TOKYO -- Japan's economy is rebounding from recession, boosted by cheap oil and weakening yen, and giving fresh hopes for Prime Minister Shinzo Abe's tarnished Abenomics revival program. A number of economists say new data, however, suggest only a temporary respite from long-term decline rather than the lasting end to deflation the government seeks to foster. The good news is that companies are starting to ramp up production as the damaging effects of an April sales-tax increase finally wear off, and consumer spending is showing hints of recovery. Gross domestic product likely expanded by an annualized rate of at least 3% in last year's final three months, following two straight quarters of contraction, according to a recent survey of 41 forecasters by the Japan Center for Economic Research. For the next two years, the economists surveyed see annual growth between 1.5% and 2%. That is a solid turnaround from the likely 0.6% decline for the fiscal year ending in March. And there are signs the weakening of the yen -- the most concrete outcome to date of Abenomics -- is finally offering some of its long-expected boost, by making Japan-made goods and services cheaper for the rest of the world. "Slowly but surely, the weak yen is beginning to lift Japanese exports," said Izumi Devalier of HSBC Global Research, pointing to a 13% export bounce in December. The weak yen is also spurring record tourism and prompting some Japanese companies to bring some jobs home. Electronics makers like Canon Inc., Panasonic Corp and Sharp Corp. have all announced plans to ramp up domestic output. December unemployment fell to 3.4%, the lowest since 1997. But as political opposition to structural changes intensifies and many companies and consumers seem to be clinging to their risk-averse mentality of Japan's long deflationary era, price and wage increases remain uncomfortably low. "Things go up and things go down, but there's a difference between cyclical and long-term trends," said Richard Katz, editor of a newsletter on the Japanese economy and anAbenomics skeptic. "There's no sign this is a change in the basic trend." With downward pressure from oil prices counteracting the Bank of Japan's massive stimulus aimed at stoking inflation, "we now expect that Japan will fall back into deflation from March to November," J.P. Morgan economist Masamichi Adachi wrote in a recent report, though he added he expected a bounceback later in the year. Surveys still regularly show pessimism in Japan about near-term prospects. In a December Bank of Japan public-opinion survey, just 7% of respondents expected the economy to improve over the next year. While the Nikkei Stock Average stands at more than twice its pre-Abe level, companies haven't shed their long-standing caution, and keep an unusually large portion of their gains in retained earnings. Real wages -- paychecks adjusted for inflation and higher sales taxes -- have fallen in the past year. Mr. Abe and his handpicked Bank of Japan governor, Haruhiko Kuroda, have made eradicating deflation a main gauge of their success. Sustained inflation around 2%, they reason, is needed to erase the "deflationary mind-set" that has created a culture of risk aversion. But the most closely watched version of the consumer-price index, after rising to 1.5% in April 2014, fell back to 0.5% in December, and few forecasters expect it to hit Mr. Kuroda's 2% target by early next year. And Mr. Abe still draws considerable skepticism about prospects for structural change, dubbed the "third arrow" of Abenomics, following the first and second parts: monetary and fiscal stimulus. While the first two arrows are tasked with lifting short-term growth, it is the third that is seen as necessary for raising long-term prosperity. --- Eleanor Warnock and Megumi Fujikawa contributed to this article. Credit: By Jacob M. Schlesinger
Subject: Yen; Recessions; Economic growth; Gross Domestic Product--GDP; Deflation; Economic conditions -- Japan
Location: Japan
People: Abe, Shinzo
Company / organization: Name: Sharp Corp; NAICS: 334310; Name: Canon Inc; NAICS: 333244, 333316, 333318, 334118; Name: Bank of Japan; NAICS: 521110; Name: Panasonic Corp; NAICS: 335222, 335224, 333415
Classification: 1110: Economic conditions & forecasts; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2015
Publication date: Feb 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Languageof publication: English
Document type: News
ProQuest document ID: 1650397579
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650397579?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
World News: Australia Cuts Interest Rate as Oil Tumbles
Author: Glynn, James
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Feb 2015: A.9.
Abstract:
The Reserve Bank of Australia joins the Monetary Authority of Singapore, Reserve Bank of New Zealand, European Central Bank, Bank of Canada and the central banks of India, Denmark and Switzerland in either announcing substantial shifts or easing monetary settings since Jan. 1.
Full text: SYDNEY -- Australia's central bank cut its benchmark interest rate to a record low of 2.25% Tuesday, joining a procession of central banks that have eased policy settings since the start of the year in response to the deflationary impact of tumbling oil prices. The 25-basis-point cut represents a shift for the Reserve Bank of Australia -- which ended 2014 with a message to financial markets that interest-rate stability was likely to feature again in 2015, to help underpin certainty for businesses and support the economy as a mining-investment boom fizzles out. Gov. Glenn Stevens said the decision to come off the sidelines for the first time in 18 months was driven by concern that Australia's resource-rich economy was facing another year of below-average growth. The Australian dollar fell sharply on the announcement of a cut, dropping to a fresh 5 1/2-year low, and the stock market surged to the highest level since May 2008. Nations cutting interest rates or engaging in stimulus measures are hoping to boost domestic growth and employment by weakening their currencies, making exported goods more competitive overseas. Still, currency depreciation also raises the risk of a tit-for-tat race to the bottom, as trading partners seek to outdo one another only to find gains are limited. "Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns reaching new all-time lows over recent months," Mr. Stevens said. The case for a rate cut was strengthened by recent inflation data, which showed an absence of price pressures in the economy. With the falling world-oil price also driving lower gasoline prices at the pump, the central bank can safely bet on weak inflation readings for some time. The Reserve Bank of Australia joins the Monetary Authority of Singapore, Reserve Bank of New Zealand, European Central Bank, Bank of Canada and the central banks of India, Denmark and Switzerland in either announcing substantial shifts or easing monetary settings since Jan. 1. Credit: By James Glynn
Subject: Central banks; Monetary policy; Banking
Location: Australia
Company / organization: Name: Reserve Bank of Australia; NAICS: 522110; Name: Bank of Canada; NAICS: 521110; Name: European Central Bank; NAICS: 521110; Name: Reserve Bank of New Zealand; NAICS: 521110; Name: Monetary Authority of Singapore; NAICS: 521110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.9
Publication year: 2015
Publication date: Feb 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650397829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650397829?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China's Energy Companies Tighten Their Belts as Oil Prices Plunge; Recent Pullback Partly Due to Anticorruption Drive, Slowing Growth
Author: Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Separately, a joint venture between the Chinese oil company and Talisman Energy Inc. of Canada is laying off several hundred staff and contractors in the U.K. Oil companies in China emerged as . [...]Chinese companies' moves might have little impact on easing the gap between global supplies and demand, said Mr.\n
Full text: BEIJING--When oil prices surged near record highs in recent years, China's state-owned energy companies bet prices could climb even higher. They paid top dollar for assets around the world and pushed aggressively to develop new resources at home. Now, as oil prices have lost about half their value in less than a year, China's largest energy companies are in the midst of a rare pullback. Cnooc Ltd.--the listed arm of China's main state-owned, offshore oil and natural-gas producer--said Tuesday that it plans to cut capital spending by a range of 26% to 35% in 2015 compared with a year earlier, its first such drop since 2010. The company could be facing write-downs of more than $5 billion related to its 2013 acquisition of Nexen Inc. of Canada, according to J.P. Morgan. Cnooc said its integration with Nexen was proceeding as planned, but declined to comment on the estimate. China National Petroleum Corp., the nation's biggest oil and natural-gas producer, is pledging "revolutionary measures" to cut costs. Meanwhile, Sinopec Group says it wants to develop 3-D printing and clean-energy technology to diversify its business. Separately, a joint venture between the Chinese oil company and Talisman Energy Inc. of Canada is laying off several hundred staff and contractors in the U.K. Oil companies in China emerged as . Chinese companies have bought more than $100 billion in oil and natural-gas assets since 2011, according to data provider Dealogic. But today, the promise of Chinese money isn't guaranteed. "At least in the near term, oil- and gas-rich countries that used to count on Chinese investment will have to look elsewhere for investment once oil prices rebound," said Bo Kong, an expert on China's state-owned energy companies at the University of Oklahoma. China's cuts come as . Malaysia's Petroliam Nasional Bhd., known as Petronas, has warned of double-digit cuts in capital spending this year. Indonesia's Pertamina said it might cut its investment as much as 50% this year. The chairman of Sinopec, Fu Chengyu, has in recent years built a reputation for himself as an aggressive overseas deal maker. But when Mr. Fu addressed top Sinopec brass earlier last month, he struck a more sober tone. The company "must recognize the new normal," Mr. Fu told company leaders, invoking a new Communist Party mantra meaning slower economic growth is ahead. Sinopec said the meeting allowed executives to understand the "grim circumstances" facing the company. Much of the Chinese oil industry began paring back last year before oil prices plunged, the result of an anticorruption campaign that helped curtail Chinese deal-making. Lower prices are adding pressure on China's oil companies to hold off on spending. Such challenges for China's state oil companies "will only become more serious as the low prices continue," said Kang Wu, vice chairman for Asia at FACTS Global Energy, a consultancy. China's oil companies now have greater exposure to global price swings because of their international footprints, while depleted fields at home mean rising production costs. "They are bracing for a year that is likely to be tough," he said. Lower oil prices have already hurt these companies. Cnooc's third-quarter revenue from oil and gas output fell 4.6% year-to-year to 53.6 billion yuan ($8.6 billion), while net profit at PetroChina declined 6.4% to 27.9 billion yuan from 29.8 billion yuan a year earlier. After years of spending increases, PetroChina has been slashing expenditures to support profits. That is partly because global oversupply means the challenge of satisfying China's growing energy needs is less acute than previously. In January, Zhou Jiping, chairman of PetroChina parent CNPC, promised "revolutionary measures" to cut costs. J.P. Morgan expects capital spending at PetroChina to fall 7% to 270 billion yuan this year, its lowest since 2009. PetroChina said in a written statement that it had stepped up control of its spending, and "shifted its focus from scale expansion to the quality and profitability of its investments." The pullback in part reflects China's slowing growth. China's gross domestic product rose 7.4% last year, its slowest pace of growth in a quarter-century. The International Energy Agency forecasts demand for oil products such as gasoline and diesel in China will grow 2.5% in 2015, down from 2.7% a year earlier. Despite the challenges, China's oil companies are likely to continue to grow, reflecting the forward march of China's economy and its increasing energy needs. Depressed prices are hurting oil companies globally, and the industry is watching whether Chinese companies will make timely acquisitions. Chinese companies have been active investors abroad in recent years, but their contributions to global oil supplies remain modest compared with big producers such as the U.S. and Saudi Arabia. As a result, Chinese companies' moves might have little impact on easing the gap between global supplies and demand, said Mr. Kong, the University of Oklahoma professor. A spending binge when oil prices were high means China's oil companies face added pressure to digest new assets. For the past two years, Cnooc and its chairman, Wang Yilin, were celebrated in China for the company's acquisition of Canadian oil producer Nexen. The $15.1 billion deal marks China's biggest overseas energy acquisition to date. Today, Nexen and other overseas assets acquired during the past five years are emerging as heavy weights for Cnooc, especially as oil prices have plunged. J.P. Morgan says Cnooc could be facing more than $5 billion in write-downs related to its Nexen portfolio. Cnooc said in a written statement Tuesday that despite sharp capital-spending cuts, it would still meet oil-production growth targets through "cost control and efficiency enhancement." The company said it aimed to produce 475 million barrels to 495 million barrels of oil equivalent in 2015, up from an estimated net production of 432 million barrels of oil equivalent last year. Write to Brian Spegele at Credit: By Brian Spegele
Subject: Petroleum industry; Prices; Capital expenditures; Natural gas; Economic growth; Gross Domestic Product--GDP
Location: China
Company / organization: Name: CNOOC Ltd; NAICS: 211111; Name: JPMorgan Chase & Co; NAICS: 522110, 522292, 523110; Name: Petronas; NAICS: 211111; Name: University of Oklahoma; NAICS: 611310; Name: China Petrochemical Corp; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650458853
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650458853?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Russia Sees Marginal Increase in Oil Output in 2015; Oil Price Rout Has Battered Russia
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
The oil price rout has battered Russia, one of the world's biggest oil producers along with Saudi Arabia and the U.S., at a time when its economy was already suffering from sanctions imposed by the West over the conflict in Ukraine, as well as the depreciation of the ruble.
Full text: Russia envisages a marginal increase in oil production in 2015 despite the global slump in prices, according to the Ministry of Energy's latest projections. The oil price rout has battered Russia, one of the world's biggest oil producers along with Saudi Arabia and the U.S., at a time when its economy was already suffering from sanctions imposed by the West over the conflict in Ukraine, as well as the depreciation of the ruble. Russia produced an average of 10.58 million barrels of crude a day in 2014, a level of output not seen since the end of the Soviet Union. The Ministry of Energy expects average daily output in 2015 to reach 10.6 million to 10.7 million barrels a day, "approximately at the same level" as last year, a ministry spokeswoman said. The spokeswoman said the government's forecasts will be updated next week. Oil output in January reached 10.66 million barrels a day, a slight deceleration from December when it stood at 10.67 million barrels a day, according to the ministry. Some analysts, however, are skeptical that Russia can keep that level of production. Richard Mallinson, a researcher at Energy Aspects in London, said one of the main challenges is maintaining investment in new projects as output from Russia's mature oil fields declines. "The impact of the sanctions also complicates the development of new projects and in fact Russia probably won't bring new large fields online in 2015," Mr. Mallinson said. He expects Russian output this year to slip to "just under 10.5 million barrels a day" and the decline to accelerate next year. On the plus side, the depreciation of the ruble makes it relatively cheaper to produce oil in Russia helping to preserve oil-company margins. Write to Georgi Kantchev at Credit: By Georgi Kantchev
Subject: Petroleum industry; Petroleum production; Cartels
Location: Russia Union of Soviet Socialist Republics--USSR United States--US Ukraine Saudi Arabia
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650513627
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650513627?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Obama Budget Would Pour Funds Into Climate, Renewable Energy; Proposal Calls for Repeal of Nearly $50 Billion in Oil, Natural-Gas and Coal Tax Breaks
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
Mr. Obama separately proposed $1.29 billion go toward his administration's global climate efforts, part of which would go toward a pledge from late last year to commit Mr. Obama's budget proposes repealing a raft of oil, natural-gas and coal tax deductions that the administration estimates would raise nearly $50 billion for the federal government over the next decade.
Full text: WASHINGTON--President Barack Obama's fiscal 2016 budget plan would pour billions of dollars into climate-change and renewable-energy technologies, and repeal nearly $50 billion in tax breaks from the oil, natural-gas and coal industries. The budget proposal, released Monday, underscores an intensifying push by Mr. Obama on his climate agenda, which he hopes to cement as a presidential legacy in his final two years in office. While many of Mr. Obama's energy and environmental plans have been included in prior year proposals, the 2016 proposal includes a new $4 billion fund, dubbed the Clean Power State Initiative Fund, to help states comply with draft Environmental Protection Agencyregulations cutting carbon emissionsfrom U.S. power plants. The fund, which would cost $4 billion over the next decade, would encourage states to exceed the minimum requirements of rules the EPA is expected to complete this summer. The fund is likely to incite opposition from congressional Republicans, who control Congress. Hamstringing EPA's climate regulations is a top goal of Senate Majority Leader Mitch McConnell (R., Ky.), who represents a state heavily dependent upon coal for energy production and electricity. Mr. McConnell has said one way he will try to stop the EPA's climate regulations will be by cutting off its funding. The EPA would administer the fund and proposed it not be subject to spending restrictions from an existing budget deal known as sequestration. The administration proposes an overall EPA budget at $8.6 billion, or 5.8% greater than and more than 8% higher than what the administration . The new fund would be in addition to those figures. The EPA budget also proposes $239 million to support the agency's climate agenda and $25 million to help states comply with its rule on power plants. The administration proposed some cuts to EPA's budget, including $54 million off $2.4 billion of EPA programs that help localities pay for clean drinking water and sewer projects, and $50 million from a $300 million initiative to restore the Great Lakes. Mr. Obama separately proposed $1.29 billion go toward his administration's global climate efforts, part of which would go toward a pledge from late last year to commit Mr. Obama's budget proposes repealing a raft of oil, natural-gas and coal tax deductions that the administration estimates would raise nearly $50 billion for the federal government over the next decade. Most of that amount--$45.5 billion--comes from the oil and natural-gas sector. The president has repeatedly called to repeal these tax breaks in his previous budgets. Also reaffirming earlier budget blueprints, the plan proposes to permanently extend a tax credit for wind energy and a tax credit for solar power, which together would cost the government $31.5 billion over the next decade. The wind credit expired at the end of 2013, and Congress must vote to renew it. The solar industry's credit expires at the end of 2016. Republicans in Congress are generally opposed to the renewable-energy tax incentives, as well as repeal of the oil and gas tax breaks. The Obama budget calls for increasing the Energy Department's budget nearly 10% over current levels to $29.9 billion. The National Nuclear Security Administration, the agency responsible for safeguarding the nation's nuclear weapons, takes up the bulk of the department's budget. The overall budget proposal would provide $7.4 billion for clean-energy programs primarily within the Energy and Defense departments, which is up 13.8% from current levels. Mr. Obama also proposed an increase of 12.8% for the Interior Department to $13.2 billion. The proposal calls for the elimination of $3.1 billion in certain payments to oil, natural-gas, coal and other mineral development on public lands and in federal waters over the next decade. One policy that hasn't been requested before is an Interior proposal to redirect future oil and natural-gas drilling revenue that benefits four states along the Gulf Coast. "There is a small portion of the Gulf where there is revenue-sharing for certain Gulf states, and we believe that should be re-examined to what is a fair return to taxpayers," Interior Secretary Sally Jewell said Monday. Alabama, Louisiana, Mississippi and Texas currently receive 37.5% of the revenue generated from oil and gas production off their coasts and are set to get an increase in 2018. Mr. Obama's budget blueprint would redirect some of that funding to other uses, including conservation efforts that benefit the entire nation, and bring an additional $3 billion to the federal government's coffers. Write to Amy Harder at Corrections & Amplifications President Barack Obama proposed $1.29 billion go toward his administration's global climate efforts, part of which would go toward a pledge from late last year to commit $3 billion for an international fund. An earlier version of this article incorrectly said the full $1.29 billion would go to the fund. Credit: By Amy Harder
Subject: Energy policy; Natural gas; Tax cuts
People: Obama, Barack McConnell, Mitch
Company / organization: Name: Congress; NAICS: 921120; Name: Environmental Protection Agency--EPA; NAICS: 924110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650514827
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650514827?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Rally; Dow Up 305 Points; Rising Oil Prices Boost Energy Shares
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
The gain in oil prices, paired with a drop in Treasury prices and upbeat news out of Europe, helped soothe investor concerns about slowing global economic growth, said Jim McDonald, chief investment strategist at Northern Trust Corp. Falling oil prices and low interest rates are generally seen as good for stocks, since they reduce costs for businesses and consumers.
Full text: U.S. stocks rallied Tuesday, as a rise in oil prices helped lift energy shares. The Dow Jones Industrial Average advanced 305.36 points, or 1.8%, to 17666.40. The S&P 500 gained 29.18 points, or 1.4%, to 2050.03, and the Nasdaq Composite Index rose 51.05 points, or 1.1%, to 4727.74. Stocks extended gains in afternoon trading as U.S. crude-oil futures climbed 7% to end at $53.05 a barrel . Energy stocks led the S&P 500 higher, rising 2.8% and marking a fourth-straight advance. Shares of Exxon Mobil Corp. and Chevron Corp. were among the top performers in the Dow, up 3% and 3.3%, respectively. The gain in oil prices, paired with a drop in Treasury prices and upbeat news out of Europe, helped soothe investor concerns about slowing global economic growth, said Jim McDonald, chief investment strategist at Northern Trust Corp. Falling oil prices and low interest rates are generally seen as good for stocks, since they reduce costs for businesses and consumers. But investors have been worried that declining commodity prices and interest rates signal a steep growth slowdown in Europe and Asia. Treasury prices fell Tuesday, pushing the yield on the 10-year note up to 1.781% from 1.669% on Monday. "Today, rising oil prices and rising interest rates [are] a positive," said Mr. McDonald, whose firm manages $934 billion. "Investors have been frightened that falling commodity prices were reflecting a major downturn in the global economy." European stocks also rallied , amid hopes of a resolution to the standoff between the new Greek government and its creditors . U.S. investors have been keeping a close eye on Europe in recent months, as they worried about deflation and political tensions. Now, concerns about Greece are subsiding, shortly after the European Central Bank introduced fresh stimulus to stoke inflation. Greek stocks jumped 11%, Germany's DAX 30 gained 0.6% to a record high, and France's CAC 40 added 1.1%. In the U.S., the advance extended a gain from Monday, when indexes rallied at the end of the session. Traders said the move was driven by investors who are buying to avoid missing out on gains if stocks continue to rise. "They don't want to miss the bus," said Jonathan Corpina, senior managing partner at brokerage firm Meridian Equity Partners. Steep swings have been more common for U.S. stocks this year, amid worries about global growth and shifting central-bank policies. But many of the large stock-market moves have been short-lived. For example, benchmarks have moved more than 1% in each of the past six sessions, but are now close to where they started that string of volatile trading. The S&P 500 is down just 0.3% since Jan. 26, and the Dow has lost less than 0.1% in that time. "Volatility is very well entrenched in this market," said Mr. Corpina. That shows that investors' opinions have been changing quickly, he said. "The negative to that is, it shows how uncommitted investors are...the investment horizon has gotten short." One big question is how much the recent oil-price dive and a strengthening U.S. dollar will weigh down corporate profits later this year, strategists say. As oil prices fall, fourth-quarter earnings of S&P 500 energy companies are expected to shrink 23% from last year, according to FactSet. Broadly, the S&P 500 is on pace to grow earnings by 2.3%, the slowest pace since 2012. "Earnings aren't that great. They've sort of stalled out," said John Manley, chief equity strategist at Wells Fargo Asset Management. Earnings "have been a supporting factor" for stocks, so he expects "more of the same volatility." In economic news, December factory orders fell 3.4%, more than the 2.5% decline forecast. Investors are looking ahead to high-profile data later in the week, including Friday's nonfarm-payrolls report for January. Staples Inc. and Office Depot Inc. are in advanced talks to combine, The Wall Street Journal reported . Office Depot absorbed rival OfficeMax in 2013. Staples shares jumped 11%, and Office Depot shares surged 22%. Ford Motor Co. and General Motors Co. gained 2.5% and 2.6%, respectively, after global auto makers said their U.S. sales grew in January , which is normally a slower month for the industry. United Parcel Service Inc. edged up 0.4%, lagging the broader market after it provided a 2015 earnings forecast that was at the low end of Wall Street's expectations. BP PLCposted a loss in the fourth quarter , the first of the world's giant oil companies to do so amid the slump in oil prices. Still, BP's underlying earnings, which factor out one-time items, beat analysts' expectations. The company announced an increased dividend. U.S.-listed shares rose 3.1%. In other markets, gold futures lost 1.3% to $1259.70 an ounce. Write to Alexandra Scaggs at alexandra.scaggs@wsj.com Credit: By Alexandra Scaggs
Subject: Petroleum industry; Interest rates; Prices; Investments; Stocks; Energy industry
Location: United States--US Europe
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: European Central Bank; NAICS: 521110; Name: Northern Trust Corp; NAICS: 522110, 551111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650530677
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Copper Posts Biggest Daily Gain in Nearly 2 Years; Boosted by Soaring Oil Prices, Expectations of China Stimulus Measures
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
A persistent slowdown in China's manufacturing sector has sparked speculation that the country could launch a series of infrastructure projects, as they have in the past, in a bid to buoy the economy of the world's largest copper consumer.
Full text: Copper prices closed with their highest gain in nearly two years Tuesday, lifted by soaring oil prices and expectations that China would use stimulus measures to kick-start its economy. Copper for March delivery, the most actively traded contract, settled up 3.7% to $2.5815 a pound on the Comex division of the New York Mercantile Exchange, its sharpest rally in percentage terms since May 3, 2013. Front-month Nymex crude futures as a U.S. refinery strike pushed up prices for petroleum products. Oil's rally prompted a rush into other commodities, including copper, which had fallen to a 5½-year low in recent weeks as investors worried that slowing global economic growth would dull demand for the metal. Tuesday's sharp turnaround in copper prompted investors who had expected a decline in the metal's price to pull back their bets, sending prices higher in a phenomenon known as a short squeeze. "The market was quite short copper, and this turnaround caught traders by surprise," said Bart Melek, head of commodities strategy at TD Securities. Bets by hedge funds and other speculative investors on copper's decline outnumbered those on the metal's rise for the 19th straight week in the period to Jan. 27, data from the CFTC showed Friday. Investors also piled into the metal amid speculation that a persistent slowdown in China's manufacturing sector would push the country to launch a series of infrastructure projects in a bid to buoy the economy, as they have done in the past. In January, China's recorded its first contraction in more than two years. "We're in this perverse world where bad news is good news," said Stephen Briggs, an analyst at BNP Paribas. "A lot of people are thinking China's going to join the rest of the world and lower interest rates or [offer] some kind of monetary response at least." Stimulus measures, such as housing construction or power-grid expansion, would increase the need for copper pipes and wiring in China, the world's largest copper consumer. Copper prices also got a boost from a weaker dollar. The industrial metal is priced in dollars, and becomes less expensive to foreign investors when the greenback rises. The Wall Street Journal Dollar Index, which gauges the dollar against a basket of 16 currencies, was recently down 0.9% to 84.91. Ese Erheriene contributed to this article. Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Subject: Supply & demand; International finance; Copper
Location: China
Company / organization: Name: BNP Paribas; NAICS: 522110; Name: London Metal Exchange; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650541504
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650541504?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Government Bonds Flag as Oil Prices, Greece Signals Buoy Investors; Treasurys Suffer Biggest One-Day Selloff Since November 2013
Author: Zeng, Min
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
U.S. government bonds suffered the biggest one-day selloff on Tuesday since November 2013 as worries over Greece's future in the eurozone receded and U.S. crude oil prices soared by 7%.
Full text: U.S. government bonds suffered the biggest one-day selloff on Tuesday since November 2013 as worries over Greece's future in the eurozone receded and U.S. crude oil prices soared by 7%. Greek shares and bonds soared as financial markets welcomed the Greek government's bond-swap proposal with international creditors. Investors took it as a sign Greece is stepping back from brinkmanship and reducing the risk of departing the monetary union, a case analysts have warned would cause market turmoil. "It looks like Greece's governing Syriza party is committing to negotiations over debt," said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC. "That triggered buying in European equities and selling in global interest-rate markets, including Treasury bonds." In late-afternoon trading, the yield on the benchmark 10-year note climbed to 1.781%, compared with 1.669% on Monday, the lowest closing level since May 2013. The yield on the 30-year bond jumped to 2.372% from a record closing low of 2.25% on Monday. Bond prices fall as their yields rise. An interest-rate cut from Australia's central bank on Tuesday also boosted investors' appetites for risk and dimmed the allure of Treasury debt, traders said. Other haven bond markets--Germany, the U.K. and Japan--also pulled back. Demand for a 10-year Japanese government bond fell to the lowest since 2013 Tuesday, which also contributed to selling in U.S. government bonds, said traders. Tuesday's selling in Treasury bonds represents a minor setback. The 10-year Treasury yield has tumbled from 2.173%, where it traded at the end of 2014. Demand for haven bonds has soared due to an uncertain global growth outlook and deflation risks in Europe. U.S. government bonds offer more attractive yields compared with government bonds in Germany, the U.K. and many other developed countries. A rising dollar against the euro over the past year has enabled European buyers to pick up extra gains in their investments in U.S. financial assets. While roaring bond prices have chalked up strong capital gains for bond buyers, lower yields mean investors have to make do with less income, pushing many toward riskier bonds with higher yields. Some investors caution that slim yields offer a thin layer of protection against the risk of capital losses if sentiment sours on the bond market. U.S. crude oil prices have jumped over the past three sessions and bounced off the lowest level since 2009. Investors bet that a sharp decline in U.S. drilling activity will balance the oversupplied global market. While analysts cautioned that the rebound in prices may not prove to be sustainable, higher crude prices encouraged investors to shed haven bondholdings to embrace riskier assets Tuesday. Greece's financial markets rallied. The yield on the 10-year Greek government bond tumbled by nearly 1.6 percentage points to 9.811%, falling from Monday's peak of 11.81%, according to Tradeweb. The brighter tone rippled into government bonds in other weaker economies of the eurozone. The yield on the 10-year Portugal government bond dropped by 0.08 percentage point to 2.385%. The yield on the 10-year government bond in Italy fell to 1.590%. Write to Min Zeng at Credit: By Min Zeng
Subject: Bond markets; Government bonds; Capital losses; Monetary unions; Crude oil prices; Eurozone
Location: Greece United States--US United Kingdom--UK Germany
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650541516
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650541516?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
BP's Cuts May Wound Portfolio Recovery; Focus on Importance of Dividend Should Reassure Investors Rattled by Oil Price Drop
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
More important, BP came up with its promised $30 billion in operating cash flow, excluding movements in working capital, which just about covered investment and dividends.
Full text: BP doesn't lack experience in handling a crisis. The U.K. oil and gas company for this year to $20 billion, down from earlier guidance of $24 to $26 billion and 13% lower than 2014's total. Allied and an emphasis on the importance of its dividend, that should reassure investors rattled by oil's drop. But BP also risks sharpening focus on its longer-term dilemma. Despite ongoing legal wrangling in the U.S. , BP delivered much of what it said it would in 2014. Accounting changes by Rosneft, in which BP owns a 20% stake, unexpectedly helped BP's underlying profit in the fourth quarter. More important, BP came up with its promised $30 billion in operating cash flow, excluding movements in working capital, which just about covered investment and dividends. Curtailing spending should help BP tough out a period of lower oil prices. The average price so far this year, at $48 a barrel, is 38% below that of the fourth quarter. BP's rules of thumb imply that, if sustained, that level would knock about $6 billion from the fourth quarter's annualized cash flows, leaving BP with a haul of about $22 billion this year. After dividends of $6 to $7 billion, BP would need asset sales or increased borrowing to fund even its reduced spending plans. The bigger problem is lingering questions about the overall quality of BP's portfolio. Its retrenchment since 2010s Macondo disaster is both a blessing and a curse. BP shed smaller, more mature assets that would likely be unattractive at current oil prices. But after years of forced thrift, the company also can't look forward to rising output on the back of past spending. Even before the latest cuts, the company had the lowest projected annual upstream growth of the European oil sector at just 1.6% from 2014 to 2019, according to Sanford C. Bernstein. BP, with its expertise in deep-water drilling, also hasn't plowed as much into long-life projects that, once the high initial investment is made, enjoy stable output without high decline rates. BP plans to address that, investing in giant natural gas fields in Oman and Azerbaijan. But meanwhile it must work harder to stand still, replacing output from fast-declining deep-water wells. That rivals have chosen to sell their stakes in some key BP projects, such as Shah Deniz stage 2, exacerbates concerns about the quality of its development pipeline. And deteriorating relations between Russia and the West have revived uneasiness that the long-term potential of the stake in Rosneft, which , may remain just that. BP can't do much more than batten down the hatches given oil's swift descent. But when the storm passes, the company faces an ever-tougher repair job. Write to Helen Thomas at Credit: By Helen Thomas
Subject: Petroleum industry; Investments
Location: United States--US United Kingdom--UK
Company / organization: Name: OAO Rosneft; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650549041
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650549041?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gold Falls as Haven Demand Squelched by Greek Plans; Higher Oil Prices, Stocks Also Soothed Worries About the Global Economy, Hurting Gold
Author: Iosebashvili, Ira
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
A sharp rise in oil prices and stock markets also helped soothe worries about the global economy and sapped interest in gold, investors said.
Full text: Gold prices fell Tuesday, as hopes for an imminent resolution between the new Greek government and its creditors tempered demand for the safe-haven metal. Gold for April delivery, the most actively traded contract, closed down $16.60, or 1.3%, at $1,260.30 a troy ounce on the Comex division of the New York Mercantile Exchange. A Greek official said Tuesday that Athens was working on a "road plan" to lessen the burden of his country's hefty debt pile, and he hoped to have an agreement with Greece's creditors by the beginning of June. The comments led some traders to sell gold, which had seen demand amid worries that Greece's new antiausterity government would clash with officials from other European countries, raising political uncertainty in the region. A sharp rise in oil prices and stock markets also helped soothe worries about the global economy and sapped interest in gold, investors said. Global oil prices were recently up 7.2% at $58.68 a barrel, while the Dow Jones Industrial Average was up 1.6% at 17,640.95. "Gold just doesn't look very good as an alternative asset right now," said Bill O'Neill, a broker at Logic Advisors. "The gold market needs a steady stream of bad economic news if it's going to stay up." Investors had been buying gold in recent sessions after crude-oil prices tumbled and spurred concerns about how lower energy costs would affect global markets. Some traders view gold as a haven from political and economic turbulence, believing it will keep its value better than other assets. Expectations of higher interest rates in the U.S. this year have weighed on prices for the precious metal, which has a hard time competing with yield-bearing assets when monetary policy tightens. Write to Ira Iosebashvili at Credit: By Ira Iosebashvili
Subject: Gold markets; Investments; International markets
Location: Greece
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650549065
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650549065?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Shares of Brazil's Petrobras Jump on News of CEO's Possible Departure; Spokeswoman for President Rousseff Only Confirms Meeting With Oil Giant's Embattled Chief Executive
Author: Magalhaes, Luciana; Kiernan, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--Shares of Brazilian state-controlled oil giant Petróleo Brasileiro SA shot up more than 15% in afternoon trading Tuesday following a published report that the company's embattled chief executive may soon resign amid a widening corruption investigation. The stock has been up since the morning but it gained even more after news that Brazilian President Dilma Rousseff and Petrobras CEO Maria das Graças Foster had met Tuesday afternoon at the presidential palace. The meeting has been confirmed by a spokeswoman for Ms. Rousseff, although the subject of their talk wasn't disclosed. Brazilian newspaper Folha de S. Paulo reported earlier Tuesday that President Rousseff has decided to replace the Petrobras CEO. The article didn't cite a source for the information that Ms. Foster would resign. Petrobras declined to comment. Ms. Rousseff's office denied the report. Calls for a shake-up of Petrobras' senior management have been building since federal prosecutors said last year that the company was at the heart of involving construction firms and Brazilian politicians between 2004 and 2012. , including one former Petrobras executive who says he and several colleagues took bribes. Petrobras says it is cooperating with investigators. Ms. Foster hasn't been implicated in the scandal. Calls for a change at the top grew even louder after Petrobras last week without disclosing the estimated impact of the alleged corruption scheme, as planned. Moody's promptly . Ms. Foster has said she supports the investigation. The company's board of directors has also appointed a director of governance, risk and compliance to ensure risk mitigation and compliance with rules. Petrobras' preferred shares in São Paulo recently traded 14.3% higher at 9.90 reais. Ms. Rousseff is a close friend of Ms. Foster's and has sought to keep the executive in her position. Ms. Foster told reporters in December that but stayed on at the president's behest. But pressure has been growing within Ms. Rousseff's Workers' Party to change leadership at Petrobras, according to a person familiar with the situation. Ministers close to Ms. Rousseff have privately expressed doubts about Ms. Foster's ability to restore Petrobras' credibility, the person said. Paulo Trevisani in Brasília contributed to this article. Write to Luciana Magalhaes at and Paul Kiernan at Credit: By Luciana Magalhaes and Paul Kiernan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650561752
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Fighting Resumes Near Libya's Largest Oil Port; Islamic State Claims Monday Attack in Capital Tripoli
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract: None available.
Full text: Fighting between rival militias resumed close to Libya's largest oil port on Tuesday, while Islamic State claimed another attack in Tripoli, as the country further descends into lawlessness. Islamic State's Tripoli faction had already said it was behind an attack on the upmarket Corinthia hotel in the capital last week that killed nine people, including an American. Clashes erupted at the Sidra oil terminal between Dawn, an Islamist militia that controls the capital Tripoli, and forces loyal to the internationally recognized government based in the east of the country, according to the Facebook pages of both factions and Libyan oil officials. Dawn said it was making military progress and inflicted heavy casualties on the troops of Gen. Khalifa Hifter, who supports the legitimate government. It also said one of its fighters had died and nine had been wounded. The First Brigade of the Libyan National Army--led by Gen. Hifter--only acknowledged that fighting had erupted near Sidra. There was no official confirmation of casualties in the fighting. The oil port, situated in eastern Libya, normally exports 400,000 barrels a day--about a third of Libya's capacity, but it has been out of operation because of damage caused by fighting in December. In recent months, the Islamist faction, which has seized Tripoli, has fought the internationally recognized government for control of the country's vital oil industry. On Tuesday, a group calling itself Islamic State's Tripoli Province, using Islamic State's main Twitter account, claimed responsibility for the bombing of a military vehicle on Monday in Tripoli. Attacks by Islamic State in Libya raise fears that the reach of the extremists is spreading beyond Syria and Iraq. Write to Benoît Faucon at Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650561760
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Economists Lower Forecasts for Mexican Growth and Inflation; Central Bank Survey of Experts Cites Lower Oil Prices and Slower Consumer Price Rises
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
MEXICO CITY--Economists surveyed in January by the Bank of Mexico lowered their estimates for economic growth and inflation in 2015, following a sharp drop in oil prices and a slowdown in consumer price increases at the start of the year.
Full text: MEXICO CITY--Economists surveyed in January by the Bank of Mexico lowered their estimates for economic growth and inflation in 2015, following a sharp drop in oil prices and a slowdown in consumer price increases at the start of the year. The Mexican economy is likely to grow 3.3% in 2015, according to the median estimate of 33 economists polled last month by the central bank, down from the 3.5% forecast in December. The lower growth estimate in the survey published on Tuesday follows a sharper decline in crude oil prices in recent months, although the estimates were received before the government decided last weekby around $8.3 billion, or 0.7% of GDP. Mexico is a major oil producer. The Bank of Mexico uses monthly surveys to gauge market expectations in setting monetary policy. Economists lowered their growth estimates for Mexico throughout 2014, and now expect GDP to have expanded 2.2% last year, compared with initial expectations of 3.5%. The National Statistics Institute is scheduled to report fourth-quarter GDP on Feb. 20. Meanwhile, Citigroup's Mexican banking unit Banamex said in a report that the decision to cut spending and review the 2016 budget plan could lead to greater investor confidence and lower interest rates. "In the context of increased uncertainty, not only about oil prices but also about international financial conditions, sending a signal of fiscal discipline is especially valuable," Banamex said in a report, but added that the cuts add downside risk to its GDP growth estimate of 3.4%. Finance Minister Luis Videgaray said last week that the impact of the budget reduction on growth is likely to be small, and the Finance Ministry stuck to its estimate of 3.2%-4.2% economic growth in 2015. The Bank of Mexico also reported on Tuesday that remittances from Mexicans living abroad jumped 18.8% in December, compared with a year before, to $2.2 billion. Mexicans living in the U.S. typically take advantage of a weaker peso to send more money home to their families, who receive more pesos for each dollar. Remittances, which account for about 2% of GDP, bring in more foreign currency than tourism, helping to limit Mexico's current account deficits and contributing to private consumption. The peso's depreciation accelerated in December, with the currency ending the month at around 14.75 to the U.S. dollar, an 11% depreciation from the year before. For all of 2014, remittances rose 7.8% to $23.6 billion. Goldman Sachs said December remittances grew about 32% in peso terms, and it expects further gains this year, supported by the outlook for growth and employment in the U.S. "Firming workers' remittances add support to the current account and to hitherto-sluggish private consumption [in Mexico], particularly to low-income families, which have a high propensity to consume and which are the overwhelming recipients of such transfers," Goldman Sachs said in a note. The economists polled in January by the Bank of Mexico expect the peso to end this year at 14.15 to the U.S. dollar. The peso recently traded in Mexico City at a rate of 14.7570. The lower 2015 growth estimate was coupled with a drop in expectations for inflation this year, which fell to 3.15% from 3.50% in the December survey. Inflation measured by the consumer-price index slowed sharply in the first half of January, with the CPI up 3.08% in the preceding 12 months, compared with 4.08% at the end of 2014. The absence of tax increases this year, and the elimination of domestic long-distance phone charges contributed to the slowdown. In, the Bank of Mexico said it expects the CPI to end the year below its 3% target. Write to Anthony Harrup at Credit: By Anthony Harrup
Subject: American dollar; Monetary policy; Banks; Consumer Price Index; Propensity to consume; Estimates; Crude oil prices; Economic growth; Gross Domestic Product--GDP; Economists; Remittances
Location: United States--US
People: Videgaray, Luis
Company / organization: Name: Citigroup Inc; NAICS: 551111; Name: Bank of Mexico; NAICS: 522110; Name: Goldman Sachs Group Inc; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650587094
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650587094?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
EPA Says Low Oil Prices Should Be Weighed in Keystone Decision; Environmental Agency Asks State Department to Revisit Conclusions About Oil Consumption, Emissions
Author: Harder, Amy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract: None available.
Full text: WASHINGTON--The Environmental Protection Agency said the government should factor in the recent trend of lower oil prices as part of its decision on whether to approve the Keystone XL pipeline. The EPA, in a letter sent Monday to the State Department, said the monthslong drop in oil prices should compel the department to "revisit" conclusions about U.S. oil consumption and greenhouse gas emissions it made in an environmental assessment published in January 2014, which found the pipeline wouldn't significantly add greenhouse gas emissions to the atmosphere. The State Department oversees cross-border pipelines and is in the process of deciding whether the Keystone project should receive a permit. Cynthia Giles, EPA's assistant administrator for enforcement and compliance assurance, said in the letter that building the pipeline at a time of lower oil prices could prompt production of more oil from Canada's oil sands deposits. The letter said the 2014 environmental assessment had concluded that sustained oil prices of $65 to $75 a barrel would cause the pipeline to "change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur." Oil prices are even lower now--at about $55 a barrel on Tuesday, down from about $100 a barrel when the environmental assessment was released. Current oil prices aren't expected to curtail growth in oil sands production for a couple of years, but an extended slump in crude prices could prompt operators to defer investment in new oil sands projects. The projects have a range of break-even points from below $40 a barrel for the most efficient existing operations to above $90 per barrel for development of brand new sites. President Barack Obama has said that he would approve Keystone only if it didn't "significantly exacerbate" climate change, a test he first placed on the project in 2013 and has since repeated several times. "The State Department has long monitored oil prices and will certainly consider market conditions as one of the economic factors in the national interest determination," a department official said. TransCanada Corp., the Canadian company behind the project, first submitted an application for the pipeline in 2008. If built, it would carry up to 830,000 barrels of oil a day, mostly from Canada's oil sands to Steele City, Neb., to connect with existing pipelines, creating a system that stretches from Canada to the Gulf Coast spanning 1,700 miles across six U.S. states. Congress, meanwhile, is close to final approval of legislation to force approval of the project. The White House has said Mr. Obama would veto the bill, a final version of which is expected to clear the House soon and be sent to the president. Chester Dawson contributed to this article. Write to Amy Harder at Credit: By Amy Harder
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650607035
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dollar Falls Against Euro; Greenback Also Down Against Canadian Dollar, Norwegian Krone as Oil Rebounds
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]03 Feb 2015: n/a.
Abstract:
The U.S. currency also fell against the Canadian dollar and the Norwegian krone as investors took profits on strong-dollar bets that falling oil prices would continue to weigh on the economies of oil producers, said Marc Chandler, global head of currencies at Brown Brothers Harriman & Co. Oil prices had slid nearly 60% from their June peak amid a global oversupply of crude.
Full text: The dollar tumbled against the euro Tuesday as Greece's debt efforts soothed traders' concerns about the future of the eurozone, while a rally in crude prices boosted currencies connected to oil-exporting economies. The euro jumped to its strongest level in more than a week, rising 1.3% to $1.1483 in late-afternoon trade. The U.S. currency fell 1.3% against the Canadian dollar, to C$1.2399, and dropped 1.8% versus the Norwegian krone, to 7.5135 kroner, its lowest since Jan. 2. The euro gained on signals that Greece's new government was moving closer in its negotiations with its creditors to easing the terms on its 240 billion-euro bailout. New Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are trying to develop a plan to lessen the burden of repayment that doesn't include a full write-down of the debt, said Brian Daingerfield, currency strategist at RBS Securities. "The fact that [Greece's] position shifted away from direct debt write-down into something more conciliatory is a general positive," Mr. Daingerfield said. "We're still in the very early stages of these negotiations; the euro would really stand to benefit more when they come closer to reaching a solution." The U.S. currency also fell against the Canadian dollar and the Norwegian krone as investors took profits on strong-dollar bets that falling oil prices would continue to weigh on the economies of oil producers, said Marc Chandler, global head of currencies at Brown Brothers Harriman & Co. Oil prices had slid nearly 60% from their June peak amid a global oversupply of crude. The oil market turned higher last week, after a steep drop in the number of rigs drilling for crude in the U.S. suggested production may be starting to ebb. U.S. oil futures rose for a fourth straight session on Tuesday, posting their longest winning streak since August and jumping 7% to close at $53.05 a barrel. On Friday, currency traders will sift the U.S. employment report for January for clues as to when the Federal Reserve might raise interest rates. Higher rates would boost returns on assets denominated in dollars and increase demand for the U.S. currency. Credit: By James Ramage
Subject: Canadian dollar; American dollar; Petroleum industry; Currency; Crude oil prices
Location: Greece United States--US
People: Tsipras, Alexis
Company / organization: Name: Brown Brothers Harriman & Co; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 3, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650631045
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: More Layoffs to Hit Texas Oil Workers
Author: Ailworth, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]03 Feb 2015: B.2.
Abstract:
Hundreds more oil-industry workers in Texas--including 330 in the oil and gas division of General Electric Co--are about to lose their jobs as US crude prices languish below $50 a barrel.
Full text: Not available.
Subject: Crude oil prices; Layoffs; Petroleum industry
Location: Texas
Company / organization: Name: General Electric Co; NAICS: 332510, 334290, 334512, 334519
Classification: 6100: Human resource planning; 8130: Investment services; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Feb 3, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1658776276
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1658776276?accountid=7117
Copyright: Copyright Dow Jones & Company Inc Feb 3, 2015
Last updated: 2017-11-22
Database: The Wall Street Journal
As Oil Prices Climb, Some Harbor Doubts; Crude Jumps 7% on Indications of Production Slowdown, Even as Inventory Data Point to Supply Glut
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
While the U.S. economy appears to be gradually coming out of its malaise, growth in China is slowing and the European economy remains moribund. [...]inventories continue to build up. Mr. Peters said he has been focusing on buying shares of U.S.-focused shale-oil producers with strong balance sheets and a relatively low cost of production, including EOG Resources Inc. and Apache Corp. EOG shares rose 4.1% and Apache gained 2.8% on Tuesday.
Full text: Crude prices rose to the highest level this year amid signs a global supply glut could ease, but some investors and analysts said the worst of the oil rout may not be over. The benchmark U.S. oil price has surged 19% since Wednesday, the largest four-day percentage gain since January 2009. The jump follows a selloff that saw oil tumble from more than $107 to less than $45 a barrel in seven months. Oil settled Tuesday at $53.05 a barrel, its highest level since Dec. 31, up $3.48, or 7%, on the New York Mercantile Exchange. Brent crude, the global benchmark, rose $3.16, or 5.8%, to $57.91. The rise in crude-oil prices spurred a rally in energy stocks, which helped lift the Dow Jones Industrial Average 305.36 points. Crude gains in recent days have been stoked by developments that point to an eventual slowdown in production. BP PLC on Tuesday said that it would cut spending on new projects this year and will shelve some planned investments after lower prices drove it to a loss for the fourth quarter. The move follows similar announcements from other large oil companies. On Friday, the number of rigs drilling for oil in the U.S. fell to a three-year low, according to oil-field-services company Baker Hughes Inc., a sign that the search for new crude deposits has lost some momentum. Other factors also pushed oil prices higher. A worker strike at several U.S. refineries that began on Sunday has boosted gasoline and diesel prices on worries that fuel production could be curtailed as a result. The rally in oil-product prices buoyed crude oil as well. Even with the recent rise in wholesale prices, retail gasoline prices are likely to remain around the cheapest in nearly six years, analysts said. Still, many said that even with the prospect of reduced oil production, the world will remain awash in oil for some time. Reduced investment in new drilling usually takes months or even years to translate to lower oil output. While the U.S. economy appears to be gradually coming out of its malaise, growth in China is slowing and the European economy remains moribund. Moreover, inventories continue to build up. In the U.S. alone, storage facilities house the biggest amount of oil in 84 years, and the American Petroleum Institute late Tuesday said that U.S. crude stockpiles rose again last week. Meanwhile, some refiners affected by the strike said they can keep plants running under contingency plans. For Tuesday, at least, the bulls won. "The question is, is this a bottom?" said Walter Zimmermann, chief technical analyst at brokerage United-ICAP. "It's absolutely too soon to tell. It's way too soon for crude-oil producers to pop the corks on their champagne bottles and celebrate dodging a bullet." When markets bounce higher after a long drop, he said, prices tend to stabilize rather than continue to rise. "You don't go from a burst bubble immediately into another bubble," Mr. Zimmermann said. Nicholas Johnson, a portfolio manager with Pacific Investment Management Co. who helps oversee about $20 billion in commodity investments, is among those predicting prices will continue to head higher, even if the gains are gradual. He expects oil to rise to about $60 a barrel by year's end. "Could you see a little bit of a correction from here? Yeah, it's possible," Mr. Johnson said. "But I think you could also sustain some of these gains." Sam Peters, portfolio manager of the $2.8 billion ClearBridge Value Trust, said he has been selectively buying shares of energy companies in recent months as oil prices have tumbled. He said the oil market is slowly coming back into balance as producers have cut drilling budgets and fuel demand has risen, and the underlying stocks stand to benefit. "Everybody's pricing in complete Armageddon, but the fact is that the correcting mechanisms are in place," Mr. Peters said. He said there is a "60% probability" that oil prices have hit a bottom. "The market always overshoots," he said. Mr. Peters said he has been focusing on buying shares of U.S.-focused shale-oil producers with strong balance sheets and a relatively low cost of production, including EOG Resources Inc. and Apache Corp. EOG shares rose 4.1% and Apache gained 2.8% on Tuesday. Some investors have been waiting weeks for a rally. Twelve Points Capital LLC bet that prices would rise when oil fell to about $60 in December. Last week, U.S. prices dropped to $44.45 a barrel, near a six-year low. Dave Clayman, a principal at Twelve Points, still thinks the bet will pay off as prices rise in the future. "You don't need to catch the bottom," he said. Other investors are taking a more cautious approach. Oil producers take positions in the futures market that would profit from a drop in prices to offset any losses from the impact on their physical operations. If producers take advantage of any rally to sell, that could cap any further price gains. In the near term, prices could weaken again as refineries shut down units in February and March for seasonal repairs, said Nicolas Robin, fund manager at Threadneedle Investments in London, which oversees about $148 billion in assets. Typically, refinery maintenance weighs on oil prices, because refiners buy less crude. Threadneedle has more money invested in gasoline and Brent crude than is recommended by its benchmark, and it has a smaller-than-suggested position in U.S. oil prices. Refiners usually ramp up production in the late spring ahead of summer, when gasoline demand is typically strong as people tend to drive more. "I think that if we hit a bottom this year, it's likely to be in the next four to six weeks, [but] whether we've already seen it remains to be seen," Mr. Robin said. Dan Strumpf contributed to this article. Write to Nicole Friedman at Corrections & Amplifications An earlier version of this article misspelled Walter Zimmermann's name. Credit: By Nicole Friedman
Subject: Petroleum industry; Crude oil prices; Petroleum production; Gasoline prices; Dow Jones averages
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650707357
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650707357?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Shares Mostly Higher on Oil's Rise
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
The Shanghai Composite Index was down 1%, but investors are expecting a strong open Thursday, after the People's Bank of China said after the market close Wednesday that it will lower the reserve-requirement ratio for banks by 0.5 percentage point, effective Thursday, to boost liquidity and support the economy On Wednesday, the HSBC China services purchasing managers index at 51.8 in January, down from 53.4 in December, pointing to a slowdown outside the nation's factory sector.
Full text: Asian stocks finished mostly higher Wednesday with made in the past few days, but Shanghai shares fell before an announcement after the market close that China would . The Nikkei Stock Average rose 2.0% at 17,678.74, while Australia's S&P/ASX 200 rose 1.2% to 5777.34. Both were buoyed by higher crude prices while Tokyo got help from strong earnings results from Mitsubishi UFJ Financial Group Inc. Crude-oil futures in New York were down $0.72 in the Globex electronic session to $52.33 a barrel but have bounced more than 10% in the past week. Australian stocks, where big commodities producers trade, extended a steady ascent that has seen the benchmark index gain about 500 points, or 9.5%, since Jan. 16. Stocks were buoyant even after shares skyrocketed on Tuesday, when the central bank met the hopes of many investors and to help buffer the resource-rich economy from the negative impact of a fading mining boom. In Japan, stellar business results from MUFG helped to power financial-related shares to some of the best gains on the board. MUFG added 5.2% after --up 18% on-year--for the nine months from April to December. The numbers were boosted by a strong performance in overseas businesses, as well as gains from its investment in U.S. investment bank Morgan Stanley. The Shanghai Composite Index was down 1%, but investors are expecting a strong open Thursday, after the People's Bank of China said after the market close Wednesday that it will lower the reserve-requirement ratio for banks by 0.5 percentage point, effective Thursday, to boost liquidity and support the economy On Wednesday, the HSBC China services purchasing managers index at 51.8 in January, down from 53.4 in December, pointing to a slowdown outside the nation's factory sector. Service activity was still expanding from the previous month, albeit at a slower rate. A reading above 50 indicates month-to-month expansion, while a level below that points to contraction. In Hong Kong, shares of Hang Seng Bank Ltd. surged 5.2% on news that it may sell its stake in China's Industrial Bank Co. Vera Sprothen contributed to this article. Write to Chao Deng at Credit: By Chao Deng
Subject: Investments; Purchasing managers index; International finance
Location: Australia China New York
Company / organization: Name: Hang Seng Bank Ltd; NAICS: 522110; Name: Morgan Stanley; NAICS: 523110, 523120, 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650744536
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650744536?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cnooc Doesn't Walk Oil Talk
Author: Bhattacharya, ByAbheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
State-run Cnooc has begun to parrot the discipline mantra of energy companies world-wide, saying late Tuesday that it will slash its 2015 capital spending by as much as 35% from the year before.
Full text: Like the Western majors, the explicit signal China's big offshore energy producer is sending is that it is adjusting to a world of cheap oil. But also like its global counterparts, it implicitly still needs oil to rebound. State-run Cnooc has begun to parrot the discipline mantra of energy companies world-wide, saying late Tuesday that it will slash its 2015 capital spending by as much as 35% from the year before. This follows peak expenditure of $17.3 billion in 2014 and is the biggest spending cut in the company's history, says Sanford C. Bernstein. Yet Cnooc actually hasn't cut back that much. It aims to spend between $11 billion and $13 billion this year. Assuming Brent crude averages $60 this year, it will earn $11 billion in cash from operations, according to Barclays' Somshankar Sinha, just enough to cover the lower end of its expenditure range. Add dividends worth $2.2 billion this year, and it is clear Cnooc comes up short on cash. The company's balance sheet can accommodate more borrowing for now. But this will cause net debt to rise to 0.8 times estimated earnings before interest, tax, depreciation and amortization, from around 0.4 times the last two years and no net debt previously. At the same time, Cnooc also has to invest more at some point. This is necessary to offset the natural decline in its oil fields as well as extract more energy over time. On this count, it is disappointing that Cnooc will likely miss its production target between 2011 and 2015, not counting . Cnooc may be able to meet its target for this year of generating a 10% increase in oil and gas output and the 7% the year after. That is because of projects it has already sunk capital into. But in 2017, it is guiding for flat output. To do better, it will need to spend more. The only way Cnooc can decrease debt and increase investments is if oil rebounds, allowing it to generate more cash. By Mr. Sinha's calculations, net debt falls to roughly 0.5 times Ebitda and capital spending comes to $14 billion in 2017--the key assumption being Brent at $90. This sort of recovery is what Western majors are assuming, too. But oil futures predict Brent averaging $73 that year. Cnooc's Hong Kong shares have only fallen 21% in the last six months, even as Brent collapsed 45% in that period. But investors may yet find themselves caught on the horns of the dilemma facing Cnooc. Credit: ByAbheek Bhattacharya
Subject: Petroleum industry; Energy industry; Capital expenditures
Location: China
Company / organization: Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650776167
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650776167?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Slump as Inventories Rise Near 80-Year Highs; Nymex Crude Posts Biggest One-Day Drop in Two Months
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
[...]analysts caution that the market remains oversupplied and that it could take months before reductions in spending and drilling lead to lower oil output. in the week ended Jan. 30 to 413.1 million barrels, the U.S. Energy Information Administration said Wednesday.
Full text: Oil prices tumbled 8.7% on Wednesday, halting a robust four-day rally, after data showed that U.S. crude supplies had climbed to their highest level in about 80 years. U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, the largest one-day decline since Nov. 28, 2014. Brent, the global benchmark, declined $3.75, or 6.5%, to $54.16 a barrel on ICE Futures Europe. U.S. in the four days ended Tuesday as a slowdown in U.S. drilling activity and spending cuts by major oil companies spurred some speculation that oil prices, which have plunged in recent months, had reached a bottom. But analysts caution that the market remains oversupplied and that it could take months before reductions in spending and drilling lead to lower oil output. in the week ended Jan. 30 to 413.1 million barrels, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a gain of 3.7 million barrels. Stockpiles are at the highest level ever in EIA weekly data going back to August 1982. In monthly data, which don't line up exactly with the weekly data, inventories haven't been this high since 1930. "U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years," the EIA said in the report. Oil prices have plunged more than 50% since June, but U.S. crude production remains at multi-decade highs. "The inventory report was really, I think, a reality check," said John Kilduff, founding partner at Again Capital in New York. "You still have this dynamic of high output and shaky demand." Refineries typically shut units to perform seasonal maintenance in February and March, so analysts expect inventories to continue growing in the coming weeks as refiners buy less crude. "Overall, that was a pretty bearish report, and I think the market's taking it as such," said Kyle Cooper, analyst at IAF Advisors in Houston. "I'm not sure the market's fully factored in the reality that we're going to build a lot of crude in the next few months." Refineries processed 15.5 million barrels a day of crude oil last week. At the peak of maintenance, 1.1 million barrels a day of processing capacity is planned to be offline in early March, according to CIBC World Markets. In addition, demand for petroleum products in the U.S. fell last week, the EIA said. Gasoline supplies rose by 2.3 million barrels in the week. Analysts had expected a drop of 300,000 barrels. "Clearly on the gasoline, we saw the effect of the bad weather in the New England area," which kept drivers off the road, said Andy Lipow, president of Lipow Oil Associates in Houston. Distillate stocks, including heating oil and diesel fuel, rose by 1.8 million barrels, compared with analysts' expectations for a 2.2-million-barrel weekly decrease. Gasoline futures for March delivery settled down 11.96 cents, or 7.5%, at $1.4817 a gallon. Diesel futures slid 7.99 cents, or 4.3%, to $1.7666 a gallon. "We expect U.S. consumption of oil products to increase over the rest of this year as lower prices begin to have an impact," said Capital Economics in a note Wednesday. "But output is still likely to rise by more, at least for the next few months." Write to Nicole Friedman at Credit: By Nicole Friedman
Subject: Petroleum refineries; Petroleum industry; Crude oil; Inventory; Futures; Crude oil prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650796874
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650796874?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Statoil Names Sætre Permanent CEO; Executive Had Led Oil Company on Acting Basis
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract: None available.
Full text: OSLO--Statoil ASA on Wednesday said acting Chief Executive Eldar Sætre would head the company permanently, as the energy industry faces a challenging period of high costs and lower oil prices. Mr. Sætre took the helm of Statoil in October after Helge Lund stepped down after a decade of leading the company to join the U.K.'s BG Group PLC. However, he had previously said he wasn't a candidate as permanent chief executive. "We are glad he changed his mind," Statoil Chairman Svein Rennemo said. "Eldar Sætre was our first choice. The industry and company are facing demanding challenges. Eldar stands out with his long experience and ability to create change." Statoil said last year it would cut costs by $1.3 billion a year by 2016, and reigned in capital expenditure amid rising industry costs. The company is expected to boost those efforts after Brent oil prices more than halved since last June, seriously eroding the profitability of Statoil's upcoming projects. "Our industry is currently experiencing large uncertainty. Statoil started the work to improve our competitiveness early," said Mr. Sætre. "We have our work cut out for us, but we are well prepared to tackle these challenging times." Statoil's board said it had considered candidates from Norway and abroad, looking for someone who could improve Statoil's competitiveness, navigate a macroeconomic situation with stronger pressure on industry margins and increase the speed of the company's transition towards a low-carbon society. Mr. Saetre, 58, said Statoil under his leadership would extend and strengthen its position on the Norwegian continental shelf, invest in material and profitable positions abroad, and strengthen its efforts in the transition to a low carbon society. Mr. Saetre's annual fixed salary will be 7.7 million Norwegian kroner ($1 million), roughly in line with his predecessor's fixed pay, and he will participate in programs for annual variable pay and long-term incentives. He keeps his existing pension agreement which enables him to resign at 62. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650823201
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650823201?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
BP Joins The Rush To Cut Oil Spending
Author: Scheck, Justin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Feb 2015: B.1.
Abstract:
At least two dozen U.S. independent oil producers have announced plans to curb capital spending this year by nearly $24 billion dollars compared with last year's budgets, according to a review of company records by The Wall Street Journal.
Full text: LONDON -- BP PLC on Tuesday joined a raft of oil companies, big and small, slashing their budgets for finding and tapping new sources of crude, offering a pessimistic outlook on a day it reported a net loss for the latest quarter. The London-based company, which is still facing up to $13.7 billion in U.S. penalties from its 2010 Gulf of Mexico spill, said it would cut its capital and exploratory budget by nearly 20%, down to $20 billion. The announcement came as BP became the only so-called super-major oil company in the red in the fourth quarter, a $969 million replacement-cost loss caused in part by a more than $3 billion downgrade in the value of some of its reserves. BP CEO Bob Dudley gave a darker assessment of the future than his oil rivals have, saying U.S. shale production and low oil prices are a structural shift that is forcing him to "reset the whole cost base" of the company. The outlook for oil prices is "clearly much weaker than anyone anticipated," he said. "I do think we're in for, at minimum, a year, and probably several years, of lower prices." BP is the latest producer to grapple with plunging oil prices by cutting capital expenses, walking a line between making short-term cost cuts and the need to invest in long-term projects that will produce crude in years to come. At least two dozen U.S. independent oil producers have announced plans to curb capital spending this year by nearly $24 billion dollars compared with last year's budgets, according to a review of company records by The Wall Street Journal. Additional cuts are expected over the next several weeks as big shale players, including EOG Resources Inc. and Anadarko Petroleum Corp., outline their 2015 spending strategies. And BP's decision follows super-major rivals Chevron Corp. and Royal Dutch Shell PLC in slashing planned capital expenses by billions of dollars. The cutbacks come after years of high spending on giant projects around the globe. With oil near $100 a barrel, companies competing for access to drill rigs and contractors drove up development costs and sent giant projects over budget in far-flung places like Papua New Guinea. Now, oil prices are hovering between $50 and $60 a barrel. The situation has benefited American consumers who have enjoyed $2 a gallon gasoline for the first time in a decade, but it is below the break-even point for many new oil-drilling projects. BP's gloomy quarterly report didn't scare off investors, who sent the stock up nearly 4% in London trading Tuesday. The slashed spending by producers has helped fuel the recent oil-price rally, with some betting the cuts will bring the global market back into balance. Brent, the global benchmark, and WTI, the U.S. price marker, have both gained more than 15% since Thursday. But the risks of pulling back too far on new oil fields were noted by some analysts and investors. BP last year replaced only 62% of the oil and gas it pumped with new reserves and Shell replaced just 26%. For both companies, that is the lowest amount in a decade, according to data from analysts at Oppenheimer. Mr. Dudley said Tuesday that the replacement ratios are "lumpy" year to year and the fluctuations aren't a concern. "You'll get brownie points from the stock market for slashing your spending in the short term, but in the long term you have to be concerned about your long-term prospects," said Ivor Pether, a portfolio manager with Royal London Asset Management, which owns Shell and BP stock. The spending cuts and a commitment to paying dividends were heartening to investors, Mr. Pether said, but he added that investors must ask "how they are protecting the long-term dividend stability, which only comes from delivering new projects to replace the ones that run off." Development costs are dropping with the oil price. Now, said Oppenheimer analyst Fadel Gheit, "would be the time to invest in long-term projects." Instead, companies facing investor pressure are cutting back when they could invest at low rates on projects that could be lucrative if prices rebound. Mr. Dudley said the company is reviewing, for a second time, a delayed offshore project in the Gulf of Mexico called Mad Dog 2 in an effort to find ways to cut costs. The company also struck a deal to partner with Chevron on some Gulf projects that could make them less costly for BP, Mr. Dudley said. Another British energy company, BG Group PLC, said it would cancel or delay projects in 2015 and cut capital spending by roughly a third, to about $6 billion to $7 billion, after writing down nearly $9 billion in assets and reporting a net loss of $5 billion for the 2014 fourth quarter. "In the last six months the world has changed," said BG Executive Chairman Andrew Gould on a conference call. "After four years of prices above $100, we're now operating above $50 a barrel." Shell last week sounded a less bearish note. Its chief executive said the company would cut some $15 billion of planned capital spending over the next few years, but executives said they were confident that oil prices would rebound in coming years. Chevron said last week it would cut capital spending this year by 13% from 2014. Since its 2010 Gulf of Mexico explosion and spill, BP has faced investor pressure to maintain dividends, which Mr. Dudley called a "financial priority." The company has shrunk since the spill, selling more than $40 billion in assets to pay for legal and cleanup costs. Even as it announced cost cuts Tuesday, Mr. Dudley said BP would raise its dividend. The asset sales since 2010 reduced BP's production by about 25% between the spill and the end of 2013, but the company said in December that its head count rose over that period. BP said it would book a $1 billion restructuring charge as it tries to cut costs through layoffs and other measures. BP also lowered the value of reserves in places such as the North Sea and Angola, which it has relied on for some of its highest profit margins in recent years. For the full year, BP reported a replacement-cost profit -- a figure that strips out inventory changes and is similar to the net income that U.S. companies report -- of $8.07 billion, compared with $23.61 billion for 2013. BP's net loss for the quarter was $4.41 billion, compared with a profit of $1.04 billion in the same period last year, on revenue down 21% at $74 billion. Net profit for the year fell to $3.78 billion from $23.45 billion, with revenue falling 6.7% to $353.57 billion. BP's earnings only capture a portion of the recent oil-price decline, since much of it happened after the quarter closed; the price for benchmark Brent crude averaged about $77 a barrel in the fourth quarter. --- Erin Ailworth, Daniel Gilbert, Selina Williams and Georgi Kantchev contributed to this article. Credit: By Justin Scheck
Subject: Petroleum industry; Crude oil prices; Net losses; Company reports; Capital expenditures
Location: London England United Kingdom--UK
Company / organization: Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 9175: Western Europe; 3100: Capital & debt management; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Feb 4, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650851249
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650851249?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eurozone Retail Sales Grew Strongly in Final Quarter of 2014; Decline in Oil Prices Boosts Consumer Spending
Author: Hannon, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
Retail sales in the eurozone rose for the third straight month in December, and at the fastest annual pace in almost eight years, an indication that falling oil prices are boosting consumer spending and helping to support economic growth.
Full text: Retail sales in the eurozone rose for the third straight month in December, and at the fastest annual pace in almost eight years, an indication that falling oil prices are boosting consumer spending and helping to support economic growth. Separate surveys of purchasing managers also released Wednesday showed the eurozone economy grew more rapidly than first estimated in January, driven by pickups in Germany, Spain and Italy, while France floundered. The European Union's statistics agency said retail sales rose by 0.3% from November, following two straight months in which they increased by 0.7%, larger rises than first estimated. That left sales 2.8% up on December 2013, the largest increase since March 2007, or well before the onset of the global financial crisis that tipped the eurozone economy into its long slump. Compared with the third quarter, retail sales in the final three months of 2014 were up 0.9%, a sign that consumer spending was responsible for a slight acceleration in economic growth. "This reinforces our belief that eurozone growth could well surprise on the upside and come in around 1.5% in 2015 as it benefits appreciably from very low oil prices, a much more competitive euro and substantial ECB stimulus," said Howard Archer, an economist at IHS Economics. The strong rise in sales over the final three months of last year may ease fears that the eurozone is at risk of a slide into deflation, a self-perpetuating spiral in which consumers postpone purchases because they expect prices to drop, leading to a fall in output and further declines in prices. However, surveys of purchasing managers underlined the scale of the challenge facing the European Central Bank as it prepares to launch its program of quantitative easing next month, as businesses cut their prices at the fastest rate in nearly five years. "The latest eurozone PMIs and retail sales data add to the evidence of a slight pickup in growth in the currency union over recent months," said Jonathan Loynes, chief European economist at Capital Economics. "But they also suggest that deflationary pressures are still building." Data firm Markit, which surveys more than 5,000 businesses across the eurozone, said Wednesday its composite purchasing managers index--a measure of activity in the manufacturing and services sectors--rose to 52.6 in January from 51.4 in December. A reading below 50.0 indicates activity is declining, while a reading above that level indicates it is increasing. The PMI was revised from a preliminary estimate of 52.2, and signaled the eurozone economy grew at the fastest pace since July 2014. But even after that acceleration, growth remained modest. The January pickup was driven by service providers in Germany and Spain, while activity in Italy also increased. That left France lagging behind the other major eurozone economies, as its composite PMI fell to 49.3, and a two-month low. The pickup looks set to be sustained, as new orders rose, and businesses hired additional workers at the fastest rate since mid-2011. But they continued to cut their prices, opting to pass on declines in their own costs as a result of falling oil prices. That behavior suggests the eurozone won't soon emerge from a period of falling consumer prices. "Deflationary pressures will remain as lower oil prices feed through to the economy," said Chris Williamson, Markit's chief economist. On Jan 22, the ECB launched a program of bond purchases using freshly created money that is likely to total more than 1 trillion euros (more than $1.148 trillion), with the aim of returning the inflation rate to its target of just under 2%. In January, consumer prices were 0.6% lower than a year earlier. Write to Paul Hannon at paul.hannon@wsj.com Credit: By Paul Hannon
Subject: Petroleum industry; Consumer Price Index; Purchasing managers index; Eurozone; Economic growth; Economists
Location: France Spain Italy Germany
Company / organization: Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650851427
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650851427?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Gunmen Storm Libyan Oil Field, Killing Four; Libyan Officials Say Radical Islamists Appear to Be Behind the Attack
Author: Faucon, Benoît; Landauro, Inti
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract: None available.
Full text: An attack on a central Libyan oil field has left four people dead and appeared to be the work of radical Islamist fighters targeting Western interests, Libyan officials said Wednesday. The incident, which occurred on Tuesday, comes days after an that killed nine people. A group calling itself Islamic State-Tripoli Province claimed responsibility for the hotel attack, raising fears that terrorists targeting Westerners were becoming part of the fabric of violence in war-torn Libya. An American was among the victims in that attack. No group has publicly claimed responsibility for Tuesday's attack at the Mabruk oil field. Libyan officials said the attack on the facility was well coordinated, coming from three different directions. The gunmen used the word "kuffar" to describe non-Muslims, the officials said, language that is common among radical Islamic militants but not among more moderate religious groups. "It's your punishment for working with the 'kuffar,'" one perpetrator shouted during the attack, according to a Libyan official briefed on the incident. Officials briefed on the incident said some of the attackers spoke Arabic with a foreign accent. "The attackers rounded up staff...and gave them a long lecture about Islam," said another official who works at the joint-venture operating the field. The joint-venture is owned by Libya's National Oil Co. and France's Total SA. The four victims were guarding the entrance to the oil field when gunmen stormed the facility and shot them, the joint-venture official said. "They were killed immediately," he said, adding the gunmen also seized satellite phones at the facility. Total confirmed the attack but didn't comment on the casualties. The violence underscores the as rival factions vie for . On the same day, there was renewed fighting near Libya's largest oil port, pitting Libya Dawn, a more moderate Islamist group that controls the capital, Tripoli, against a secular-oriented regime based in the eastern city of Tobruk. The country has been unstable since longtime leader Moammar Gadhafi was killed in a popular uprising in 2011. The unrest has reduced the country's oil exports and created tens of thousands of refugees. Total has jointly operated the Mabruk field since 1994, and it once produced between 30,000 to 40,000 barrels of oil a day. Production was shut down in December because of safety concerns, and all French expatriates were evacuated at the time. The status of the facility wasn't known on Wednesday. Write to Benoît Faucon at Credit: By Benoît Faucon And Inti Landauro
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 165085 1726
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650851726?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Get Lift From Oil's Bounce; Major Indexes Rise More Than 1%
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]04 Feb 2015: C.1.
Abstract:
Another concern for U.S. stock investors has been a stronger U.S. dollar, which has dented earnings growth at some multinational companies by reducing the value profits earned abroad. [...]the current quarter, earnings "have been a supporting factor" for stocks, he said.
Full text: A bounce in oil prices helped fuel a second consecutive day of gains for U.S. stocks, continuing the market's string of large moves. The jump in stocks came amid a reversal of some of the stronger trends seen across financial markets in recent weeks. In addition to the sharp turn higher in oil prices, the U.S. dollar and U.S. government bonds both fell Tuesday after big rallies to start the year. The Dow Jones Industrial Average advanced 305.36 points, or 1.8%, to 17666.40. The S&P 500 gained 29.18 points, or 1.4%, to 2050.03 and the Nasdaq Composite Index rose 51.05 points, or 1.1%, to 4727.74. Stocks continued to rise overseas early Wednesday, led by Japan, where the Nikkei was up 2.1% late in the morning. Market also moved higher in Australia, Hong Kong, Shanghai and Seoul. In the U.S., energy stocks led the S&P 500 higher. The group rose 2.8% and in the process marked a fourth advance in a row. Shares of Exxon Mobil and Chevron were among the top performers in the Dow. Exxon advanced $2.67, or 3%, to $92.25 and Chevron gained 3.47, or 3.3%, to 109.53. With Tuesday's rally, the Dow has gained 501.45 points, or 2.92%, in two trading days. That move higher reversed last week's loss of 2.87% and continued stocks' seesaw trading pattern. Both the Dow and the S&P 500 have moved up or down more than 1% in each of the past six sessions. However, both benchmarks largely have been treading water. The S&P 500 is down 0.3% since Jan. 26, and the Dow has lost less than 0.1% in that time. So far this year, the S&P is down 0.4% and the Dow is down 0.9%. "Volatility is very well entrenched in this market," said Jonathan Corpina, senior managing partner at brokerage firm Meridian Equity Partners. "It shows how uncommitted investors are." Trading was busy Tuesday. Composite volume totaled 8.4 billion shares, well north of the daily averages of 7.3 billion and 6.3 billion in the year to date and 2014, respectively. In the background, investors have been wrestling with the impact of the drop in oil prices on corporate profits. Thanks to falling oil prices, fourth-quarter earnings of S&P 500 energy companies are expected to shrink 23% from the year before, according to FactSet. "Today, rising oil prices and rising interest rates [are] a positive," said Jim McDonald, chief investment strategist at Northern Trust Corp., which oversees $934 billion. "Investors have been frightened that falling commodity prices were reflecting a major downturn in the global economy." In the bond market, Treasury prices fell, pushing the yield on the 10-year note up to 1.781% from 1.669% on Monday, the lowest closing level since May 2013. Another concern for U.S. stock investors has been a stronger U.S. dollar, which has dented earnings growth at some multinational companies by reducing the value profits earned abroad. Tuesday saw some reversal of that trend, with the dollar sliding 1.2% for a second decline in a row. However, the dollar is still up 17.7% against the euro from where it stood a year ago. The S&P 500 is on pace to increase earnings 2.3% from a year earlier, the slowest pace since 2012. "Earnings aren't that great. They've sort of stalled out," said John Manley, chief equity strategist at Wells Fargo Asset Management. Until the current quarter, earnings "have been a supporting factor" for stocks, he said. But with profits slowing, Mr. Manley expects stocks to see continued volatile trading. European stocks also rallied, amid hopes of a resolution to the standoff between the new Greek government and its creditors. U.S. investors have been keeping a close eye on Europe in recent months, as they worried about the potential for economically-damaging deflation and political tensions. Greek stocks jumped 11%, Germany's DAX 30 gained 0.6% to a record and France's CAC-40 added 1.1%. In corporate news, Staples and Office Depot are in advanced talks to combine, The Wall Street Journal reported. Office Depot absorbed rival OfficeMax in 2013. Staples shares jumped 1.87, or 10.9% to 19.01 and Office Depot shares surged 1.65, or 21.6%, to 9.28. Ford Motor and General Motors gained after global auto makers said their U.S. sales grew in January, which is ordinarily a slow month for the industry. Ford rose 38 cents, or 2.5%, to 15.65 and GM climbed 87 cents, or 2.6%, to 33.98. United Parcel Service shares added 44 cents, or 0.4%, to 100.57, but trailed the broader market after it provided a 2015 earnings forecast that was at the low end of Wall Street's expectations. BP posted a loss for the fourth quarter, the first of the world's giant oil companies to do so amid the slump in oil prices. Still, BP's underlying earnings, which factor out one-time items, beat analysts' expectations. The company also announced an increased dividend. U.S.-listed shares rose 1.24, or 3.1%, to 41.10.
Credit: By Alexandra Scaggs
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 4, 2015
column: Tuesday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1650852121
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1650852121?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Why Cheaper Oil Doesn't Always Lead to Economic Growth; Some Governments Raise Taxes, Keeping Pump Prices High; Lower Costs Also Stoke Deflation Fears
Author: Talley, Ian; Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]04 Feb 2015: n/a.
Abstract:
[...]some consumers there are paying an extra 7% or more at the pump than they did last week. India's purchasing managers index, a gauge of factory-floor conditions, has improved in recent months, potentially reflecting better profit margins at local companies because of lower oil costs.
Full text: Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn't necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth. China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether. High taxes in Japan mean pump prices have fallen only 15% in the past six months, compared with a 40% decline in the U.S. Taxes also blunt the fall in Europe: premium gasoline prices have fallen 29% in the U.K. and 32% in France. Brazil has trimmed subsidies and raised taxes to shore up its deteriorating finances. As a result, some consumers there are paying an extra 7% or more at the pump than they did last week. Oil prices posted their largest one-day drop in two months Wednesday after U.S. data showed crude supplies near 80-year highs. U.S. crude oil for March delivery sank 8.7% to $48.45 a barrel. Brent, the global benchmark, declined 6.5% to $54.16 a barrel. Past oil-price declines have often signaled a global slowdown as demand for crude collapses. But they also have often been followed by a ramping up of growth. The 60% fall in oil prices between November 1985 and March 1986 helped fuel five years of global growth that averaged near 4%. A raft of economists and policy makers in recent months has shrugged off concerns that falling oil costs might be a harbinger of a slowdown, arguing the windfall for oil importers would more than offset the hit major crude exporters would take as their revenues tanked. As recently as early December, the International Monetary Fund said that cheaper energy could add nearly a percentage point to gross domestic product for most advanced economies. European Central Bank President Mario Draghi has called the effect of falling oil prices "unambiguously positive." To be sure, there are signs oil's fall is trickling into some economies. The IMF cited the oil-price decline as a primary reason for an upgrade in its forecast for the U.S. economy last month. Cheaper fuel also has provided a boost to retail sales in the eurozone. Spending by households in France, for example, rose by 1.5% on the month in December, according to data released Wednesday. Sales across the eurozone were up 2.8% in December compared with a year earlier. India's purchasing managers index, a gauge of factory-floor conditions, has improved in recent months, potentially reflecting better profit margins at local companies because of lower oil costs. In Japan, a weaker yen and cheaper fuel are giving many economists reason to raise their growth forecasts. And more potential benefits could emerge. "There's been insufficient upward revision of forecasts outside the U.S. due to energy," said Adam Posen, president of the Peterson Institute for International Economics. "There are still going to be positive effects from the shock, they just haven't shown up yet." But with more data pouring in from around the world, the impact is hardly uniformly upbeat. The risk of a deflationary mind-set among consumers and businesses has emerged as a major challenge in the eurozone and Japan, both of which are struggling to avoid falling back into recessions. Low or falling prices for goods and services can restrain consumer spending, deter business investment, cap wages and add to debt headaches. Oil is a major driver of that slowdown in inflation--the biggest since the depths of the financial crisis more than five years ago. Last week, the European Union's statistics agency reported consumer prices were 0.6% lower in January than a year ago. "If you think that prices are going to stay low, that will dramatically affect your behavior," said Ayhan Kose, lead author of the World Bank's flagship Global Economic Prospects report. The more oil prices lower inflation expectations in Europe and Japan, the less effective new central bank easy-money policies meant to spur growth will be, Mr. Kose said. "It will require more to deliver the same impact, and the impact will be less potent," he said. Both the IMF and the World Bank lowered their outlooks for growth in many major economies outside the U.S. last month. Political and economic headwinds are offsetting any gains seeping in from cheaper energy costs. In Italy, Japan, France, South Korea, China and other major oil importers, consumer confidence is waning, according to Nielsen's latest report on sentiment around the world. As consumer optimism falls, people are more likely to save than spend and businesses grow wary of new investments. "There's a lot of uncertainty around the strength of economies around the world," said Louise Keely, senior vice president at Nielsen and president of the Demand Institute, a non-profit think tank that studies consumer behavior. "That means the drop in fuel prices doesn't necessarily flow through into consumer sentiment." Hannes Baumgartner, a director of a trucking division at Italy-based transport and logistics company Fercam AG, said falling fuel prices have cut the company's costs but aren't likely to change its investment strategy. "We're mostly worrying about the volatility in prices," he said. Japan's chemical industry, a big user of imported oil, welcomed the cheaper input costs. But many companies say cheaper oil might push customers to demand discounts for items like plastics, tires, synthetic fabrics and detergents. "Too much volatility isn't desirable," said a spokesman for Sumitomo Chemical Co. Price growth is also anemic in China, reflecting weak consumer and business confidence. "The lower oil price is bringing more deflationary pressure rather than helping the economy," said Vincent Chan, a research analyst at Credit Suisse. Big Chinese companies are hobbled by overcapacity--the result of years of profligate investment--and are unlikely to boost spending on plants and other capital outlays just because energy prices fall, said Mr. Chan. Marla Dickerson, Mitsuru Obe, Eric Yep and Paul Hannon contributed to this article. Write to Ian Talley at ian.talley@wsj.com and Brian Spegele at brian.spegele@wsj.com Corrections & Amplifications An earlier version of this article misspelled the name of market-research firm Nielsen NV as Nielson. (Feb. 4, 2015) Credit: Ian Talley, Brian Spegele
Subject: Central banks; Petroleum industry; Subsidies; Recessions; Purchasing managers index; Gasoline prices; Eurozone
Location: China United States--US Japan France Europe
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120; Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 4, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business A nd Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651369989
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651369989?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Analysts Blow Calls on Oil Stocks; In Assessing Energy Companies, Many Failed to Foresee Depth of Crude's Decline
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet. While Citigroup's commodities analysts were among the first to call for a long-term decline in oil prices, Mr. Morris didn't make those downgrades until the strategists cut this year's forecast for the price of West Texas Intermediate crude by 24%.
Full text: In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet. With a barrel of crude having dropped nearly 30% since June, Pavel Molchanov reasoned, the worst of the selloff was likely history. He issued a report contending oil prices and energy stocks were "within weeks of bottoming." He and his colleagues maintained the equivalent of a "buy" recommendation on Houston energy producer Southwestern Energy Co., also down about 30% since June. More than two months after Mr. Molchanov made that call, it is clear he and many other analysts were wrong. Nymex crude prices and Southwestern Energy's stock each have fallen more than 20% since Thanksgiving. On Wednesday, U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, its largest one-day fall since Nov. 28 and down 55% from its June high. Energy shares in the S&P 500 have lost 21% in that time. "It's a little late in the game to downgrade stocks on oil going down, because oil's already gone down," said Mr. Molchanov. But "commodity prices are almost impossible to predict in the short run." The failure of Wall Street analysts to foresee the depth of the oil decline stands as a cautionary tale for investors reassessing the sector after crude's 19% rise over four sessions through Tuesday. While some portfolio managers are purchasing shares on the expectation the pullback has been overdone, others are questioning whether the latest bounce will last. Analysts have cut their forecasts for the sector's 2015 earnings by 53% since June, but they recommend that investors buy energy stocks more than half of the time, according to S&P Capital IQ. Energy stocks have the second-highest proportion of "buy" ratings in the S&P 500, even as they trade at pricey valuations relative to history. "Analysts are always optimistic," said Reed Choate, portfolio manager at Neville, Rodie & Shaw, a New York investment-advisory firm that oversees $1.5 billion. But "this was a big miss." Mr. Choate started buying energy stocks last fall but since has stopped adding to those investments, reasoning that "you don't want to jump in the pool if the pool is about to get drained." As energy stocks first started to tumble last year, Wall Street's stock analysts were more bullish on those companies than any other sector, according to S&P Capital IQ. That sentiment helped give cover to investors who were buying energy stocks during the summer and fall, a move that now looks premature. Now, some are scrambling to reverse those calls. Analysts made 98 energy-stock downgrades in December and January, according to S&P Capital IQ. Still, they have upgraded 62 energy stocks over the same period. "In an ideal world, as an analyst you anticipate moves," said Arun Jayaram, an analyst covering exploration and production companies for Credit Suisse Group AG. But "it's difficult," he added. Even so, lower oil prices prompted Mr. Jayaram to downgrade a pair of energy stocks months before his peers at Raymond James. On Nov. 17, he cut his rating on Denbury Resources Inc. to the equivalent of "hold." That followed an Oct. 15 downgrade of SandRidge Energy, to the equivalent of "sell." Mr. Molchanov's colleagues at Raymond James didn't downgrade Southwestern until Jan. 6, when the stock had fallen an added 27% from late November. Many analysts didn't challenge energy-firm management teams' optimistic views in conference calls last fall, when the declines were just beginning, said Mr. Choate of Neville, Rodie & Shaw."They focused their questions on where they see oil production in 2017," he said, rather than what would happen if oil prices continued to fall. The crude-price decline has made the sector look pricey even following sharp share-price retreats. The energy sector of the S&P 500 is trading at 12.8 times last year's profits, above its 10-year average of 11.7, according to FactSet. And as analysts slash their forecasts for 2015 earnings, the sector is trading at a staggering 27.3 times its forecast profits for next year, more than twice its 10-year average of 11.8. At Citigroup Inc., analyst Robert Morris downgraded 13 exploration-and production-firm stocks on Jan. 7. While Citigroup's commodities analysts were among the first to call for a long-term decline in oil prices, Mr. Morris didn't make those downgrades until the strategists cut this year's forecast for the price of West Texas Intermediate crude by 24%. "We're in a new era," he said in an interview. "We're not going back to $100 oil." Still, hope persists. Mr. Molchanov of Raymond James thinks the sector could begin a lasting recovery in the second half of this year. The firm forecasts Nymex crude will sell for an average $62 a barrel this year. "The recovery will take time," he said. "Then, naturally, there's going to be a bounce in most oil stocks." Write to Alexandra Scaggs at Credit: By Alexandra Scaggs
Subject: Energy industry; Profits; Investment advisors; Petroleum industry; Stocks; Crude oil prices; Petroleum production
Company / organization: Name: Southwestern Energy Co; NAICS: 211112; Name: New York Mercantile Exchange; NAICS: 523210; Name: Raymond James & Associates Inc; NAICS: 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651245714
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651245714?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Price Drop Darkens Suncor's Results
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
CALGARY--Suncor Energy Inc., Canada's biggest crude-oil producer, reported an 81% drop in fourth-quarter profits on Wednesday as a result of slumping global crude prices and lower output at its oil sands mining operations due to unplanned maintenance.
Full text: CALGARY--Suncor Energy Inc., Canada's biggest crude-oil producer, reported an 81% drop in fourth-quarter profits on Wednesday as a result of slumping global crude prices and lower output at its oil sands mining operations due to unplanned maintenance. Major energy producers such as Suncor have been hit hard by a 60% decline in the price of crude oil since mid-June. Oil has reached six-year lows of less than $50 a barrel. Last month, Suncor reacted to the price plunge by cutting 1,000 contract-worker jobs and trimming its 2015 budget by 1 billion Canadian dollars ($800 million), even as it plans to boost total production volumes this year. Suncor had fourth-quarter net income of 84 million Canadian dollars ($66.9 million), or six Canadian cents a share, compared with C$443 million, or 30 Canadian cents, a year earlier. Profit was hit by a C$302 million foreign-exchange loss on U.S. dollar-denominated debt due to a weakening of the Canadian currency. The Calgary-based company said its average realized price for oil sands crude in the fourth quarter was C$69.51 a barrel, down from C$71.64 a barrel in the year-earlier period as lower oil prices offset gains from a weak currency against the U.S. dollar and a narrower price gap between U.S. and Canadian crudes. Operating earnings sank 60% to C$386 million, or 27 Canadian cents a share, in the fourth quarter. That fell short of an average estimate from analysts for an operating profit of 35 Canadian cents a share. "Suncor has built a strong balance sheet in preparation for a lower crude price environment," Chief Executive Steve Williams said in a statement. "Our commitment to capital discipline has put us in a better position to weather the price downturn." The company's overall fourth-quarter oil and gas output was 557,600 barrels of oil equivalent, nearly unchanged from a year earlier. But Suncor said oil sands production fell to 384,200 barrels a day, down from 409,600 barrels a day in the year-earlier period due to maintenance issues affecting upgrader equipment. That was offset by higher output volumes from an Eastern Canadian offshore field and a temporary boost in onshore production from Libya, it said. For the year, Suncor's oil sands production volume was 421,900 barrels a day, up from 392,500 barrels a day in 2013. Total oil and gas production was 534,900 barrels of oil equivalent a day, down from 562,400 barrels a day the previous year. It plans to produce up to 585,000 barrels of oil equivalent a day in 2015. Suncor and other large oil sands producers have vowed to continue spending on projects currently under construction, which typically involve huge upfront costs and multiyear development time frames. They expect to increase production volumes in the coming years despite the recent drop in crude prices. The company's capital and exploration budget for 2014 came in C$300 million below a planned budget of C$6.8 billion. It kept its latest spending plan for this year, which was revised lower last month, at C$6.2 billion to C$6.8 billion--which would be flat from a year earlier. Suncor said it would pay a quarterly dividend of 28 Canadian cents a share. No share repurchases are planned "as a result of the current lower price environment," it said. Write to Chester Dawson at Credit: By Chester Dawson
Subject: Budgets; Petroleum industry; Oil reserves; Financial performance; American dollar
Location: Canada United States--US
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651284333
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651284333?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Analysts Blow Calls on Oil --- In Assessing Energy Companies, Many Failed to Foresee Depth of Crude's Decline
Author: Scaggs, Alexandra
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Feb 2015: C.1.
Abstract:
In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet.
Full text: In late November, as collapsing oil prices pummeled energy-company shares, a Raymond James & Associates analyst told investors that energy stocks were still a good bet. With a barrel of crude having dropped nearly 30% since June, Pavel Molchanov reasoned, the worst of the selloff was likely history. He issued a report contending oil prices and energy stocks were "within weeks of bottoming." He and his colleagues maintained the equivalent of a "buy" recommendation on Houston energy producer Southwestern Energy Co., also down about 30% since June. More than two months after Mr. Molchanov made that call, it is clear he and many other analysts were wrong. Nymex crude prices and Southwestern Energy's stock each have fallen more than 20% since Thanksgiving. On Wednesday, U.S. crude oil for March delivery sank $4.60, or 8.7%, to $48.45 a barrel on the New York Mercantile Exchange, its largest one-day fall since Nov. 28 and down 55% from its June high. Energy shares in the S&P 500 have lost 21% in that time. "It's a little late in the game to downgrade stocks on oil going down, because oil's already gone down," said Mr. Molchanov. But "commodity prices are almost impossible to predict in the short run." The failure of Wall Street analysts to foresee the depth of the oil decline stands as a cautionary tale for investors reassessing the sector after crude's 19% rise over four sessions through Tuesday. While some portfolio managers are purchasing shares on the expectation the pullback has been overdone, others are questioning whether the latest bounce will last. Analysts have cut their forecasts for the sector's 2015 earnings by 53% since June, but they recommend that investors buy energy stocks more than half of the time, according to S&P Capital IQ. Energy stocks have the second-highest proportion of "buy" ratings in the S&P 500, even as they trade at pricey valuations relative to history. "Analysts are always optimistic," said Reed Choate, portfolio manager at Neville, Rodie & Shaw, a New York investment-advisory firm that oversees $1.5 billion. But "this was a big miss." Mr. Choate started buying energy stocks last fall but since has stopped adding to those investments, reasoning that "you don't want to jump in the pool if the pool is about to get drained." As energy stocks first started to tumble last year, Wall Street's stock analysts were more bullish on those companies than any other sector, according to S&P Capital IQ. That sentiment helped give cover to investors who were buying energy stocks during the summer and fall, a move that now looks premature. Now, some are scrambling to reverse those calls. Analysts made 98 energy-stock downgrades in December and January, according to S&P Capital IQ. Still, they have upgraded 62 energy stocks over the same period. "In an ideal world, as an analyst you anticipate moves," said Arun Jayaram, an analyst covering exploration and production companies for Credit Suisse Group AG. But "it's difficult," he added. Even so, lower oil prices prompted Mr. Jayaram to downgrade a pair of energy stocks months before his peers at Raymond James. On Nov. 17, he cut his rating on Denbury Resources Inc. to the equivalent of "hold." That followed an Oct. 15 downgrade of SandRidge Energy, to the equivalent of "sell." Mr. Molchanov's colleagues at Raymond James didn't downgrade Southwestern until Jan. 6, when the stock had fallen an added 27% from late November. The crude-price decline has made the sector look pricey even following sharp share-price retreats. The energy sector of the S&P 500 is trading at 12.8 times last year's profits, above its 10-year average of 11.7, according to FactSet. And as analysts slash their forecasts for 2015 earnings, the sector is trading at a staggering 27.3 times its forecast profits for next year, more than twice its 10-year average of 11.8. Still, hope persists. Mr. Molchanov of Raymond James thinks the sector could begin a lasting recovery in the second half. The firm forecasts Nymex crude will sell for an average $62 a barrel this year.
Credit: By Alexandra Scaggs
Subject: Energy industry; Stocks; Investment advisors; Crude oil prices; Securities analysis
People: Molchanov, Pavel
Company / organization: Name: Southwestern Energy Co; NAICS: 211112; Name: New York Mercantile Exchange; NAICS: 523210; Name: Raymond James & Associates Inc; NAICS: 523120
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 5, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651287784
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheap Oil Not a Boon for All --- Taxes Moderate Impact on Pump Price in Some Countries; Deflation Fears Stoked
Author: Talley, Ian; Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Feb 2015: A.1.
Abstract:
[...]some consumers there are paying an extra 7% or more at the pump than they did last week. India's purchasing managers index, a gauge of factory-floor conditions, has improved in recent months, potentially reflecting better profit margins at local companies because of lower oil costs.
Full text: Tumbling oil prices were supposed to boost growth in a host of major oil-importing economies. It isn't necessarily working out that way. Some governments have moved already to shore up their revenues by raising gasoline taxes or cutting fuel subsidies. At the same time, falling oil costs have pumped up deflation fears across Europe and Japan, adding to the risk that consumers and businesses will hold back on spending and investment, dragging on growth. China has raised fuel-consumption taxes by 50% since November. Gasoline prices have soared in Indonesia as the authorities eliminated subsidies altogether. High taxes in Japan mean pump prices have fallen only 15% in the past six months, compared with a 40% decline in the U.S. Taxes also blunt the fall in Europe: Premium gasoline prices have fallen 29% in the U.K. and 32% in France. Brazil has trimmed subsidies and raised taxes to shore up its deteriorating finances. As a result, some consumers there are paying an extra 7% or more at the pump than they did last week. Oil prices posted their largest one-day drop in two months Wednesday after U.S. data showed crude supplies near 80-year highs. U.S. crude oil for March delivery sank 8.7% to $48.45 a barrel. Past oil-price declines have often signaled a global slowdown as demand for crude collapses. But they also have often been followed by a ramping up of growth. The 60% fall in oil prices between November 1985 and March 1986 helped fuel five years of global growth that averaged near 4%. Economists and policy makers in recent months have shrugged off concerns that falling oil costs might be a harbinger of a slowdown, arguing the windfall for oil importers would more than offset the hit major crude exporters would take as their revenues tanked. As recently as early December, the International Monetary Fund said that cheaper energy could add nearly a percentage point to gross domestic product for most advanced economies. European Central Bank President Mario Draghi has called the effect of falling oil prices "unambiguously positive." To be sure, there are signs oil's fall is trickling into some economies. The IMF cited the oil-price decline as a primary reason for an upgrade in its forecast for the U.S. economy last month. Cheaper fuel has provided a boost to retail sales in the eurozone. Spending by households in France, for example, rose by 1.5% on the month in December, according to data released Wednesday. Sales across the eurozone were up 2.8% in December compared with a year earlier. India's purchasing managers index, a gauge of factory-floor conditions, has improved in recent months, potentially reflecting better profit margins at local companies because of lower oil costs. In Japan, a weaker yen and cheaper fuel are giving many economists reason to raise their growth forecasts. And more potential benefits could emerge. "There's been insufficient upward revision of forecasts outside the U.S. due to energy," said Adam Posen, president of the Peterson Institute for International Economics. "There are still going to be positive effects from the shock, they just haven't shown up yet." But with more data pouring in from around the world, the impact is hardly uniformly upbeat. The risk of a deflationary mind-set among consumers and businesses has emerged as a major challenge in the eurozone and Japan, both of which are struggling to avoid falling back into recessions. Low or falling prices for goods and services can restrain consumer spending, deter business investment, cap wages and add to debt headaches. Oil is a major driver of that slowdown in inflation -- the biggest since the depths of the financial crisis more than five years ago. Last week, the European Union reported consumer prices were 0.6% lower in January than a year ago. "If you think that prices are going to stay low, that will dramatically affect your behavior," said Ayhan Kose, lead author of the World Bank's flagship Global Economic Prospects report. The more oil prices lower inflation expectations in Europe and Japan, the less effective new central bank easy-money policies meant to spur growth will be, Mr. Kose said. Both the IMF and the World Bank lowered their outlooks for growth in many major economies outside the U.S. last month. Political and economic headwinds are offsetting any gains seeping in from cheaper energy costs. In Italy, Japan, France, South Korea, China and other major oil importers, consumer confidence is waning, according to Nielsen's latest report. As consumer optimism falls, people are more likely to save than spend and businesses grow wary of new investments. "There's a lot of uncertainty around the strength of economies around the world," said Louise Keely, senior vice president at Nielsen and president of the Demand Institute, a nonprofit think tank that studies consumer behavior. "That means the drop in fuel prices doesn't necessarily flow through into consumer sentiment." Hannes Baumgartner, a director of a trucking division at Italy-based transport and logistics company Fercam AG, said falling fuel prices have cut the company's costs but aren't likely to change its investment strategy. "We're mostly worrying about the volatility in prices," he said. Japan's chemical industry, a big user of imported oil, welcomed the cheaper input costs. But many companies say cheaper oil might push customers to demand discounts for items like plastics, tires, synthetic fabrics and detergents. "Too much volatility isn't desirable," said a spokesman for Sumitomo Chemical Co. Price growth is also anemic in China, reflecting weak consumer and business confidence. "The lower oil price is bringing more deflationary pressure rather than helping the economy," said Vincent Chan, a research analyst at Credit Suisse. Big Chinese companies are hobbled by overcapacity -- the result of years of profligate investment -- and are unlikely to boost spending on plants and other capital outlays just because energy prices fall, said Mr. Chan. --- Marla Dickerson, Mitsuru Obe, Eric Yep and Paul Hannon contributed to this article. Credit: Ian Talley, Brian Spegele
Subject: Central banks; Petroleum industry; Government subsidies; Recessions; Purchasing managers index; Gasoline prices; Eurozone; Gasoline taxes; Deflation; Crude oil prices; Economic growth; Imports
Location: China United States--US Japan France Europe
Company / organization: Name: International Bank for Reconstruction & Development--World Bank; NAICS: 928120; Name: European Centr al Bank; NAICS: 521110
Classification: 1110: Economic conditions & forecasts; 8510: Petroleum industry; 9180: International
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Feb 5, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651319854
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651319854?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Drops as Supplies Surge --- Four-Day Rally Ends With a Report Showing U.S. Inventories at 80-Year High
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]05 Feb 2015: C.4.
Abstract:
U.S. prices rallied 19% in the four days through Tuesday as a slowdown in U.S. drilling activity and spending cuts by major oil companies spurred some speculation that oil prices, which have plunged in recent months, had reached a bottom.
Full text: Oil prices tumbled 8.7% Wednesday, halting a four-day rally, after data showed U.S. crude supplies had climbed to their highest level in at least 80 years. U.S. crude oil for March delivery sank $4.60 to $48.45 a barrel on the New York Mercantile Exchange, the largest one-day decline since Nov. 28. Brent, the global benchmark, declined $3.75, or 6.5%, to $54.16 a barrel on ICE Futures Europe. U.S. prices rallied 19% in the four days through Tuesday as a slowdown in U.S. drilling activity and spending cuts by major oil companies spurred some speculation that oil prices, which have plunged in recent months, had reached a bottom. But analysts caution the market remains oversupplied and that it could take months before reductions in spending and drilling lead to lower oil output. U.S. crude-oil supplies rose by 6.3 million barrels in the week that ended Jan. 30, to 413.1 million barrels, the U.S. Energy Information Administration said Wednesday. Analysts surveyed by The Wall Street Journal had expected a gain of 3.7 million barrels. Stockpiles are at the highest level in EIA weekly data going back to August 1982. In monthly data, which don't line up exactly with the weekly data, inventories haven't been this high since 1930. "U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years," the EIA said in the report. Oil prices have plunged more than 50% since June, but U.S. crude production remains at multidecade highs. "The inventory report was really, I think, a reality check," said John Kilduff, founding partner at Again Capital in New York. "You still have this dynamic of high output and shaky demand." Refineries typically shut units to perform seasonal maintenance in February and March, so analysts expect inventories to continue growing in the coming weeks as refiners buy less crude. "Overall, that was a pretty bearish report, and I think the market's taking it as such," said Kyle Cooper, analyst at IAF Advisors in Houston. Refineries processed 15.5 million barrels a day of crude oil last week. At the peak of maintenance, 1.1 million barrels a day of processing capacity is planned to be offline in early March, according to CIBC World Markets. In addition, demand for petroleum products in the U.S. fell last week, the EIA said. Gasoline supplies rose by 2.3 million barrels in the week. Analysts had expected a drop of 300,000 barrels. Credit: By Nicole Friedman
Subject: Petroleum refineries; Petroleum industry; Crude oil prices; Inventory; Crude oil; Commodity prices
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N .Y.
Pages: C.4
Publication year: 2015
Publication date: Feb 5, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651319896
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651319896?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Rise; Views Differ on Market Direction; Analysts Say Traders Are Looking for a Bottom
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
Prices surged 19% in the four trading sessions ended Tuesday as investors focused on a drop in the number of rigs drilling for oil in the U.S. and reduced spending plans by major oil companies.
Full text: Oil prices rose Thursday, rebounding from sharp losses in another big swing that underscores the contrasting views on the market's direction. Many investors and traders are jockeying to find the bottom of a price plunge that saw the benchmark U.S. oil price tumble as much as 59% since June 2014. Some are focusing on the persistent global supply glut that sparked the selloff, which took prices to nearly six-year lows. Others, however, are looking ahead to the likelihood of curtailed oil output in several months, a potentially bullish development that already has bolstered investor sentiment about oil prices. Exacerbating the volatility are short-term traders, who are quick to pile into a bounce but are also just as quick to pull out at any sign of a reversal, market experts say. The price of benchmark U.S. oil futures gained $2.03, or 4.2%, to $50.48 a barrel on the New York Mercantile Exchange. Thursday's move came after an 8.7% slide on Wednesday following data showing that U.S. crude supplies had climbed to their highest level in about 80 years. That decline, in turn, erased gains from Tuesday, which capped the biggest four-day winning streak in percentage terms since January 2009. "It's yo-yoing," said Donald Morton, senior vice president at Herbert J. Sims & Co. "Is this just a sympathetic bounce off the beating yesterday? Most likely. I don't think there's anything serious behind this." The CBOE Crude Oil Volatility Index is at its highest level since 2011, according to FactSet. Oil extended gains in the after-hours session after Saudi Arabia cut the official price for its high-quality oil in Asia while raising the price in the U.S. Saudi price cuts to the U.S. in recent months have weighed on the market. Some investors saw those moves as a signal that Saudi Arabia will keep oil flowing into an oversupplied market to maintain market share at the expense of U.S. shale-oil producers. The country's latest price moves indicate that "they don't want to concede market share in Asia," said Vikas Dwivedi, global oil and gas economist at Macquarie Group. Mr. Dwivedi said he believes investors have overstated the strategic significance of Saudi Arabia's pricing decisions, saying those decisions are more often based on price trends among various types of crude and refining margins. Crude also received support from a weaker U.S. dollar Thursday, said Myrto Sokou, research analyst at Sucden Financial. Oil, a dollar-denominated commodity, becomes more affordable to buyers using other currencies when the dollar is weaker. Some investors say oil is due to hit bottom soon because the number of rigs drilling for oil in the U.S. has sunk to a three-year low and major oil companies are cutting back on investment. Both signs point to lower output in the coming months or years, which eventually will support prices, experts say. However, analysts expect global oil production and inventory levels to remain high through the first half of 2015. Adding to the oversupply, Brazil and Iraq are producing almost one million barrels a day more oil than a year ago, JBC Energy estimates. "Nobody wanted to miss coming off the lows," said James Marshall, partner at brokerage Atlas Commodities LLC. "Nobody wanted to be that guy that watched it fall 50% and then watched it rally 20% and did nothing." However, Mr. Marshall said, trading is also active in the options market as investors try to limit potential losses. Brent, the global benchmark, rose $2.41, or 4.4%, to $56.57 a barrel on ICE Futures Europe. After falling so sharply for so long, "we need a new daily dose of bearish information to really continue to drop," said Gene McGillian, senior analyst at Tradition Energy. "We're still in the process of trying to stabilize." Gasoline futures rose 4.31 cents, or 2.9%, to $1.5248 a gallon. Diesel futures rose 3.93 cents, or 2.2%, to $1.8059 a gallon. Georgi Kantchev and Benoît Faucon contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Petroleum production; American dollar; Futures; Statistical data
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publicationdate: Feb 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651321898
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651321898?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Jo urnal
Petrobras Names Executives Who Resigned Along With CEO; CFO Barbassa Among Executives Who Stepped Down From Brazilian Oil Giant
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--Brazil's state-controlled oil company Petroleo Brasileiro SA, or Petrobras, provided the names of the five top executives who. The five executives who presented their resignation are: Almir Guilherme Barbassa, chief financial officer and chief investor relations officer; José Miranda Formigli, upstream director; José Carlos Cosenza, downstream director; José Alcides Santoro, gas and power director and José Antônio de Figueiredo, the engineering, technology and procurement director, the company said in a statement. The Petrobras board will meet this Friday to choose replacements for Ms. Foster and the other departed executives. The company has been under investigation after authorities alleged that some of the nation's largest construction companies paid bribes to secure $23 billion in contracts with Petrobras in recent years. Prosecutors say the companies colluded to drive up prices for the work, kicking back a portion to high-ranking Petrobras employees and politicians. Petrobras says it is a victim of the alleged corruption and that it is cooperating with authorities. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 165 1344129
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651344129?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Boom a 'Game-Changer' on Trade Deficit; Increased Imports of Other Goods Replace Reliance on Foreign Crude
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
While rising U.S. oil production and falling prices helped push petroleum imports to a five-year low in 2014, that only masked strong demand for other foreign-made goods brought on by steady economic growth and, most recently, an appreciating dollar.
Full text: The U.S. oil boom is redrawing America's trade picture. Petroleum imports accounted for less than 20% of the nation's trade deficit last year, down from more than 40% only five years earlier, according to figures for 2014 released Thursday. But the overall U.S. appetite for overseas goods didn't diminish over the period, which started with the global economy's first full year of expansion after the 2007-09 recession. Imports of just about everything else have surged as Americans substitute other goods for foreign oil, leaving a growing trade deficit. "If we hadn't had this oil boom I think our deficit would be lot larger than it is right now," said IHS Global Insight economist Patrick Newport. "It's a game-changer." For the full year, U.S. exports rose 2.9% from 2013 to $2.345 trillion, and imports climbed 3.4% to $2.850 trillion, leaving a deficit of $505.05 billion. Adjusted for inflation, the gap between imports and exports was the biggest since 2008, before the full force of the recession battered global trade. While rising U.S. oil production and falling prices helped push petroleum imports to a five-year low in 2014, that only masked strong demand for other foreign-made goods brought on by steady economic growth and, most recently, an appreciating dollar. The net result may mean slower U.S. economic growth. The Commerce Department last month said gross domestic product, the broadest measure of economic output, expanded at a 2.6% annual pace in the final three months of the year. That figure may be lowered in forthcoming revisions. Following December's trade data, which showed flagging exports and rising imports in the final month of the year, economists at Barclays and BNP Paribas set their fourth-quarter GDP estimate at 2.3%, High Frequency Economics at 2.1% and J.P. Morgan Chase at 2%. "It is not hard to come up with reasons for the weakness in today's report--sluggish foreign growth and a strong dollar are the obvious ones," Michael Feroli, chief U.S. economist at J.P. Morgan, said in a note to clients. The relative strength of the U.S. economy also has helped boost the value of the dollar, making foreign goods and services relatively more affordable and U.S. exports more expensive in overseas markets. The euro, for example, is down more than 8% against the dollar over the past three months. J&S Chemical of Canton, Ga., has been trying to expand sales in Europe, but the sudden change in currency values wiped out what the company had seen as a price advantage. Overseas sales account for about 40% of the company's business, so the maker of industrial lubricants and other chemicals isn't giving up. But it may have to rethink its strategy for the continent and eventually squeeze its profits. "It's something we're looking at in the future, we might have to lower prices a little bit--give them a discount so we stay competitive in the market," said Thomas Smith, global sales director at J&S. Mr. Smith said the lead time on many purchases is up to a year so the full effects of a stronger dollar may not yet be apparent. "I think this will affect definitely our future business and existing business in six to 12 months," he said. "It's definitely something we are keeping an eye on and a little bit worried about...if the dollar continues to strengthen and strengthen." For the full year, U.S. exports of industrial supplies--including precious metals, fuel oil, chemicals, cotton and coal--fell by $2.5 billion. Sales to foreign markets of consumer goods took a step back in December but were up for the full year. Exports of capital goods, such as industrial machinery, aircraft and semiconductors, climbed. "Slow economic growth in the rest of the world should constrain export growth while strong growth in U.S. domestic demand likely will pull in increasing amounts of imports," said Jay Bryson, global economist at Wells Fargo. Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com Credit: By Jeffrey Sparshott
Subject: Trade deficit; Economic conditions; Recessions; Economic growth
Location: United States--US
Company / organization: Name: BNP Paribas; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651368348
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651368348?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. Stocks Rally Along With Oil Prices; Dow, S&P 500 Into Positive Territory for Year
Author: Scaggs, Alexandra
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
Commodities "have some sort of price stability... [which shows] global fears of a slowdown are somewhat overblown," said Jeff Yu, head of single-stock derivatives trading at UBS AG. A "very broad" range of investors were buying stocks Thursday, he added. [...]the bank is bullish on large-cap U.S. stocks, he said.
Full text: U.S. stocks rallied Thursday, as a rebound in oil prices and upbeat company news helped push benchmarks back into positive territory for the year. The Dow Jones Industrial Average rose 211.86 points, or 1.2%, to 17884.88, now up 0.3% for 2015. It closed with a yearly gain for the first time since Jan. 8. The S&P 500 gained 21.01 points, or 1%, to 2062.52, giving it a 0.2% yearly gain. The Nasdaq Composite Index added 48.39 points, or 1%, to 4765.10. Rising crude-oil prices fueled gains in materials and energy stocks. A monthslong commodity-price decline has recently fueled worries about global economic growth. And while oil prices remain volatile, a 14% rebound from their recent lows has assuaged some of those fears, strategists say. On Thursday, U.S. crude-oil futures rose 4.2% to settle at $50.48 a barrel. Materials shares led the S&P 500 higher, with a gain of 2.4%. Energy stocks outperformed the broader index, rising 1.4%. Commodities "have some sort of price stability... [which shows] global fears of a slowdown are somewhat overblown," said Jeff Yu, head of single-stock derivatives trading at UBS AG. A "very broad" range of investors were buying stocks Thursday, he added. Health-care stocks in the S&P 500 rallied 1.6% after Pfizer agreed to buy Hospira Inc., which makes injectable drugs and infusion technologies. Hospira shareholders will receive $90 a share in cash , representing a premium of 39% to Wednesday's closing price. Shares of Pfizer rose 2.9% and Hospira surged 35%. "Today re-emphasizes the growing confidence that companies have" to carry out deals, said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute. "You're seeing companies do some things to reward equity shareholders... the corporate sector is in a good position here." Because of that, the bank is bullish on large-cap U.S. stocks, he said. E.I. DuPont de Nemours and Co. was the best performer in the Dow, rallying 3.1% after it named two new directors to its board in a revamp. It excluded candidates nominated by activist investor Nelson Peltz's Trian Fund Management Corp. The bullish mood was also supported by improving fourth-quarter corporate earnings. With 309 companies in the S&P 500 having now reported, earnings were recently on pace to grow 3.5% from last year, according to FactSet, above initial forecasts for 1.1% of growth. Results have improved in recent days, bolstered by a blowout report from Apple Inc. And even without Apple, earnings are now on track to grow 1.7% from last year. Just last week, profits were on pace to shrink 0.5% excluding the tech giant. Earnings season "started atrociously...but overall, earnings are pretty good," said Dan Greenhaus, chief global strategist at New York brokerage firm BTIG. Thursday's stock gains follow a string of swings earlier this month. Stock-market volatility has picked up this year, driven in part by sharp moves in energy and currency markets. Driving the swings has been uncertainty about the impact of an expected interest-rate increase from the Federal Reserve, concerns about Greece and worries about global growth. But U.S. shares shrugged off rising tensions in negotiations between Greece and its creditors on Thursday , though benchmarks took a hit from the news during Wednesday's session. That day, the Dow gave up a gain of 116 points to end little changed after the European Central Bank said it would stop accepting Greek bonds as collateral for regular central bank loans. Greece's new leaders are seeking to ease conditions on its bailout program . The ECB's announcement, which was released after the close of European markets, weighed on Greek stocks and bonds Thursday. Germany's DAX slipped 0.1%, while Greece's Athex Composite fell 3.4%. Federal Reserve Bank of Boston President Eric Rosengren suggested Thursday that the dollar's rally has complicated the Fed's efforts to get annual consumer-price growth back to target. Investors also considered better-than-expected data on the labor market. Jobless claims in the week ended Jan. 31 rose by 11,000 to 278,000, the Labor Department said Thursday. Economists polled by The Wall Street Journal had expected 290,000 new claims. On Friday, the closely watched nonfarm payrolls report is expected to show the economy added 237,000 jobs in January , as the unemployment rate ticked down to 5.5% from 5.6%. In Asia, China's Shanghai Composite Index fell 1.2% and Japan's Nikkei Stock Average declined 1%, despite introduction of a new stimulus measure from the People's Bank of China. Gold futures slipped 0.1% to settle at $1272.00 an ounce. Treasury prices fell, pushing the yield on the 10-year Treasury note up to 1.815% from 1.794% Wednesday. Verizon Communications Inc. confirmed plans to sell a package of wireline assets to Frontier Communications Corp. for around $10 billion. Shares of Verizon rose 0.1%, while those of Frontier jumped 5.8%. Anthem Inc., the second-biggest health insurer in the U.S., fell 0.3% after it said hackers broke into a database containing personal information for about 80 million customers and employees. Write to Alexandra Scaggs at alexandra.scaggs@wsj.com Credit: By Alexandra Scaggs
Subject: Dow Jones averages; Central banks; Stock prices; Investments; Volatility
Location: United States--US
People: Peltz, Nelson
Company / organization: Name: Pfizer Inc; NAICS: 339113, 325412; Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651368831
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651368831?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Norway Oil Fund Divests Risky Assets; Fund Has Divested Itself From 114 Companies in the Past Three Years.
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
The $861 billion fund said it conducts risk assessments at company, sector and country level, and that it reviewed last year the impact of oil sands production on climate change and water management, the climate impact of coal-based electricity production, and the sustainability of mining and paper companies.
Full text: Norway's sovereign-wealth fund on Thursday said it divested itself from 49 risky assets in 2014 due to uncertainty about the sustainability of their business models. The world's biggest fund, which has been built on the country's oil and gas revenues, said it divested from companies that could be exposed to new climate and environmental regulations. The companies were predominantly in coal and gold mining. "We have gradually increased the scope of risk-based divestments, both geographically and thematically," said the fund's Chief Executive Yngve Slyngstad. "In total, we have divested from 114 companies in the past three years." Out of those divestments, 43 were exited due to the risk of deforestation, 35 due to water management issues, 22 on climate-related risks, and 14 companies were divested due to other, unnamed risks, the fund said. The figures were published in the fund's first report on responsible investment. The $861 billion fund said it conducts risk assessments at company, sector and country level, and that it reviewed last year the impact of oil sands production on climate change and water management, the climate impact of coal-based electricity production, and the sustainability of mining and paper companies. However, Norway's central bank, which oversees the fund's management, warned against using the fund as a climate policy tool in a way that could interfere with its financial targets. The fund voted on 10,519 general meetings in 2014, and currently makes its voting record public shortly after casting the vote. As of 2015, the fund plans to make its votes known in advance of important general meetings, in cases where such a move can be expected to affect the outcome of the vote. Norway's oil fund held 2,641 meetings last year with companies where it held shares, and has prepared special documents detailing its expectations on water management, children's rights and climate change. The fund is also mandated to exclude from its portfolio companies producing tobacco, nuclear weapons, and land mines, and companies that break human rights or damage the environment. Write to Kjetil Malkenes Hovland at Credit: By Kjetil Malkenes Hovland
Subject: Climate change; Meetings; Divestments; Environmental policy
Location: Norway
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651509712
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651509712?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
As Buyout Firms' Oil Bets Sour, Fees Help Keep Deals Sweet; Apollo's Results Hit by EP Energy Stake--But Thanks to Fees and Dividends, Investment Is Breaking Even
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract:
The EP buyout group, which includes energy-focused private-equity firm Riverstone Holdings LLC and South Korea's national oil company, owns about 86% of the Houston company's stock. After closing the deal for EP in May 2012, the firms and the company's management sold off several EP assets, including drilling fields in Egypt, Brazil and the Gulf of Mexico, bringing in $1.7 billion and focusing the company on its most-profitable drilling areas in the U.S. The private-equity firms have been involved owners, helping with the asset sales and visiting EP's offices multiple times each month, according to people familiar with the company.
Full text: Falling crude prices sliced into Apollo Global Management LLC's fourth-quarter results Thursday, as shares of its biggest oil-and-gas bet tumbled. But the private-equity firm has cushioned the pain from the investment. Apollo and other investors in the 2012 takeover of EP Energy Corp. reaped nearly $750 million in fees and dividends from the company before the energy producer sold shares in an initial public offering last year, according to securities filings. Thanks to those fees and dividends, which bolstered Apollo's profits in earlier quarters, the firm and the other investors remain around break-even on their $3.3 billion original investment. This comes even as EP Energy's stock price has tumbled by nearly half since last summer, slicing the value of their stake by about $2 billion. Fees have always been part of private equity's business equation, but they typically take a back seat to investment gains in a firm's success. Lately, the energy downdraft has highlighted just how fees and dividends can pile up--even if the underlying investment is looking like a dud. Private-equity firms, which combine their investors' cash with borrowed money to buy companies in the hope of selling them for a higher price later, have made huge bets on oil-and-gas production in recent years. The decline in oil prices since June has peeled away gains and pushed some investments deep into the red. In some deals, fees have been the only salve. A KKR & Co.-led group that bought Samson Resources Corp. in late 2011 has so far collected about $173 million in fees from the Tulsa, Okla., oil-and-gas producer. Those fees have been the only income KKR and its partners have received from Samson, where low commodity prices have helped wipe out the $4.1 billion in cash that the buyout group invested in the company. Fee income has taken on outsize importance since several big private-equity firms in the past decade have become publicly traded. Stock analysts generally assign fees twice the weight of deal profits in models they use to predict the future value of private-equity firms' shares. With fees, "you've got transparency; it's predictable. It's a very high-quality earnings stream," said Bulent Ozcan, an analyst with RBC Capital Markets. In contrast, deal profits are anything but guaranteed, Mr. Ozcan said. "It all depends on markets." Meanwhile, private-equity investors can pay themselves dividends from the companies they own as a way to recoup cash even before a company is sold. And dividends are distributed immediately to investors in private-equity funds who might otherwise wait years to receive deal profits. The EP buyout group, which includes energy-focused private-equity firm Riverstone Holdings LLC and South Korea's national oil company, owns about 86% of the Houston company's stock. None of the investors sold stock in the January 2014 IPO or after. Outside of about $40 million used to pay IPO expenses, the $704 million in proceeds from the stock sale effectively went to EP's private-equity owners. EP paid an $83 million termination fee so it could stop paying a $25 million-a-year management fee to its private-equity owners. It used $395 million to retire bonds that the company sold in late 2012 to raise cash for a dividend paid to its private-equity owners. The remainder, $186 million, was used to repay most of the $200 million that EP withdrew from its credit line five months earlier to pay another dividend. In addition to those payments to the buyout group, EP paid its owners more than $46 million in management fees between the acquisition and the IPO. Such fees, sometimes known as monitoring fees, are typically collected by firms in exchange for services such as investment banking and consulting. In many cases, a portion of the fees are shared with investors in the private-equity funds, such as pension funds and endowments. Apollo, for instance, rebates 68% of monitoring fees to investors in the fund that it tapped to buy EP, according to a person familiar with the matter. In all, the buyout investors' $750 million haul represents about 23% of the $3.3 billion of cash they put into the $7.15 billion deal. After closing the deal for EP in May 2012, the firms and the company's management sold off several EP assets, including drilling fields in Egypt, Brazil and the Gulf of Mexico, bringing in $1.7 billion and focusing the company on its most-profitable drilling areas in the U.S. The private-equity firms have been involved owners, helping with the asset sales and visiting EP's offices multiple times each month, according to people familiar with the company. The private-equity owners also steered EP to hedge its output heavily, these people said, something that has helped it gird against falling oil prices. EP says that it has locked in an average price of $91.19 a barrel for its expected oil production this year and has made arrangements to sell most of its 2016 output for a similar price. U.S. crude-oil futures were trading at about $50 a barrel Thursday; prices have plunged by half since hitting $107.26 a barrel last June. Analysts with Tudor, Pickering, Holt & Co. said EP's hedging for the next two years is "best in class" but that the stock has been dragged down by the company's heavy debt load. EP reported $4.4 billion of debt at the end of September--much of it taken on to help fund the buyout--about 50% more than the company's current stock-market value. Last month, Apollo's top energy-deal maker, Greg Beard, told Apollo shareholders at the firm's annual meeting that the hedges mean EP's cash flow should drop only about 4% from what the company expected before oil's plunge, meaning that it can slow drilling less drastically than rivals. "We're positioned for the offense," he said. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Fees & charges; Private equity; Acquisitions & mergers; Corporate profits; Prices; Investments; Dividends; Equity funds; Initial public offerings
Company / organization: Name: Samson Resources Corp; NAICS: 211111; Name: Apollo Global Management LLC; NAICS: 523920; Name: RBC Capital Markets; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651522742
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651522742?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Saudis Increase Oil Price in U.S., Cut It for Asia; U.S. Price to Go Up 15 Cents a Barrel, Asian Buyers to Pay 90 Cents Less, Saudi Aramco Says
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract: None available.
Full text: Saudi Arabia increased the oil prices it charges to U.S. buyers on Thursday but cut them in Asia as it shifts a battle over market share from America to the Far East. In an email to clients, Saudi Aramco said it was increasing its U.S. prices for light oil delivery in March by 15 cents a barrel, after a U.S. price reduction for the previous month. But it is now also cutting the price for Asia by 90 cents. Last fall, the world's largest oil exporter started sharp cuts in its prices in the U.S. as it sought to defend its share of the American market against a domestic production boom. The move contributed to global oil prices falling by more than half, as the effect was compounded by a Saudi-led decision to keep a production ceiling unchanged at the Organization of the Petroleum Exporting Countries meeting in November. Now the kingdom is also facing competition in Asia from many fellow OPEC producers, whose sales have been displaced from the U.S. Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651552031
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651552031?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Price Plunge to Affect Mexico's Private Tenders; Government Expects Less Profit as Companies Seek Greater Returns
Author: Montes, Juan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]05 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--The collapse of oil prices means Mexico's government will likely get less profit than initially expected from private tenders--the first in eight decades--as companies will seek greater returns in exchange for putting their money in the country, said the head of the agency in charge of organizing the bidding. "In a context of low prices, the government will capture a smaller share of profits...so that the contractor maintains a reasonable profitability," Juan Carlos Zepeda, the president of the National Hydrocarbons Commission, said in an interview Wednesday. Mexico is preparing to offer in coming months the first oil blocks for private investors in almost 80 years, after the congress passed in 2013 and 2014 historic legal changes to end the state monopoly on the industry. The implementation of the energy overhaul, President Enrique Peña Nieto's flagship economic proposal, comes at a difficult time, when a 60% decline in oil prices since July has forced major oil companies to cut investments. Mr. Zepeda also said the tenders for shale oil and gas, a complex and costly kind of resource, will be redefined as a consequence of the low prices. New plans for those blocks will be announced by April, while tenders for the rest of the blocks, including onshore, shallow- and deep-water remain on track. The tenders will include production-sharing contracts, profit-sharing contracts and licenses for exploration and production. Lower oil prices have already forced Mexico, which exports around 1.1 million barrels of crude a day, to cut public spending this year by about $8.3 billion, since oil and related taxes account for about a third of the federal budget. State-owned oil company Petróleos Mexicanos will make half of the cuts, and is also implementing an austerity program. Some analysts say current conditions are highly unfavorable to guarantee the success of Mexico's oil tenders, but Mr. Zepeda disagrees. "Mexico is offering extremely competitive blocks, some of them with proven reserves under the ground. It could happen that, in a moment of austerity in the oil sector, firms select their investments more carefully and Mexico benefits from that," he said. For Mr. Peña Nieto's government, a successful implementation of the energy reform is critical to offset in the future the impact of low oil prices on public finances, and to achieve a promised 5% growth rate by the end of the administration in 2018. By then, new investments as a result of the private-sector participation are expected to add 500,000 barrels a day to the country's production, which is currently less than 2.4 million barrels a day. "President Peña Nieto and his team can't afford to fail on this reform," said Leo Zuckermann, a political analyst at the CIDE social-sciences research center. "It would be a disaster if some tenders are declared deserted, or if there are few participants." In a way, Mr. Peña Nieto's energy overhaul suffered from bad luck. The vertiginous decline in oil prices began last summer, around the time that Mexico's congress was approving legislation for the private bidding processes, and implementation of the overhaul began at a time of great uncertainty in the oil market. "This is a coincidence that is testing Mexico's competitiveness compared with other regions in the world," Mr. Zepeda said. As the head of the hydrocarbons commission, Mr. Zepeda will have a key role in successfully tendering the blocks. The commission was strengthened by the energy reform, and will be in charge of organizing the tenders and awarding and supervising the contracts. Mr. Zepeda said the flexible oil model adopted by Mexico offers protection for the country. When oil prices eventually go up again, the government's share of profits will also increase, as contracts will include provisions to automatically adjust economic terms according to the oil price. "We are also open to making any change to contracts if that is needed to make Mexico more competitive, or if participants ask us to," Mr. Zepeda said. Mexico plans to offer 169 blocks for exploration and production with estimated resources of about 20 billion barrels of oil equivalent in several tenders throughout the year. Investment of $8.5 billion a year over the next four years will be needed to develop the blocks, according to government estimates. The first bids include 14 blocks in shallow waters of the Gulf of Mexico, and are expected to be awarded July 15. The winners of deep-water blocks, eagerly awaited by most oil international majors, will be announced around November, Mr. Zepeda said. Top officials at the hydrocarbons commission have held meetings with dozens of interested oil companies, foreign and national, among them giants such as Shell and Exxon Mobil. Mr. Zepeda said he expects oil prices to recover "gradually and moderately" in the coming years, to about $68 in 2018. Mexico's export crude mix priced Wednesday around $45, compared with an average price of $95.56 in July last year. Write to Juan Montes at juan.montes@wsj.com Credit: By Juan Montes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 5, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651552327
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651552327?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Takes Big Swing in Opposite Direction; Price Gains 4.2% a Day After Falling 8.7%; 'It's Yo-Yoing'
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: Oil rebounded from sharp losses in another big swing, as traders jockeyed to find the bottom of a selloff that has cut prices by 53% since June. Some in the market are focusing on the persistent global supply glut that sparked the decline, which took prices to nearly six-year lows. Others, however, are looking ahead to the likelihood of curtailed oil output in several months, a potentially bullish development that already has bolstered investor sentiment about oil prices. Exacerbating the volatility are short-term traders, who are quick to pile into a bounce but are also just as quick to pull out on any sign of a reversal, market participants say. The price of benchmark U.S. oil futures gained $2.03, or 4.2%, to $50.48 a barrel on the New York Mercantile Exchange. Thursday's move came after an 8.7% slide on Wednesday, following data showing that U.S. crude supplies had climbed to their highest level in about 80 years. That decline, in turn, erased gains from Tuesday, which capped the biggest four-day winning streak in percentage terms since January 2009. "It's yo-yoing," said Donald Morton, senior vice president at Herbert J. Sims & Co. "Is this just a sympathetic bounce off the beating yesterday? Most likely. I don't think there's anything serious behind this." The CBOE Crude Oil Volatility Index is at its highest level since 2011, according to FactSet. It tracks investor expectations for price swings based on options on the United States Oil Fund LP, an exchange-traded fund. Oil extended gains in the after-hours session after Saudi Arabia cut the official price for its high-quality oil in Asia while raising the price in the U.S. Saudi price cuts to the U.S. in recent months have weighed on the market. Some investors saw those moves as a signal that Saudi Arabia will keep oil flowing into an oversupplied market to maintain market share at the expense of U.S. shale-oil producers. The country's latest price moves indicate that "they don't want to concede market share in Asia," said Vikas Dwivedi, global oil-and-gas economist at Macquarie Group. Mr. Dwivedi believes investors have overstated the strategic significance of Saudi Arabia's pricing decisions, saying those decisions are more often based on price trends among various types of crude and refining margins. Crude also received support from a weaker U.S. dollar Thursday, said Myrto Sokou, research analyst at Sucden Financial. Oil, a dollar-denominated commodity, becomes more affordable to buyers using other currencies when the dollar is weaker. Some investors say oil is due to hit bottom soon because the number of rigs drilling for oil in the U.S. has sunk to a three-year low and major oil companies are cutting back on investment. Both signs point to lower output in coming months or years, which eventually will support prices, experts say. However, analysts expect global oil production and inventory levels to remain high through the first half of 2015. Adding to the oversupply, Brazil and Iraq are producing almost one million barrels a day more oil than a year ago, JBC Energy estimates. "Nobody wanted to miss coming off the lows," said James Marshall, partner at brokerage Atlas Commodities LLC. "Nobody wanted to be that guy that watched it fall 50% and then watched it rally 20% and did nothing." However, Mr. Marshall said, trading is also active in the options market as investors try to limit potential losses. Brent, the global benchmark, rose $2.41, or 4.4%, to $56.57 a barrel on ICE Futures Europe. After falling so sharply for so long, "we need a new daily dose of bearish information to really continue to drop," said Gene McGillian, senior analyst at Tradition Energy. "We're still in the process of trying to stabilize." Gasoline futures rose 4.31 cents, or 2.9%, to $1.5248 a gallon. Diesel futures rose 3.93 cents, or 2.2%, to $1.8059 a gallon. Georgi Kantchev and Benoît Faucon contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651621306
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651621306?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Australian, Japanese Stocks Rise, Helped by Higher Oil
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
The grim outlook gives Australia room to further cut interest rates, staying in step with other central banks that have moved to ease policy settings in the past month amid weak growth and the deflationary impact of plunging crude-oil prices.
Full text: Stocks in Japan and Australia rose Friday, benefiting from a spike in crude oil prices while Chinese stocks fell amid concerns over the economy. The Nikkei Stock Average was up 0.7% while Australia's S&P/ASX 200 was up 0.2%. The Australian benchmark was headed for its 12th straight day of gains, even after the country's central bank Friday lowered both its medium-term forecasts for inflation and economic growth, saying the economy won't grow fast enough in the next year to prevent a further rise in unemployment. The grim outlook gives Australia room to further cut interest rates, staying in step with other central banks that have moved to ease policy settings in the past month amid weak growth and the deflationary impact of plunging crude-oil prices. Investors also continued to watch volatility in the oil market, where WTI crude prices were up 1.5% at $51.21 a barrel in Asia trade. "The snapback in the crude market could be yet another sign that energy prices are starting to find a bottom, which would carry great significance for financial markets," says Allianz Global Investors chief investment officer Kazuyuki Terao. "We probably will have to wait until the second half of the year to know this definitively, however." The rise in oil is good for energy stocks, and also helps lift Japanese inflation, a long-time policy goal. "Tonight's U.S. jobs data will of course be closely eyed, but I'm also looking for signs of wage growth, since a tighter labor market has not really shown strong signs of getting more purchasing power in the hands of average consumers," added Mr. Terao. In China, stocks were on track for their third weekly decline with the Shanghai Composite Index down 0.7%. It would be the longest weekly downtrend since May last year, as the market has been battered in recent weeks by consistently poor economic data and concerns over curbs on the amount of leverage in the market, despite the central bank's move this week to cut the reserve requirement for banks. Hong Kong's Hang Seng Index was flat. Bradford Frischkorn, Daniel Inman and James Glynn contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Subject: Central banks; Stock exchanges; Crude oil prices; Banking; Investments
Location: Australia Japan
Company / organization: Name: Allianz Global Investors; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651626431
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651626431?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
BOJ Won't Act if CPI Falls on Oil Plunge; Central Bank More Focused on Domestic Drivers of Inflation, People Close to the BOJ Say
Author: Ito, Tatsuo; Nakamichi, Takashi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
What the central bank's nine-member policy board is really focused on is whether the underlying causes of inflation, such as increases in wages, economic growth, and a tightening labor market, are on course toward helping the BOJ reach its 2.0% price growth target, the people say.
Full text: TOKYO--The Bank of Japan wouldn't necessarily take fresh easing action if the consumer price index slides into negative territory, provided that the reason is due to plunging oil prices, people familiar with the central bank's thinking say. "It wouldn't come as a surprise" if the inflation rate turns negative, one of the people told The Wall Street Journal, brushing aside speculation that a falling CPI would automatically prompt the BOJ to act. What the central bank's nine-member policy board is really focused on is whether the underlying causes of inflation, such as increases in wages, economic growth, and a tightening labor market, are on course toward helping the BOJ reach its 2.0% price growth target, the people say. The remarks are the latest example of how people close to the central bank have been modifying the explanation for its decision to ease in October, which led market participants to believe that abrupt drops in oil prices triggered the move to ramp up asset purchases. As oil prices have shown no clear signs of bottoming out after plummeting more than 50% from last year's peak, the central bank acknowledges that a further slowdown in Japan's inflation rate is likely, although it hasn't publicly predicted that the CPI will turn negative. The BOJ estimates the core CPI--stripping out volatile food prices--would slip below zero if oil prices sink below $40 a barrel and stay there for a while, those people say. Prices for oil stood at around $54.20 a barrel on Friday morning. Excluding the effects of a sales-tax increase that took effect last year, the core CPI slowed to a 0.5% on-year rise in December after hitting a peak of a 1.5% increase last April. Private economists largely predict fresh action by the BOJ sometime between April and October and don't expect any major changes to its key policy when its policy board meets on Feb. 17-18. BOJ officials are bullish about the prospects for Japan's economy, but there is some uncertainty after the economy fell into a recession last year. One of the people familiar with the BOJ's thinking said the prospects of consumer spending strongly "bouncing back" from a drop-off in demand after an increase in the sales tax last April remain modest. Consumer spending is viewed by the BOJ as a key driver for its bullish 2.1% forecast for economic growth in the business year starting this April. Bright spots for the economy include further improvements in Japan's exports and industrial production. The BOJ board will discuss whether to upgrade its view on these components at its upcoming meeting, the person added. Faced with sharp falls in oil prices, the government has in recent weeks taken a flexible stance on inflation by abandoning its call for the BOJ to hit its 2.0% inflation target "at the earliest possible time." Write to Tatsuo Ito at tatsuo.ito@wsj.com and Takashi Nakamichi at takashi.nakamichi@wsj.com Credit: By Tatsuo Ito And Takashi Nakamichi
Subject: Central banks; Monetary policy; Inflation; Recessions; Consumer Price Index; Economic growth
Location: Japan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651637251
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651637251?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
New Rules for Tank Cars Sent to White House for Review; Proposed Regulations Come in Response to Series of Oil-Train Accidents
Author: Tita, Bob
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: Federal railroad regulators have forwarded their final draft of new regulations for tank cars that haul crude oil and other flammable liquids to the White House for review. The review by the Office of Information of Regulatory Affairs is one of the last steps before the implementation of new tank-car standards and operating procedures. The U.S. Department of Transportation's Federal Railroad Administration declined to comment Thursday on whether there have been amendments to the rules proposed in July that called for an accelerated schedule for replacing or retrofitting older tank cars carrying flammable liquids to make them more puncture-resistant during derailments. Tank cars carrying crude oil would have to be retrofitted within two years of the start of the new rules, and those carrying ethanol would have to be upgraded in three years. Cars carrying other flammable liquids, such as heating oil and chemicals, would have five years to be upgraded. There are also proposals for thicker steel tank walls, new brakes on tank cars, train speed limits and special routes around populated areas. The proposed regulations came in response to a series of oil-train accidents that began in July 2013 with a derailment and explosion of tank cars in Lac-Mégantic, Quebec, that killed 47 people. Oil companies have said track problems and human error caused the accidents, while railroads have questioned the crashworthiness of tank cars and questioned the combustibility of the oil. The proposals attracted thousands of public comments, particularly from tank-car owners and shippers. They have maintained there aren't enough shops to retrofit tanks cars in time to meet the proposed deadlines, and that tens of thousands of cars would be idled as a result, forcing oil and ethanol to be moved by trucks. Transportation Secretary Anthony Foxx described the regulations as a top priority involving a complex issue that required "massive staff time, scientific study" and "dialogue with stakeholders and experts." "The American people must have confidence that when hazardous materials are transported through their communities, we've done everything in our power to make that train as safe as possible," Mr. Foxx said in a written statement Thursday. The Office of Information and Regulatory Affairs didn't immediately respond to a request for comment. The office is responsible for reviewing new regulations for inconsistencies with other federal policies, as well as conducting a cost and benefit analysis and determining whether the regulations improve health and safety and promote economic growth and job creation. The office accepts public comments on new regulations during its review period, which typically lasts up to 90 days. Write to Bob Tita at robert.tita@wsj.com Credit: By Bob Tita
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651646103
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651646103?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Takes Big Swing In Opposite Direction --- Price Gains 4.2% a Day After Falling 8.7%; 'It's Yo-Yoing'
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Feb 2015: C.4. [Duplicate]
Abstract:
Some investors saw those moves as a signal that Saudi Arabia will keep oil flowing into an oversupplied market to maintain market share at the expense of U.S. shale-oil producers.
Full text: Oil rebounded from sharp losses in another big swing, as traders jockeyed to find the bottom of a selloff that has cut prices by 53% since June. Some in the market are focusing on the persistent global supply glut that sparked the decline, which took prices to nearly six-year lows. Others, however, are looking ahead to the likelihood of curtailed oil output in several months, a potentially bullish development that already has bolstered investor sentiment about oil prices. The price of benchmark U.S. oil futures gained $2.03, or 4.2%, to $50.48 a barrel on the New York Mercantile Exchange. Thursday's move came after an 8.7% slide on Wednesday, following data showing that U.S. crude supplies had climbed to their highest level in about 80 years. That decline, in turn, erased gains from Tuesday, which capped the biggest four-day winning streak in percentage terms since January 2009. "It's yo-yoing," said Donald Morton, senior vice president at Herbert J. Sims & Co. "Is this just a sympathetic bounce off the beating yesterday? Most likely. I don't think there's anything serious behind this." The CBOE Crude Oil Volatility Index is at its highest level since 2011, according to FactSet. It tracks investor expectations for price swings based on options on the United States Oil Fund LP, an exchange-traded fund. Oil extended gains in the after-hours session after Saudi Arabia cut the official price for its high-quality oil in Asia while raising the price in the U.S. Saudi price cuts to the U.S. in recent months have weighed on the market. Some investors saw those moves as a signal that Saudi Arabia will keep oil flowing into an oversupplied market to maintain market share at the expense of U.S. shale-oil producers. The country's latest price moves indicate that "they don't want to concede market share in Asia," said Vikas Dwivedi, global oil-and-gas economist at Macquarie Group. Mr. Dwivedi believes investors have overstated the strategic significance of Saudi Arabia's pricing decisions, saying those decisions are more often based on price trends among various types of crude and refining margins. Some investors say oil is due to hit bottom soon because the number of rigs drilling for oil in the U.S. has sunk to a three-year low and major oil companies are cutting back on investment. Both signs point to lower output in coming months or years, which eventually will support prices, experts say. However, analysts expect global oil production and inventory levels to remain high through the first half of 2015. Adding to the oversupply, Brazil and Iraq are producing almost one million barrels a day more oil than a year ago, JBC Energy estimates. "Nobody wanted to miss coming off the lows," said James Marshall, partner at brokerage Atlas Commodities LLC. "Nobody wanted to be that guy that watched it fall 50% and then watched it rally 20% and did nothing." --- Georgi Kantchev and Benoit Faucon contributed to this article. Credit: By Nicole Friedman
Subject: Petroleum industry; Market shares; Petroleum production; Price cuts; Commodity prices; Crude oil
Location: United States--US Asia Saudi Arabia
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Macquarie Group; NAICS: 523110; Name: United States Oil Fund LP; NAICS: 523920
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Feb 6, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651672259
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651672259?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
As Oil Bets Sour, Fees Help Keep Deals Sweet
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Feb 2015: C.1.
Abstract:
The EP buyout group, which includes energy-focused private-equity firm Riverstone Holdings LLC and South Korea's national oil company, owns about 86% of the Houston company's stock. After closing the deal for EP in May 2012, the firms and the company's management sold off several EP assets, including drilling fields in Egypt, Brazil and the Gulf of Mexico, bringing in $1.7 billion and focusing the company on its most-profitable drilling areas in the U.S. The private-equity firms have been involved owners, helping with the asset sales and visiting EP's offices multiple times each month, according to people familiar with the company.
Full text: Falling crude prices sliced into Apollo Global Management LLC's fourth-quarter results Thursday, as shares of its biggest oil-and-gas bet tumbled. But the private-equity firm has cushioned the pain from the investment. Apollo and other investors in the 2012 takeover of EP Energy Corp. reaped nearly $750 million in fees and dividends from the company before the energy producer sold shares in an initial public offering last year, according to securities filings. Thanks to those fees and dividends, which bolstered Apollo's profits in earlier quarters, the firm and the other investors remain around break-even on their $3.3 billion original investment. This comes even as EP Energy's stock price has tumbled by nearly half since last summer, slicing the value of their stake by about $2 billion. Fees have always been part of private equity's business equation, but they typically take a back seat to investment gains in a firm's success. Lately, the energy downdraft has highlighted just how fees and dividends can pile up -- even if the underlying investment is looking like a dud. Private-equity firms, which combine their investors' cash with borrowed money to buy companies in the hope of selling them for a higher price later, have made huge bets on oil-and-gas production in recent years. The decline in oil prices since June has peeled away gains and pushed some investments deep into the red. In some deals, fees have been the only salve. A KKR & Co.-led group that bought Samson Resources Corp. in late 2011 has so far collected about $173 million in fees from the Tulsa, Okla., oil-and-gas producer. Those fees have been the only income KKR and its partners have received from Samson, where low commodity prices have helped wipe out the $4.1 billion in cash that the buyout group invested in the company. Fee income has taken on outsize importance since several big private-equity firms in the past decade have become publicly traded. Stock analysts generally assign fees twice the weight of deal profits in models they use to predict the future value of private-equity firms' shares. With fees, "you've got transparency; it's predictable. It's a very high-quality earnings stream," said Bulent Ozcan, an analyst with RBC Capital Markets. In contrast, deal profits are anything but guaranteed, Mr. Ozcan said. "It all depends on markets." Meanwhile, private-equity investors can pay themselves dividends from the companies they own as a way to recoup cash even before a company is sold. And dividends are distributed immediately to investors in private-equity funds who might otherwise wait years to receive deal profits. The EP buyout group, which includes energy-focused private-equity firm Riverstone Holdings LLC and South Korea's national oil company, owns about 86% of the Houston company's stock. None of the investors sold stock in the January 2014 IPO or after. Outside of about $40 million used to pay IPO expenses, the $704 million in proceeds from the stock sale effectively went to EP's private-equity owners. EP paid an $83 million termination fee so it could stop paying a $25 million-a-year management fee to its private-equity owners. It used $395 million to retire bonds that the company sold in late 2012 to raise cash for a dividend paid to its private-equity owners. The remainder, $186 million, was used to repay most of the $200 million that EP withdrew from its credit line five months earlier to pay another dividend. In addition to those payments to the buyout group, EP paid its owners more than $46 million in management fees between the acquisition and the IPO. Such fees, sometimes known as monitoring fees, are typically collected by firms in exchange for services such as investment banking and consulting. In many cases, a portion of the fees are shared with investors in the private-equity funds, such as pension funds and endowments. Apollo, for instance, rebates 68% of monitoring fees to investors in the fund that it tapped to buy EP, according to a person familiar with the matter. In all, the buyout investors' $750 million haul represents about 23% of the $3.3 billion of cash they put into the $7.15 billion deal. After closing the deal for EP in May 2012, the firms and the company's management sold off several EP assets, including drilling fields in Egypt, Brazil and the Gulf of Mexico, bringing in $1.7 billion and focusing the company on its most-profitable drilling areas in the U.S. The private-equity firms have been involved owners, helping with the asset sales and visiting EP's offices multiple times each month, according to people familiar with the company. The private-equity owners also steered EP to hedge its output heavily, these people said, something that has helped it gird against falling oil prices. EP says that it has locked in an average price of $91.19 a barrel for its expected oil production this year and has made arrangements to sell most of its 2016 output for a similar price. U.S. crude-oil futures were trading at about $50 a barrel Thursday; prices have plunged by half since hitting $107.26 a barrel last June. Analysts with Tudor, Pickering, Holt & Co. said EP's hedging for the next two years is "best in class" but that the stock has been dragged down by the company's heavy debt load. EP reported $4.4 billion of debt at the end of September -- much of it taken on to help fund the buyout -- about 50% more than the company's current stock-market value. Last month, Apollo's top energy-deal maker, Greg Beard, told Apollo shareholders at the firm's annual meeting that the hedges mean EP's cash flow should drop only about 4% from what the company expected before oil's plunge, meaning that it can slow drilling less drastically than rivals. "We're positioned for the offense," he said.
Credit: By Ryan Dezember
Subject: Fees & charges; Private equity; Acquisitions & mergers; Corporate profits; Crude oil prices; Investments; Dividends; Equity funds; Initial public offerings; Petroleum industry
Company / organization: Name: Samson Resources Corp; NAICS: 211111; Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: Apollo Global Management LLC; NAICS: 523920; Name: EP Energy-Houston TX; NAICS: 211111
Classification: 2330: Acquisitions & mergers; 3100: Capital & debt management; 8130: Investment services; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651672266
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651672266?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Statoil Steps Up Cost-Cuts After Loss; Norwegian Company Driven to Loss by Falling Oil Prices, Impairments
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: LONDON--Norway's Statoil AS said Friday that it would reduce capital expenditure by 10% and step-up cost cutting to defend its dividend payments, as falling oil prices and impairments pushed it to a fourth-quarter net loss. The measures were the latest taken by a big oil company to cope with oil prices that have more than halved since June, plummeting to less than $60 a barrel for Brent crude. BP PLC posted a replacement-cost loss of nearly $1 billion this week, and Royal Dutch Shell PLC and Chevron Corp. announced lowered earnings and spending cutbacks recently. Statoil showed a net loss for the three months through December of 8.9 billion Norwegian kroner ($1.18 billion) compared with a net profit of 14.8 billion kroner a year earlier. The company's stock was up slightly in midday trading. The results were Statoil's second quarterly net loss in a row, and the company's only two quarterly net losses since it was listed in 2001. Eldar Sætre, the company's new CEO, said Friday the company had reduced its U.S. onshore spending by between 20% and 25% in 2014 and has flexibility to delay upcoming projects to maintain its dividend while avoiding too high debt. "The situation is quite serious," Mr. Sætre told The Wall Street Journal in an interview at the company's capital markets day. "We haven't stopped any of our ongoing projects, they're moving forward. But we've reduced activity quite significantly, including U.S. onshore." Statoil didn't specify where in the U.S. it was scaling back spending, but the company has operations in the Bakken, Eagle Ford and Marcellus shale areas. In the fourth quarter, the company divested part of its Marcellus asset to Southwestern Energy for $394 million in cash, reducing its stake to 23% from 29%. "A few years ago, we invested $4 billion annually [in the U.S.], a level that's currently more than halved," Statoil's Chief Financial Officer Torgrim Reitan told The Wall Street Journal. "With today's price level it's natural to reduce the rig count. We are also working really hard to reduce costs." The company said it was cutting costs to avoid delays in projects still in the planning stage including the Johan Castberg field in Norway's Barents Sea, Bay du Nord off Canada, the Bressay heavy oil field off the U.K., a project to boost output at Snorre off Norway, U.S. onshore projects and a liquefied natural gas project in Tanzania. The company said it would lower its capital expenditure to $18 billion this year from previous guidance of $20 billion. The company's cost-cutting program, taking effect from 2016, will be expanded to $1.7 billion a year from $1.3 billion, it said. Revenue rose slightly on the year to 147 billion kroner from a restated 146.5 billion kroner a year earlier, against expectations of 150.07 billion kroner. Statoil said earnings were hurt by plunging oil prices and impairments, mainly on its international operations and exploration assets. Though the results were disappointing, analysts and investors seemed heartened by strong production, increased cash flow and a proposed a dividend of 1.80 kroner a share for the fourth quarter, in line with the previous quarters. Like other oil companies, Statoil's dividend and capital expenditure is set to outstrip its cash flow this year, indicating a need to take on more debt. The company's gearing--or debt as a percentage of its capital--was 20% at the end of the fourth quarter, up from 14% a year earlier. Mr. Reitan said Statoil can "operate within a debt ratio of 15% to 30%, while increasing our production and investing heavily in Johan Sverdrup, and paying a competitive dividend." Statoil said it produced 2.103 million barrels of oil equivalent a day in the quarter, up 8% from a year earlier. The recent oil price plunge is an opportunity for Statoil to force supply-chain costs lower and improve the economics of upcoming projects, Mr. Reitan said. "This is mainly a very good opportunity to create even more value, but that also means that projects must wait," he said. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651673708
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651673708?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Companies in the Cross Hairs of Libyan Violence; Long-Term Investments by Western Operators Have Been Upended, Driving Down Production
Author: Faucon, Benoît; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: The violence roiling Libya has increasingly targeted oil companies and their assets, upending long-term investments by Western companies and driving down production in a country that helped trigger the world-wide rout in oil prices. In short order, Libyan oil output has fallen to about 325,000 barrels a day in January from nearly 900,000 barrels a day in October, largely because of oil fields being taken over by Libyan militias or shutdowns due to security concerns, according to officials at the state-owned National Oil Co. The plunge in production comes after civil war broke out mid-2014, leading to two big closures at the end of the year. French major Total SA closed the Mabruk oil field in central Libya, a facility that once produced 30,000 to 40,000 barrels a day. And the country's main oil port, known as Sidra, was closed because of fighting, damping prospects for three U.S. companies that have a stake in fields connected to the port--ConocoPhillips, Marathon Oil Corp. and Hess Corp. Both sites were in the cross hairs of gunmen on Tuesday . There was fighting in the vicinity of Sidra, while at Mabruk at least nine guards were killed in an attack, said Mashallah al-Zawie, a top Libyan oil official. Libya has been mired in violence and political divisions since longtime dictator Moammar Gadhafi was killed in an uprising in 2011. A civil war has broken out between the internationally recognized government based in the country's east and a rebel faction known as Libya Dawn that controls the country's capital of Tripoli. Crude has long been the lifeblood of the country, home to Africa's largest oil reserves. Born in the 1950s, Libya's oil industry was producing more than three million barrels a day by the late 1960s. Just before the Gadhafi regime was toppled in 2011, the country was exporting 1.3 million barrels a day from a production of 1.6 million barrels a day. "There was an implicit agreement between the different factions to avoid disrupting oil production," said Richard Mallinson, an analyst at London-based consultancy Energy Aspects. "Now the parties have realized that controlling oil means power." The instability has affected other Western energy companies in the country. Late December, Wintershall Holding GmbH shut down its Libyan production because of the fighting at Sidra, which is close to the Ras Lanuf and Zueitina terminals it uses. The German company says it has invested more than $2 billion in Libya for a daily production capacity of 90,000 barrels. Austria's OMV AG said its North African business also was being hurt by the unrest. The company is a partner in oil fields in central and southern Libya where it says it produced an average of 8,000 barrels a day last year. "The outlook in 2015 is even tougher," OMV Chief Executive Gerhard Roiss said recently, citing both lower oil prices and the Libyan crisis at a briefing for the company's quarterly update. "In Libya, this situation is not changing; it's deteriorating." Earlier in 2014, the situation wasn't so dire. Despite fighting raging in Tripoli last summer, Libya surprised the world with a sudden burst of new oil. By October, the country was pumping 887,000 barrels a day, up from 232,000 in June, according to the Organization of the Petroleum Exporting Countries, of which Libya is a member. Global prices for crude have tumbled as investors realized that a glut of oil was hitting the market despite volatility in places such as Libya. In six months, the price of Brent crude plunged to less than $50 a barrel in January, from a high of $115 a barrel in June. On Friday, it was trading at around $58 a barrel. Lately, the market has reacted little to the renewed fighting in Libya and the cutback in supplies there. Analysts say OPEC's decision in November not to cut production virtually guaranteed an oversupply whether Libya produces or not. "Libya became irrelevant," said Tamas Varga, oil analyst at brokerage PVM in London. The combination of falling prices and the threat of violence has chilled oil-company activity in Libya. At the Sidra oil terminal, ConocoPhillips, Marathon Oil and Hess were part of a rush to return to Libya after economic sanctions were lifted against the Gadhafi regime in 2003, supplying a port that recently was exporting 300,000 barrels a day. But around the new year, seven storage tanks at the port were burned, including two that completely collapsed, and no exports have restarted, according to Libyan oil officials. ConocoPhillips said last week that its production levels in Libya last year fell to 8,000 barrels a day of oil equivalent on average, compared with 30,000 barrels a day in 2013. ConocoPhillips and Hess didn't respond to requests for comment. Marathon declined to comment. The fighting hasn't affected Libya's offshore production, which for now is out of reach of the belligerents. Two offshore fields operated by Italy's Eni SpA and Total joint ventures amount to about 100,000 barrels a day. Other oil output largely comes from desert fields in far-out areas of western and eastern Libya that have been spared by the civil war. But in general the fighting has dealt Libya's oil sector a heavy blow, officials and experts say. Even if there is peace, said Geoff Porter, head of political risk firm North Africa Risk Consultancy, "you won't see an immediate return of previous production levels." Write to Benoît Faucon at benoit.faucon@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Corrections & Amplifications The surname of Geoff Porter, head of political risk firm North Africa Risk Consultancy, was incorrectly given as Port in an earlier version of this article. Credit: By Benoît Faucon and Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651673745
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651673745?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Oil Boom a 'Game-Changer' on Trade Deficit
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]06 Feb 2015: A.2.
Abstract:
While rising U.S. oil production and falling prices helped push petroleum imports to a five-year low in 2014, that only masked strong demand for other foreign-made goods brought on by steady economic growth and, most recently, an appreciating dollar.
Full text: The U.S. oil boom is redrawing America's trade picture. Petroleum imports accounted for less than 20% of the nation's trade deficit last year, down from more than 40% only five years earlier, according to figures for 2014 released Thursday. But the overall U.S. appetite for overseas goods didn't diminish over the period, which started with the global economy's first full year of expansion after the 2007-09 recession. Imports of just about everything else have surged as Americans substitute other goods for foreign oil, leaving a growing trade deficit. "If we hadn't had this oil boom, I think our deficit would be lot larger than it is right now," said IHS Global Insight economist Patrick Newport. "It's a game-changer." For the full year, U.S. exports rose 2.9% from 2013 to $2.345 trillion, and imports climbed 3.4% to $2.850 trillion, leaving a deficit of $505.05 billion. Adjusted for inflation, the gap between imports and exports was the biggest since 2008, before the full force of the recession battered global trade. While rising U.S. oil production and falling prices helped push petroleum imports to a five-year low in 2014, that only masked strong demand for other foreign-made goods brought on by steady economic growth and, most recently, an appreciating dollar. The net result may mean slower U.S. economic growth. The Commerce Department last month said gross domestic product, the broadest measure of economic output, expanded at a 2.6% annual pace in the final three months of the year. That figure may be lowered in forthcoming revisions. Following December's trade data, which showed flagging exports and rising imports in the final month of the year, economists at Barclays and BNP Paribas set their fourth-quarter GDP estimate at 2.3%, High Frequency Economics at 2.1% and J.P. Morgan Chase at 2%. "It is not hard to come up with reasons for the weakness in today's report --sluggish foreign growth and a strong dollar are the obvious ones," Michael Feroli, chief U.S. economist at J.P. Morgan, said in a note to clients. The relative strength of the U.S. economy also has helped boost the value of the dollar, making foreign goods and services relatively more affordable and U.S. exports more expensive in overseas markets. The euro, for example, is down more than 8% against the dollar over the past three months. J&S Chemical of Canton, Ga., has been trying to expand sales in Europe, but the sudden change in currency values wiped out what the company had seen as a price advantage. Overseas sales account for about 40% of the company's business, so the maker of industrial lubricants and other chemicals isn't giving up. But it may have to rethink its strategy for the continent and eventually squeeze its profits. "It's something we're looking at in the future, we might have to lower prices a little bit -- give them a discount so we stay competitive in the market," said Thomas Smith, global sales director at J&S. Mr. Smith said the lead time on many purchases is up to a year so the full effects of a stronger dollar may not yet be apparent. "I think this will affect definitely our future business and existing business in six to 12 months," he said. "It's definitely something we are keeping an eye on and a little bit worried about . . . if the dollar continues to strengthen and strengthen." For the full year, U.S. exports of industrial supplies -- including precious metals, fuel oil, chemicals, cotton and coal -- fell by $2.5 billion. Sales to foreign markets of consumer goods took a step back in December but were up for the full year. Exports of capital goods, such as industrial machinery, aircraft and semiconductors, climbed. "Slow economic growth in the rest of the world should constrain export growth while strong growth in U.S. domestic demand likely will pull in increasing amounts of imports," said Jay Bryson, global economist at Wells Fargo. Credit: By Jeffrey Sparshott
Subject: Recessions; Economic growth; US exports; US imports; International trade; Gross Domestic Product--GDP; Trade deficit; Economic conditions -- United States--US; Petroleum industry
Location: United States--US
Company / organization: Name: BNP Paribas; NAICS: 522110
Classification: 1110: Economic conditions & forecasts; 1300: International trade & foreign investment; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Feb 6, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651705033
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651705033?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Post Biggest One-Week Gain Since 2011; Investors Bet Prices May Have Bottomed, But Analysts Caution About Oversupply
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
Prices spiked briefly at midday after oil-field-services company Baker Hughes Inc.'s data showed the number of rigs drilling for oil in the U.S. fell by 83 in the latest week, the ninth weekly loss in a row, to the lowest level since December 2011.
Full text: Oil prices posted their largest weekly percentage gain in almost four years as traders looked past the current world-wide glut of crude to focus on signals of future production cuts. Some market participants said oil prices, which have fallen 52% in the past seven months, could be bottoming out as producers have reacted to the low prices by cutting expenditures and reducing drilling activity. But many analysts caution that the global oil market still is oversupplied and there are few signs of a major uptick in demand, so prices could slip yet again. The market was volatile this past week, posting a one-month high Tuesday before falling Wednesday and then regaining those losses by week's end. U.S. oil for March delivery settled up $1.21, or 2.4%, Friday at $51.69 a barrel on the New York Mercantile Exchange. Prices gained 7.2% for the week, the largest weekly percentage gain since February 2011. Brent, the global benchmark, rose $1.23, or 2.2%, to $57.80 a barrel on ICE Futures Europe. Prices rose 9.1% for the week. Prices spiked briefly at midday after oil-field-services company Baker Hughes Inc.'s data showed the number of rigs drilling for oil in the U.S. fell by 83 in the latest week, the ninth weekly loss in a row, to the lowest level since December 2011. The continued drop in the rig count indicates that producers are pulling back on oil exploration and new drilling. This past week's data showed a large drop in horizontal rigs, which are used in shale-oil drilling. In addition, the largest drop in oil rigs was in the Permian Basin, one of the three key regions for shale-oil production. "The shale industry in the U.S. acts as an accordion that will expand and contract relatively quickly," said David Zusman, chief investment officer at Talara Capital Management. "The leading indicators, including drilling permits, rig count and overall capital spending, are already pointing to a brighter 2016." However, analysts have cautioned that the rig count may not directly correlate with future output because producers are cutting less-productive rigs while focusing on their best assets. U.S. oil production remains near multidecade highs, and crude-oil supplies stood at their highest level in about 80 years in the week ended Jan. 30, according to the U.S. Energy Information Administration. "There doesn't seem to be any indication that U.S. production is faltering," said Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas SA. "A decline in the rig count does not necessarily mean a decline in production." Prices pared their gains later in the session as the dollar strengthened following better-than-expected U.S. employment data. A stronger dollar can weigh on oil prices by making the dollar-denominated commodity more expensive to buyers using foreign currencies. Late Thursday, Saudi Arabia increased its oil prices for U.S. buyers and reduced its prices for Asian buyers in what some interpreted as a signal that the kingdom will keep oil flowing to maintain market share at the expense of U.S. shale-oil producers. Saudi Arabia is the biggest producer in the Organization of the Petroleum Exporting Countries, which has declined to cut its output quota despite the rout in prices in a bid to defend its market position. The recent volatility in oil prices left some market observers baffled about where crude is headed. "The message is that the ground is very slippery underfoot," said David Hufton of London oil brokerage PVM. "Next week, we could find Brent challenging support at $50 a barrel or resistance at $60." Meanwhile, gasoline futures rose 3.43 cents, or 2.2%, Friday to $1.5591 a gallon. They gained 5.4% for the week. Diesel futures gained 3.32 cents, or 1.8%, to $1.8391 a gallon. Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum industry; Capital expenditures; Market positioning; Petroleum production
Location: United States--US
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651706942
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651706942?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Petrobras Names Banco do Brasil Chief New CEO; State-Controlled Oil Company Also Names Bank's Finance Chief as Its New CFO
Author: Jelmayer, Rogerio; Magalhaes, Luciana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--Aldemir Bendine, currently chief executive of Brazilian bank Banco do Brasil, will replace Maria das Graças Silva Foster as CEO of Petroleo Brasileiro SA, the state-controlled oil company said Friday. Ms. Foster resigned earlier this week, along with five senior executives amid a widespread corruption scandal. She will also leave the company's board, Petrobras said in a note to the market regulator. Neither Ms. Foster nor the other five executives have been implicated in the scandal. Investors reacted negatively to earlier news reports that Mr. Bendine would be the next CEO of the company, sending Petrobras shares down as much as 7.8% in recent trading in São Paulo. Mr. Bendine is perceived as too close to the government, and investors were looking for someone more independent, according to analysts. "Even though he's well respected at Banco do Brasil, I think he stands out more as being a name close to [President] Dilma Rousseff than a name the market would like to see," said João Augusto de Castro Neves, a political analyst at Eurasia Group, before the company confirmed Mr. Bendine will be the new CEO. "He'll have a lot of work ahead of him to gain credibility from the market. It's not a given." Banco do Brasil's chief financial officer, Ivan Monteiro, was appointed as Petrobras' new CFO, Petrobras said. Mr. Bendine, 51 years old, is a career employee of Banco do Brasil with more than 30 years of experience. He assumed the institution's top post in 2009. Under his watch, the bank saw a massive expansion of credit and posted fat net profits, while keeping its default rate under control. He takes the helm of a company in deep crisis. Petrobras is the most indebted oil major in the world, and is mired in a vast corruption scandal. Brazilian prosecutors allege that several former executives colluded with construction firms to drive up the price of Petrobras contracts and profit from the markup. Two former Petrobras executives have been charged with money laundering and corruption. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@dowjones.com Credit: By Rogerio Jelmayer and Luciana Magalhaes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651750487
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651750487?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Gulf Keystone Shares Fall After Export Suspension; Move by Kurdistan-Focused Oil Company Follows Nonpayment by Local Government
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
Mr. Gerstenlauer said in the statement that the company's board is evaluating some longer-term financing options and "taking a prudent approach" to its capital expenditure in 2015.
Full text: LONDON--Shares in Gulf Keystone Petroleum Ltd. fell more than 17% after the Kurdistan-focused oil company said it had suspended its crude-oil exports by truck following nonpayment by the local government. The Kurdistan Regional Government, or KRG, has never disputed that money is owed to Gulf Keystone and other oil producers in the region, including Genel Energy PLC and Norway's DNO ASA, and has promised to make payments for the oil exported. But the system has been plagued by delays and so far, the cash-strapped KRG has only made one payment to the companies for exported oil. The delays are particularly weighing on Gulf Keystone, which has $575 million in debt amid a squeeze on its revenues following the collapse in oil prices. Gulf Keystone declined on Friday to give a current figure for how much money the company was owed. In a November interview, Gulf Keystone's Chief Executive John Gerstenlauer estimated the amount owed then was around $100 million. Gulf Keystone said in a statement on Friday that it is talking to the KRG about the outstanding payments and to establish a stable payment cycle for exports in the future. In the meantime, the company is restarting domestic sales of its crude so it can receive revenues in the near term. Mr. Gerstenlauer said in the statement that the company's board is evaluating some longer-term financing options and "taking a prudent approach" to its capital expenditure in 2015. Edison Investment Research analyst Will Forbes said that while Gulf Keystone has the ability to freeze capex until the payments and financing are resolved, the situation could become more urgent toward the end of the year as investment will be needed for the development of the Akri-Bijeel field, which is also in Kurdistan. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry
Location: Norway Kurdistan
Company / organization: Name: Gulf Keystone Petroleum Ltd; NAICS: 211111; Name: DNO ASA; NAICS: 211111; Name: Genel Energy PLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651890804
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651890804?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Canada Expects Housing Activity to Moderate Over Next Two Years; Canada Mortgage and Housing Corp. Warns Lower Oil Prices Pose Risk in Energy-Rich Provinces
Author: Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
CMHC is forecasting a "gradual moderation in the pace of new-home construction over the next couple of years," Chief Economist Bob Dugan said, noting that employment, disposable income and migration will support the market.
Full text: Canada's national housing agency says it is expecting housing activity to moderate over the next two years but warned that lower oil prices pose an increased risk for such energy-rich provinces as Alberta. Canada Mortgage and Housing Corp., which is also the country's dominant mortgage insurer, projects housing starts in 2015 should be similar to last year, but is calling for a slight slowdown by 2016. CMHC is forecasting a "gradual moderation in the pace of new-home construction over the next couple of years," Chief Economist Bob Dugan said, noting that employment, disposable income and migration will support the market. Still, he cautioned that downside risks have increased due to the recent oil-price slump. "When you think about the severity of an oil-price shock, it's not just how far they fall but how long they stay low that matters," Mr. Dugan said in an interview on Friday. Lower oil prices will hurt such oil-producing provinces as Alberta, Saskatchewan, and Newfoundland and Labrador, he said, adding that lower exchange rates and interest rates will only partially compensate. CMHC released its two-year projections as part of its first-quarter housing market outlook. CMHC is forecasting a 1% year-over-year decline in housing starts in 2015. On an annual basis, it expects housing starts to range between 154,000 and 201,000 units this year, and 148,000 units to 203,000 units next year. Sales of existing homes, meanwhile, should coast at levels similar to last year--ranging between 425,000 and 504,000 units--while average prices are expected to manage a 1.5% gain, CMHC said. In 2016, housing resales are expected to come in between 410,000 and 505,000 units, the agency said. As for average prices, CMHC expects a range between 384,000 Canadian dollars (around $309,000) and C$428,000 in 2015, rising slightly in 2016. Still, the government-owned housing agency appeared cautious about the housing outlook for Alberta. It said housing starts should slow in that province this year as oil prices weigh on the economy. Specifically, CMHC expects housing starts in Alberta to slump 11.6% this year to 36,000, followed by a further decline to 34,500 in 2016. The agency's forecast is based on oil prices returning to an average of $60 a barrel for West Texas Intermediate in 2015. Crude prices have tumbled by more than half since the middle of last year, falling to less than $50 a barrel in January. WTI crude was trading around $52 on Friday. "The oil-price scenario could be different this time," added Mr. Dugan. "Oil is very hard to forecast, as you can probably imagine." Should the oil-price rout deepen, which played out in the last economic downturn in 2008 and 2009, CMHC has calculated a worst-case scenario for Alberta based on oil prices falling to around $35 a barrel. Under such an extreme situation, it said housing starts in the oil-rich province could fall to 20,300 units in 2016, or about half the level reached in 2014. Write to Rita Trichur at rita.trichur@wsj.com Credit: By Rita Trichur
Subject: Petroleum industry; Statistical data; Housing starts; Crude oil prices
Location: Canada
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651893008
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651893008?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Mexico's Budget Cuts Prompted by Oil's Drop, Financing Outlook; Deputy Minister Says the Hope Is to Narrow Deficits in Future Without Raising Taxes
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Cuts to Mexico's 2015 budget are a step toward ensuring the government will be able to narrow its deficits in coming years without increasing taxes, and start lowering public debt-to-GDP levels beginning in 2017, Deputy Finance Minister Fernando Aportela said. The government last week unveiled spending cuts of some $8.3 billion this year as a preventive measure, given the sharp drop in oil prices and the likelihood that financing will become harder to obtain, particularly as the U.S. Federal Reserve is expected to begin raising interest rates. Mr. Aportela said in an interview Thursday that the oil price hedges taken out for 2015 were enough to cover the federal government's exposure to oil prices, but don't cover lower-than-expected crude output by state oil company Petróleos Mexicanos. Pemex, which will make half of this year's budget cuts, reported crude production of 2.25 million barrels a day in January, below the 2.4 million budget estimate. The main challenge for the government, which relies on oil money and related taxes for almost a third of revenue, will come in 2016 as oil prices are expected to remain low. "It was important to start now...as a preventive measure to strengthen macroeconomic conditions," Mr. Aportela said. Bank of America Merrill said that assuming Mexican crude averages $52 a barrel in 2016, the revenue shortfall next year could be around 1% of GDP. Mexico's oil price was $46.10 on Thursday. Mexico's fiscal deficit of 4% of GDP includes the federal government deficit, financed investment at state enterprises such as Pemex, and liabilities of development banks. The federal government still intends to lower its deficit to 1% of GDP this year from 1.1% in 2014, then cut it further to 0.5% in 2016 and zero in 2017, Mr. Aportela said. Pemex's financing needs, which have averaged around 2% of GDP in recent years, are likely to diminish as the state company can form joint ventures with private companies under new energy laws. Overall public sector debt rose in 2014 to 41% of GDP, up from 39% the year before, raising concerns among some analysts. This year's budget cuts and plans to review 2016 spending seek to stabilize the level this year and next, and start lowering it as of 2017, Mr. Aportela said. The government is conducting a public expenditure review with the World Bank to find ways to make its spending more efficient. The Finance Ministry is due to publish a preliminary outline of 2016 budget estimates at the end of March. This year's spending reductions "may be viewed as a pre-emptive measure, allowing for shallower cuts and a smoother transition in 2016," Barclays economist Marco Oviedo said in a note. A number of economists cut their economic growth estimates for this year as a result of the budget cuts, while noting that the impact is likely to be small. Eleven of the 25 analysts surveyed this week by Citi unit Banamex cut their GDP forecasts, reducing the average estimate to 3.2% from just under 3.4%. The government is projecting growth between 3.2% and 4.2%, up from an expected 2.2% for 2014. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651926450
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651926450?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Enbridge Seeks Pipeline Approval to Start Eastward Shipments of Western Canadian Oil; Move Has Been Delayed by Concerns About Pipeline Safety Measures
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]06 Feb 2015: n/a.
Abstract:
A company spokesman said the request was submitted to Canada's National Energy Board, which earlier in the day approved Enbridge's plan to meet two additional conditions for safe operation of its Line 9 pipeline that the chief energy regulator had imposed in October.
Full text: CALGARY, Alberta--Enbridge Inc. said it asked Canadian regulators Friday for permission to start up a pipeline by late June that would ship crude oil from Western Canada to refineries in Eastern Canada, a move that had been delayed by concerns over pipeline safety measures. A company spokesman said the request was submitted to Canada's National Energy Board, which earlier in the day approved Enbridge's plan to meet two additional conditions for safe operation of its Line 9 pipeline that the chief energy regulator had imposed in October. The request comes nearly a year after the NEB initially gave its blessing to reverse the flow of oil along one section of Enbridge's 550-mile pipeline. If granted, the company said it plans to begin crude oil shipments in the second quarter, which would be about six months after it had hoped to start up in November. A coalition of environmental and Native American groups have urged the federal government to reject the project. Energy industry executives and officials in oil-rich Alberta province have championed the pipeline as a way to provide Western Canadian crude with better access to Eastern markets. Line 9 is one of several pipeline projects designed to ease bottlenecks that have depressed prices of Western Canadian Select crude oil. The reversal has been eagerly awaited by Suncor Energy Inc., which plans to use Line 9 to ship oil sands crude from northern Alberta to a refinery it owns in Montreal. A section of the pipeline known as 9B currently carries oil westward from a terminal in eastern Montreal to a pumping station near Toronto. Once reversed, the $400 million project will allow up to 300,000 barrels a day to flow as far as 1,433 miles from Edmonton, Alberta, via a connection to Enbridge's Mainline pipe. Canadian regulators told Enbridge last fall that it couldn't move ahead with the Line 9 pipeline reversal until it had addressed concerns about shut-off valves, particularly where the pipeline traverses water bodies. To meet those conditions, Enbridge added 17 new valves for a total of 62 valves along the pipeline. Enbridge has said it plans to spend $300 million on the reversal and another $100 million to increase capacity from the current 240,000 barrels a day. In 2012, the NEB approved an earlier application to reverse a separate and shorter portion of the pipeline called 9A that runs between Sarnia, Ontario, to North Westover near Toronto. The 9B approval comes as the final phase of the Line 9 project. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Pipelines; Petroleum industry; Energy policy; Crude oil
Location: Montreal Quebec Canada
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 6, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1651961022
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1651961022?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Banker Takes Helm of Brazil's Troubled Oil Giant; Filling Top Post at Petrobras, Government Taps Head of Banco do Brasil
Author: Jelmayer, Rogerio; Magalhaes, Luciana
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]07 Feb 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--With state-controlled Petroleo Brasileiro SA reeling from a corruption scandal and the mass exit of top executives this past week, the government on Friday installed a familiar face atop Brazil's most important company. Career banker Aldemir Bendine was plucked from his chief executive post at government-owned Banco do Brasil and given the top job at Petrobras, as the oil giant is commonly known. Mr. Bendine succeeds Maria das Graças Silva Foster, who resigned as Petrobras CEO this week along with five other senior executives. None has been implicated in the scandal. But their abrupt departures set off a scramble by the government to insert new leadership at the company, which is the target of a widening investigation into a graft ring that allegedly skimmed billions from the firm through inflated contacts. Markets reacted negatively to Mr. Bendine's selection. Petrobras shares closed down 6.9% at 9.12 reais, or $3.31, in São Paulo on Friday, while Banco do Brasil fell 3.9% to 21.90 reais. The chief executive job at Petrobras is largely a political post; the country's president appoints most of the board members, who in turn approve the CEO. Still, some analysts had expressed hopes that President Dilma Rousseff might turn to an executive with deep private-sector experience or a proven record in crisis management to chart a new course for the troubled behemoth. "Bendine's appointment shows that Dilma will be the one at the helm of Petrobras," said Adriano Pires, an energy expert with the Brazilian Center of Infrastructure in Rio de Janeiro. "The market wanted change and autonomy. The message she sent was it is more of the same." Some independent board members expressed outrage. Mauro Rodrigues da Cunha, who represents minority shareholders, said he found out about the selection of Mr. Bendini from the press before his name was formally submitted. The government "once more, imposes its will over the interest of Petrobras, ignoring the appeal of long-term investors," he said in a written statement. Petrobras board member Silvio Sinedino, who represents the company's workers, said in a Facebook post that he voted against Mr. Bendine. "Political appointments...end up costing a high price in corruption and wrongdoing," he said. Ms. Rousseff's press office declined to comment. Petrobras didn't disclose the results of the board vote, though local press reported the tally as 7-3 in favor of Mr. Bendine. Mr. Bendine wasn't the only Banco do Brasil executive to be tapped to serve at Petrobras. Chief Financial Officer Ivan Monteiro was appointed the oil company's new finance chief, Petrobras said Friday. Petrobras also named interim directors for the positions left open earlier this week in the areas of exploration and production, supply, gas and energy and engineering, technology and materials. Mr. Bendine, 51 years old, is a career employee of Banco do Brasil with more than 30 years of experience. He assumed the institution's top post in 2009. Under his watch, the bank posted rich profits, while keeping its default rate under control. Shoring up Petrobras will surely test his skills. The most-indebted oil major in the world, the company has been rocked by one of the worst corruption scandals in Brazil's history. Authorities allege that some of the nation's largest construction companies paid bribes to secure $23 billion in contracts with Petrobras in recent years. Prosecutors say the firms colluded to drive up prices for the work, kicking back a portion to high-ranking Petrobras employees and politicians, including members of Ms. Rousseff's ruling Workers' Party. Since the scandal exploded in March, prosecutors have charged 39 people for alleged corruption, money-laundering and organized crime. They include two top Petrobras officials and 27 executives from the nation's biggest builders. Petrobras says it is a victim of the alleged scam and that it is cooperating with authorities. Ms. Rousseff hasn't been implicated and Workers' Party officials have repeatedly denied involvement. Some of the companies and attorneys of people caught up on the scandal have denied wrongdoing; others have said only that they are cooperating with investigators. The scandal has tarnished Petrobras's reputation and sent its shares plummeting; the company, which in 2013 had 305 billion reais in revenue, has lost nearly 70% of its market value since early September. The troubles are weighing on Brazil's economy and threatening to engulf the Rousseff administration. Brazil's Congress this week opened a special probe into the scandal. Despite her rocky tenure, Ms. Foster was widely respected in the oil industry for her technical expertise, and oil production grew under her watch. "You took out a technical name that was Graca Foster, who despite the problems, knew the [oil] sector, and put in a person who, despite the good results of the Banco do Brasil, is not an expert in the oil sector, " said Joao Pedro Brugger, a portfolio manager at Leme Investments in Florianopolis. Mr. Bendine's tenure at Banco do Brasil wasn't without controversy. In 2012, Mr. Bendine paid a 122,000 reais fine (about $44,000) to Brazilian tax authorities for failing to declare a gain of 280,000 reais on his tax return, according to a person familiar with the matter. Following the payment of the fine, Brazil's tax authority didn't open an investigation into Mr. Bendine, the person said. A Banco do Brasil spokesperson said at the time that after the payment of the fine, the situation was "normalized." Brazil's tax authority declined to comment. Local newspaper Folha de S. Paulo reported last year that Mr. Bendine and Banco do Brasil made special considerations in giving a 2.8 million reais loan to a company controlled by Brazilian businesswoman and TV personality Valdirene Aparecida Marchiori. At the time, Mr. Bendine and Ms. Marchiori denied any wrongdoing. On Friday, a Banco do Brasil spokesman also denied the allegations. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@dowjones.com Credit: By Rogerio Jelmayer and Luciana Magalhaes
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 7, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652003305
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652003305?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Libya's Oil Sector Reels in Civil War
Author: Faucon, Benoit; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Feb 2015: B.1.
Abstract:
[...]order, Libyan oil output has fallen to about 325,000 barrels a day in January from nearly 900,000 barrels a day in October, largely because of oil fields being taken over by Libyan militias or shutdowns due to security concerns, according to officials at the state-owned National Oil Co. The plunge in production comes after civil war broke out mid-2014, leading to two big closures at the end of the year.
Full text: Corrections & Amplifications The surname of Geoff Porter, head of political risk firm North Africa Risk Consultancy, was incorrectly given as Port in a Business and Finance article Saturday about Libya's oil industry. (WSJ Feb. 9, 2015) The violence roiling Libya has increasingly targeted oil companies and their assets, upending long-term investments by Western companies and driving down production in a country that helped trigger the world-wide rout in oil prices. In short order, Libyan oil output has fallen to about 325,000 barrels a day in January from nearly 900,000 barrels a day in October, largely because of oil fields being taken over by Libyan militias or shutdowns due to security concerns, according to officials at the state-owned National Oil Co. The plunge in production comes after civil war broke out mid-2014, leading to two big closures at the end of the year. French major Total SA closed the Mabruk oil field in central Libya, a facility that once produced 30,000 to 40,000 barrels a day. And the country's main oil port, known as Sidra, was closed because of fighting, damping prospects for three U.S. companies that have a stake in fields connected to the port -- ConocoPhillips, Marathon Oil Corp. and Hess Corp. Both sites were in the cross hairs of gunmen on Tuesday. There was fighting in the vicinity of Sidra, while at Mabruk at least nine guards were killed in an attack, said Mashallah al-Zawie, a top Libyan oil official. Libya has been mired in violence and political divisions since longtime dictator Moammar Gadhafi was killed in an uprising in 2011. A civil war has broken out between the internationally recognized government based in the country's east and a rebel faction known as Libya Dawn that controls the country's capital of Tripoli. Crude has long been the lifeblood of the country, home to Africa's largest oil reserves. Born in the 1950s, Libya's oil industry was producing more than three million barrels a day by the late 1960s. Just before the Gadhafi regime was toppled in 2011, the country was exporting 1.3 million barrels a day from a production of 1.6 million barrels a day. "There was an implicit agreement between the different factions to avoid disrupting oil production," said Richard Mallinson, an analyst at London-based consultancy Energy Aspects. "Now the parties have realized that controlling oil means power." The instability has affected other Western energy companies in the country. Late December, Wintershall Holding GmbH shut down its Libyan production because of the fighting at Sidra, which is close to the Ras Lanuf and Zueitina terminals it uses. The German company says it has invested more than $2 billion in Libya for a daily production capacity of 90,000 barrels. Austria's OMV AG said its North African business also was being hurt by the unrest. The company is a partner in oil fields in central and southern Libya where it says it produced an average of 8,000 barrels a day last year. "The outlook in 2015 is even tougher," OMV Chief Executive Gerhard Roiss said recently, citing both lower oil prices and the Libyan crisis at a briefing for the company's quarterly update. "In Libya, this situation is not changing; it's deteriorating." Earlier in 2014, the situation wasn't so dire. Despite fighting raging in Tripoli last summer, Libya surprised the world with a sudden burst of new oil. By October, the country was pumping 887,000 barrels a day, up from 232,000 in June, according to the Organization of the Petroleum Exporting Countries, of which Libya is a member. Global prices for crude have tumbled as investors realized that a glut of oil was hitting the market despite volatility in places such as Libya. In six months, the price of Brent crude plunged to less than $50 a barrel in January, from a high of $115 a barrel in June. Lately, the market has reacted little to the renewed fighting in Libya and the cutback in supplies there. Analysts say OPEC's decision in November not to cut production virtually guaranteed an oversupply whether Libya produces or not. "Libya became irrelevant," said Tamas Varga, oil analyst at brokerage PVM in London. The combination of falling prices and the threat of violence has chilled oil-company activity in Libya. At the Sidra oil terminal, ConocoPhillips, Marathon Oil and Hess were part of a rush to return to Libya after economic sanctions were lifted against the Gadhafi regime in 2003, supplying a port that recently was exporting 300,000 barrels a day. But around the new year, seven storage tanks at the port were burned, including two that completely collapsed, and no exports have restarted, according to Libyan oil officials. ConocoPhillips said last week that its production levels in Libya last year fell to 8,000 barrels a day of oil equivalent on average, compared with 30,000 barrels a day in 2013. ConocoPhillips and Hess didn't respond to requests for comment. Marathon declined to comment. The fighting hasn't affected Libya's offshore production, which for now is out of reach of the belligerents. Two offshore fields operated by Italy's Eni SpA and Total joint ventures amount to about 100,000 barrels a day. Other oil output largely comes from desert fields in far-out areas of western and eastern Libya that have been spared by the civil war. But in general the fighting has dealt Libya's oil sector a heavy blow, officials and experts say. Even if there is peace, said Geoff Port, head of political risk firm North Africa Risk Consultancy, "you won't see an immediate return of previous production levels." Credit: By Benoit Faucon and Georgi Kantchev
Subject: Production capacity; Political risk; Shutdowns; Petroleum production; Petroleum industry; Civil war -- Libya
Location: Libya
Company / organization: Name: Total SA; NAICS: 447190, 324110, 211111; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112; Name: Hess Corp; NAICS: 447110, 324110, 211111
Classification: 9177: Africa; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Feb 7, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652144726
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652144726?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Increases 7.2% For Week on Signs Of Production Cuts
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]07 Feb 2015: B.5.
Abstract:
Prices spiked briefly at midday after oil-field-services company Baker Hughes Inc.'s data showed the number of rigs drilling for oil in the U.S. fell by 83 in the latest week, the ninth weekly loss in a row, to the lowest level since December 2011.
Full text: Oil prices posted their largest weekly percentage gain in almost four years as traders looked past the current world-wide glut of crude to focus on signals of future production cuts. Some market participants said oil prices, which have fallen 52% in the past seven months, could be bottoming out as producers have reacted to the low prices by cutting expenditures and reducing drilling activity. But many analysts caution that the global oil market still is oversupplied and there are few signs of a major uptick in demand, so prices could slip yet again. The market was volatile this past week, posting a one-month high Tuesday before falling Wednesday and then regaining those losses by week's end. U.S. oil for March delivery settled up $1.21, or 2.4%, Friday at $51.69 a barrel on the New York Mercantile Exchange. Prices gained 7.2% for the week, the largest weekly percentage gain since late February 2011. Brent, the global benchmark, rose $1.23, or 2.2%, to $57.80 a barrel on ICE Futures Europe. Prices rose 9.1% for the week. Prices spiked briefly at midday after oil-field-services company Baker Hughes Inc.'s data showed the number of rigs drilling for oil in the U.S. fell by 83 in the latest week, the ninth weekly loss in a row, to the lowest level since December 2011. The continued drop in the rig count indicates that producers are pulling back on oil exploration and new drilling. This past week's data showed a large drop in horizontal rigs, which are used in shale-oil drilling. In addition, the largest drop in oil rigs was in the Permian Basin, one of the three key regions for shale-oil production. "The shale industry in the U.S. acts as an accordion that will expand and contract relatively quickly," said David Zusman, chief investment officer at Talara Capital Management. "The leading indicators, including drilling permits, rig count and overall capital spending, are already pointing to a brighter 2016." However, analysts have cautioned that the rig count may not directly correlate with future output because producers are cutting less-productive rigs while focusing on their best assets. U.S. oil production remains near multidecade highs, and crude-oil supplies stood at their highest level in about 80 years in the week ended Jan. 30, according to the U.S. Energy Information Administration. "There doesn't seem to be any indication that U.S. production is faltering," said Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas SA. "A decline in the rig count does not necessarily mean a decline in production." Prices pared their gains later in the session as the dollar strengthened following better-than-expected U.S. employment data. A stronger dollar can weigh on oil prices by making the dollar-denominated commodity more expensive to buyers using foreign currencies. Late Thursday, Saudi Arabia increased its oil prices for U.S. buyers and reduced its prices for Asian buyers in what some interpreted as a signal that the kingdom will keep oil flowing to maintain market share at the expense of U.S. shale-oil producers. Saudi Arabia is the biggest producer in the Organization of the Petroleum Exporting Countries, which has declined to cut its output quota despite the rout in prices in a bid to defend its market position. Meanwhile, gasoline futures rose 3.43 cents, or 2.2%, Friday to $1.5591 a gallon. They gained 5.4% for the week. Credit: By Nicole Friedman and Georgi Kantchev
Subject: Crude oil; Commodity prices
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Feb 7, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652144729
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652144729?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
New Mideast Oil Refineries Could Stir Up Fuel-Market Dynamics; 'It's Going to Be Battleground Europe' for Diesel Exports
Author: Yep, Eric; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Feb 2015: n/a.
Abstract:
Refineries in Australia have already been forced to close in recent years because of overcapacity and competition in the region, including refineries operated by Royal Dutch Shell PLC, BP PLC and Caltex Australia Ltd. Japanese refiners have eliminated roughly one million barrels a day of capacity and the government plans to impose another round of cuts soon.
Full text: SINGAPORE--The startup of two huge oil refineries earlier this year in the Middle East is set to shake up fuel markets from Asia to Europe as the oil-producing region expands its influence beyond just exporting vast amounts of unprocessed crude. The projects, together with a third large refinery that began operating in Saudi Arabia last year, are expected to process 1.2 million barrels of oil a day at full capacity in the next few months, equivalent to slightly more than 1% of the world's total oil-refining capacity. They will produce a variety of oil products from diesel fuel to gasoline and jet fuel, with diesel making up for more than half the output. Once up and running, the refineries should have considerable competitive advantages, thanks to new technology, cheap crude-oil feedstock and proximity to markets in Europe and Africa, where they could displace traditional suppliers from Asia and the U.S. "It's going to be battleground Europe as far as diesel exports are concerned," said Johannes Benigni, founder of energy consulting firm JBC Energy. The firm expects diesel-fuel exports from the Middle East to Europe to increase to 173,000 barrels a day by 2018, nearly eight times the level in 2012. Over the same period, exports of refined diesel products from Asia to Europe could drop by one-fourth to 96,000 barrels a day. The refineries started in the past few weeks include a joint venture between state-run Saudi Arabian Oil Co., or Saudi Aramco, and China's Sinopec, called the Yanbu Aramco Sinopec Refining. Ltd. Abu Dhabi National Oil Co., meanwhile, has started operations at an expanded wing of the Ruwais refinery in the United Arab Emirates. The Yanbu Aramco refinery said last month it had exported its first shipment of 300,000 barrels of diesel on Jan 15. A second cargo has been scheduled to be loaded in February. Both shipments were bound for Europe, Singapore-based traders said. Last year, Saudi Aramco started output at one of the largest oil refineries built in recent years--a 400,000-barrel-a-day project in a joint venture with Total SA. Planning for the Saudi refineries began around a decade ago to meet growing domestic fuel demand as well as to provide jobs. Domestic demand hasn't grown as fast as expected, but as prices for Saudi Arabia's unprocessed oil have slumped--crude prices have more than halved internationally since last summer--the refineries could offer a profitable alternative source of income. The Middle East could have surplus diesel and jet fuel available for export amounting to one million barrels a day by 2019, the International Energy Agency forecasts, up form a surplus of 350,000 barrels in 2013. Globally, most regions are producing more refined products than they can consume, except in Europe where the refining sector is in decline. The new competition from the Middle East will likely hit refiners in the Asia-Pacific region hard, forcing them to compete more within local Asian markets, where demand growth has been slowing. Refineries in Australia have already been forced to close in recent years because of overcapacity and competition in the region, including refineries operated by Royal Dutch Shell PLC, BP PLC and Caltex Australia Ltd. Japanese refiners have eliminated roughly one million barrels a day of capacity and the government plans to impose another round of cuts soon. Last month, Malaysia's Shell Refining Co., a unit of Royal Dutch Shell, said it was exploring the sale or conversion of its Port Dickson refinery to a storage terminal because of depressed margins. Six months earlier, Shell wrote off $2.6 billion on its global downstream assets, including its largest oil refinery in Singapore. "More refiners may be on the chopping block and most at-risk refineries are owned by large, diversified players who are perfectly willing to offload underperforming assets," said Baey Yam Chuan, associate director at consultancy IHS Energy. The benchmark Singapore refining margin is around $6 a barrel, down from a high of more than $10 a barrel in 2013. It had dropped below $1.50 in mid-2014, its lowest in at least three years but is now getting some temporary support from low oil prices. Asia's refiners had already been challenged by resurgentexports from the U.S., where refineries have benefited from the country's shale-oil boom. Along with Russia, the U.S. is now one of the top exporters of refined products to Europe, and has been exporting more to South America, too. The new Mideast refining giants could undercut U.S. exporters even to South America if they offer sufficient discounts, analysts say. Already, Middle East refiners have begun eating into the jet-fuel market, an area in which U.S. refiners had been expected to grow quickly. At the start of 2014, traders had expected U.S. exports of jet fuel into Europe to be strong, said Barclays analyst Miswin Mahesh. But Kuwaiti and Saudi jet fuel has been more competitively priced. "You can easily see that, even in terms of pricing, Saudi Arabia might be better than the U.S." Mr. Mahesh said. "Kuwait and Saudi Arabia are now the sultans of the kerosene market." Mari Iwata in Tokyo contributed to this article. Write to Eric Yep at eric.yep@wsj.com and Summer Said at summer.said@wsj.com Credit: By Eric Yep And Summer Said
Subject: Petroleum refineries; Petroleum industry; Chemical industry; Exports; Diesel fuels; Joint ventures
Location: United States--US Asia Europe Middle East Saudi Arabia
Company / organization: Name: Abu Dhabi National Oil Co; NAICS: 211111; Name: Saudi Arabian Oil Co; NAICS: 211111; Name: International Energy Agency; NAICS: 928120; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652277265
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652277265?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil's Rebound Lifts U.S. Stocks, but More Obstacles Lurk; Worries About Earnings, Interest Rates Are Likely to Keep Market Volatility High
Author: Browning, E S
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]08 Feb 2015: n/a.
Abstract:
The Fed ended its bond-buying program last year and is preparing to push interest rates higher this year, so stocks could stay jumpy, said Seth Masters, chief investment officer at Bernstein Private Wealth Management, which oversees $76 billion in New York. [...]a 59% drop since June rattled investors worried about earnings for drillers and oil-services companies and the prospects for economic growth outside the U.S. Oil-price moves have arguably been the biggest influence on stock indexes in 2015.
Full text: U.S. stocks recovered last week amid hopes that the fall in oil prices might finally be over. The market has been closely tied to oil since 2015 began, so more-stable oil prices would help ease investor concerns. Money managers warned, however, that plenty of other hurdles lurk that could trip up already high-priced stocks in weeks to come, including concerns about corporate earnings and interest rates. As if that weren't enough, nothing guarantees that oil prices will keep rising, adding another element of uncertainty. In recent years, Federal Reserve cash injections into financial markets have helped cushion the blows from these normal market forces, but the Fed is removing that protection. The Fed ended its bond-buying program last year and is preparing to push interest rates higher this year, so stocks could stay jumpy, said Seth Masters, chief investment officer at Bernstein Private Wealth Management, which oversees $76 billion in New York. "We expect volatility to continue to be a bit higher going forward," Mr. Masters said. This kind of market uncertainty and volatility were "more normal before the Fed suppressed risks in recent years." Over the long run, big stock indexes finish up or down more than 1% on one-third of all trading days. Last year, it happened on just 14%, and on fewer than 10% in 2013. Recent market swings are a sign that things are getting back to normal. The big immediate issue is oil. Lower crude prices are good for consumers and energy-reliant companies like airlines. But a 59% drop since June rattled investors worried about earnings for drillers and oil-services companies and the prospects for economic growth outside the U.S. Oil-price moves have arguably been the biggest influence on stock indexes in 2015. The Dow Jones Industrial Average and the S&P 500 have both moved in the same direction as oil on 64% of trading days this year, compared with 46% in the previous two months. Stocks also were closely linked to oil at the start of last year, another time when global-growth fears were paramount. Oil moved the same way as the Dow and the S&P 500 index 69% of the time in January and the first five trading days of February 2014, compared with 46% in the two months before that. Whether stocks now can shake off oil worries and keep rising depends a lot on whether oil prices truly have stabilized. Oil futures now have rebounded 16% since Jan. 28. The oil news helped push the Dow up 3.84% last week to 17824.29, leaving it just 1.3% from a record. The S&P is 1.7% from its record. As the week ended, money managers were turning their attention to the suddenly upbeat economic news. On Friday, the U.S. Labor Department reported strong January job creation, rising wages and more job-seekers re-entering the workforce. That should help consumer spending and consumer-related stocks. The Dow didn't rise on that news; it slipped 0.3% Friday. That was partly because the strong job-creation rekindled fears of a Fed rate increase, and also because major indexes were nearing records. Short-term traders often take profits when stocks approach a record. One person who expects a strong U.S. economy and stabilizing oil prices is William Hackney, senior partner at Atlanta Capital Management LLC, which oversees $18 billion. He figures oil could return to at least $65 a barrel by year-end. That is roughly the break-even price for many U.S. shale producers. When they stop making money they cut output, which pushes prices back up. Oil futures finished Friday at $51.69 on the New York Mercantile Exchange. What worries Mr. Hackney is another of the issues that preoccupy money managers these days: corporate earnings. Analysts expect profit growth of just 3.4% at S&P 500 companies this year, down from 7.5% last year, according to FactSet. That is partly because of trouble at energy-related companies and partly because of soft global growth and the strong dollar. "You have an improving U.S. economy but you have all these problems in the rest of the world," Mr. Hackney said. "I don't think we are going to see as good a year as we had last year," when the S&P 500 rose 14% including dividends. "I'd be pleased if we were up 4% or 5% this year," including dividends, he said. David Rosenberg's solution is to look for European companies that do a lot of business with the U.S. Unlike the Fed, the European Central Bank is planning to inject more money into the continent's financial markets. That, together with the soft euro, should help European growth, exports and stock prices. "The global economy is not falling apart," said Mr. Rosenberg, chief economist and strategist at Gluskin Sheff + Associates Inc., which oversees about $6.5 billion in Toronto. "I want to buy companies and markets that are relatively undervalued and that tap into U.S. domestic demand, which you can find in Europe with a currency tailwind." U.S. stock prices are high. The S&P 500 traded Friday at 20 times its companies' net profits for the past 12 months, up from 17 one year ago and well above its historical average of 15.5, according to Birinyi Associates. Mr. Masters of Bernstein Private Wealth still has a normal U.S. stock allocation because he thinks U.S. companies, overall, can generate high profit margins. But with the Fed about to raise interest rates, he has reduced his investment in bonds and shifted that money abroad. He has hedged some of the currency risk because a falling euro would hurt the portfolio's value in dollars. Mr. Masters forecasts that U.S. stocks can rise 6% to 7% this year, including dividends, but he warns that such predictions can never be precise. Historically, he said, U.S. and foreign stock returns fluctuate widely. Forecasts can be off by 16 to 17 percentage points up or down, based simply on hard-to-predict short-term events like oil's sudden price swing. So if forecasts predict a 7% stock gain, in two-thirds of years the actual result could be anywhere from a 24% gain to a 10% decline, he said. "If you get the number right it is mostly luck," he said. Credit: By E.S. Browning
Subject: Investment advisors; Petroleum industry; Interest rates; American dollar; Stocks; Crude oil prices; Dow Jones averages
Location: United States--US
People: Masters, Seth
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 8, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652349893
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652349893?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Investing in Funds & ETFs: A Monthly Analysis --- News Challenge: The Month in Funds and Investing: Test Your Smarts on the Franc, Oil, Yahoo
Author: McCarthy, Erin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Feb 2015: R.5.
Abstract:
The cap was removed as markets anticipated the announcement of a bond-buying program by the European Central Bank designed to lower interest rates -- a program that was expected to significantly weaken the euro against the franc, making the cap harder to maintain. --- In January, commodities specialty funds, which are leveraged commodity products, were the worst-performing fund group, with a total return of negative 7.6%, according to the Lipper unit of Thomson Reuters Corp. Though there is a debate over whether the collapse in commodities is a sign of the next global recession, don't worry about the global economy too much just yet, wrote Osterweis Capital Management's chairman and chief investment officer, John Osterweis, and chief executive and portfolio manager, Matt Berler, in a recent research note.
Full text: Central banks dominated the financial markets' attention in January, with major policy changes from the European Central Bank and Swiss National Bank spurring volatility. Falling oil prices and a rising dollar also moved markets. How much do you know about last month's news in fund investing and the markets? Here's a quiz to test your knowledge. --- 1. Fill in the blank. In January, the Swiss National Bank abandoned its cap on the Swiss franc of ______ franc(s) per euro. A. 0.75 B. 1.20 C. 1.80 D. 2.20 ANSWER: B. The Swiss central bank had maintained an effective cap on the strength of the franc versus the euro for some 3 1/2 years. The sudden abandonment of the cap caught markets by surprise, triggering volatility in currencies and bonds. The franc soared against the euro; the Swiss currency ended January at 1.0396 francs per euro, about 15% stronger than its former limit of 1.20. The cap was removed as markets anticipated the announcement of a bond-buying program by the European Central Bank designed to lower interest rates -- a program that was expected to significantly weaken the euro against the franc, making the cap harder to maintain. --- 2. How did investors feel about U.S.-stock funds in January? A. They pulled out about $29 billion. B. They pulled out about $14 billion. C. They added about $9 billion. D. They added about $16 billion. ANSWER: A. U.S. stocks started off 2015 on a weak foot, with the S&P 500 index stumbling 3.1% and the Dow Jones Industrial Average slipping 3.7% in January. One major factor: a largely disappointing set of fourth-quarter and full-year earnings reports. However, stocks' underperformance was also tied to expectations of higher U.S. interest rates. "In the medium term, the U.S. is the only one of the big four -- Japan, China, U.S. and eurozone -- where monetary policy is expected to tighten significantly in 2015," said Cameron Brandt, director of research at fund tracker EPFR Global. --- 3. What was the lowest closing cost per barrel of Brent crude oil in January? A. $43.34 B. $44.28 C. $45.79 D. $46.59 ANSWER: D. The slump in commodity prices continued at the start of 2015, leading to sharply lower gasoline costs and providing a boon to drivers and many businesses. Commodities funds, however, have largely suffered. In January, commodities specialty funds, which are leveraged commodity products, were the worst-performing fund group, with a total return of negative 7.6%, according to the Lipper unit of Thomson Reuters Corp. Though there is a debate over whether the collapse in commodities is a sign of the next global recession, don't worry about the global economy too much just yet, wrote Osterweis Capital Management's chairman and chief investment officer, John Osterweis, and chief executive and portfolio manager, Matt Berler, in a recent research note. "Lower oil prices, low interest rates and stimulus-centered bank policies around the world can keep the global economy out of recession," they wrote. --- 4. The European Central Bank announced it will launch a bond-buying program later this year. How much in assets will it purchase each month? A. 15 billion euros B. 45 billion euros C. 60 billion euros D. 75 billion euros ANSWER: C. The European Central Bank finally answered the big question markets had persistently been asking: Would it embark on a bond-buying program to spur growth? ECB President Mario Draghi gave a resounding yes in late January, unveiling the bank's plan to buy 60 billion euros (about $68 billion) of government bonds and other assets each month. --- 5. What was the lowest yield on 10-year U.S. Treasurys in January? A. 1.679% B. 1.725% C. 1.767% D. 1.878% ANSWER: A. The U.S. 10-year's yield, which falls as the price rises, declined to 1.679% on Jan. 30, a 21-month low. Yields on U.S. government bonds were pushed lower last month by concerns about political turmoil in Greece and uncertainty about growth in the European and global economies. The downward move in interest rates has sparked renewed interest in mortgages and home refinancing. U.S.-bond funds also benefited, pulling in a net $26 billion for the month, according to EPFR. --- 6. What was the total return of real-estate funds in January? A. Negative 11% B. Negative 3.9% C. 2.6% D. 5.4% ANSWER: D. Real-estate funds were the third-best-performing fund group in January, according to Lipper, with a 5.4% average total return. Interest in these funds coincided with positive U.S. economic data and a drop in benchmark U.S. government bond yields. As interest rates drop, real-estate investment trusts, or REITs, look more attractive because of their strong yields, says Jeff Tjornehoj, head of Americas research at Lipper. --- 7. Fill in the blank. Yahoo Inc. said in January it will ______ its stake in Alibaba Group Holding Ltd. A. Sell B. Re-evaluate C. Spin off ANSWER: C. In late January, Yahoo said it would spin off tax-free its stake in the Chinese e-commerce giant, which was valued at nearly $40 billion at the time. That triggered a jump in the company's stock, though it still ended the month down about 13%. --- 8. How did the U.S. dollar perform in January, according to the WSJ Dollar Index? A. It weakened 3.3%. B. It weakened 1.6%. C. It strengthened 1.5%. D. It strengthened 3.5%. ANSWER D. The return of King Dollar has come amid expectations for an eventual rise in U.S. interest rates and flows into haven assets like U.S. Treasurys. It has been a problem for U.S. companies whose earnings were dented by currency weakness in foreign markets. Still, some analysts say dollar strength shouldn't drag on the U.S. economy too much. "We expect the U.S. economy to benefit far more from lower oil prices and other positives than it loses from a stronger dollar -- a view seemingly shared by the Fed," said an analysis from Capital Economics, an economic research firm. --- 9. How soon after proposing it did the Obama administration drop a plan to tax "529" college-savings accounts? A. One day later B. Three days later C. About 1 1/2 weeks later D. About three weeks later ANSWER C. The proposed change would have ended tax-free distributions from 529 accounts. The Obama administration asserted that these accounts benefit higher-income families more than others, and said the proposed move was aimed at offsetting costs for proposed tax changes to help lower-income and middle-class families. However, the 529 proposal quickly met opposition from Republicans and Democrats alike. --- Ms. McCarthy is a reporter for The Wall Street Journal in New York. Email her at erin.mccarthy@wsj.com. Credit: By Erin McCarthy
Subject: Central banks; Recessions; Monetary policy; Interest rates; Commodity prices; Energy economics; Economic conditions; Government bonds
Location: United States--US
Company / organization: Name: EPFR Global; NAICS: 519190; Name: European Central Bank; NAICS: 521110; Name: Swiss National Bank; NAICS: 521110
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: R.5
Publication year: 2015
Publication date: Feb 9, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652325119
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652325119?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Kurdistan Oil Earnings Prove Elusive --- Drilling Firms Haven't Been Fully Paid, Face Threat From Islamic State Militants
Author: Williams, Selina; Kent, Sarah
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Feb 2015: B.2.
Abstract:
Starting last year, oil began coursing through a new pipeline running from Iraqi Kurdistan to Turkey, seemingly the first payoff for a handful of companies with the opportunity to drill in one of the world's biggest untapped oil patches. The region was plunged into an economic crisis, even as the local government ramped up exports by truck and pipeline, leaving it unable to pay firms their share for international sales.
Full text: LONDON -- Starting last year, oil began coursing through a new pipeline running from Iraqi Kurdistan to Turkey, seemingly the first payoff for a handful of companies with the opportunity to drill in one of the world's biggest untapped oil patches. A year later, the firms still haven't been fully paid, highlighting the conundrum of Kurdistan's oil: Its reserves are among the cheapest to access, but they are a potential target of Islamic State militants and the subject of a paralyzing dispute in Iraq that is only now being resolved Firms that bet early on Kurdish oil and won rights there -- Genel Energy PLC and Gulf Keystone Petroleum Ltd. of London and Norway's DNO ASA, among others -- watched their share prices get pummeled as Iraq's central government and Kurdistan's regional leaders fought over the resource last year. On Friday, Gulf Keystone said it would temporarily halt oil exports from its giant Shaikan field, diverting the crude to the domestic market, where prices are lower but payment is more reliable. DNO and Genel are also planning to sell more oil locally. "In Iraq, the easy part is getting the oil out of the ground," said Ali Khedery, the chairman and CEO of consultancy Dragoman Partners and a former executive with ExxonMobil Corp. in Kurdistan. "The hard part is dealing with the politics." Kurdistan's oil riches are particularly hotly contested. Its efforts to exploit its oil resources infuriated Baghdad, which cut off payments to the region after it had agreed to export oil through a new pipeline to Turkey at the end of 2013. The region was plunged into an economic crisis, even as the local government ramped up exports by truck and pipeline, leaving it unable to pay firms their share for international sales. Genel is still owed about $230 million for oil exported via the pipeline, or almost half the revenue it expects for 2014. Gulf Keystone said in November it was owed $100 million, and HSBC estimated that DNO was also owed $100 million, though the company won't confirm that. To date, the firms have gotten just one $75 million payment between them at the end of 2014. On Jan. 29, a budget agreement in Baghdad cemented a fragile truce between the Iraqi central government and Kurdistan, paving the way for more than $400 million in payment. But Gulf Keystone and DNO's decision to halt exports, for now, dashed hopes regular payments would start soon. Gulf Keystone shares fell more than 17% on the news. Genel and DNO fell 2.4% and 7.4% respectively, on Friday, underperforming the sector. Henrik Madsen, a research analyst at Norwegian investment bank Arctic Securities AS, expects the firms to get just half the money they will be owed for oil exports this year. "It's going to probably be 2016 and maybe longer before you see stable and regular payments," he said. The Kurdistan Regional Government declined to comment. For the oil companies, Kurdistan's vast oil riches could make it worth the risk in the long term. Situated in northeastern Iraq, the Switzerland-sized region is estimated to hold 45 billion barrels of oil. That's roughly equivalent to the amount BP PLC, Royal Dutch Shell PLC, Exxon and others have extracted from the U.K.'s North Sea since the 1970s. Crucially, that oil is onshore and relatively straightforward to access, making it cheaper to develop than offshore fields elsewhere. It costs Genel about $2 a barrel to pump oil from its Kurdish fields, compared with about $26 a barrel for North Sea oil. But the political problems of producing in Kurdistan are joined by two other looming worries: oil trading at less than $60 a barrel and a surprise advance by Islamic State militants. One IS attack last summer was close enough that Gulf Keystone Chairman Simon Murray could see the smoke rising over the city of Mosul from his hotel room in Erbil. IS fighters didn't cross the Kurdistan borders and reach the oil fields, but many were shaken by the experience. "The oil fields are two hours from Erbil. They're vulnerable, there's no question about that," said Mr. Murray. Overall, the circumstances have rocked the firms' share prices. In the past 12 months, as of Friday's close, Genel and DNO share prices have fallen around 36% and 18% respectively. Gulf Keystone is down more than 67%, in part due to a board struggle, now resolved, over executive pay that led to the departure of the CEO in June. The companies remain outwardly optimistic, but the lack of clarity on payments leaves them in an uncomfortable position. Genel is well funded at the moment, thanks to a bond issue last year that raised $500 million, but it's slashing its capital-expenditure budget 30% for 2015. "It was a roller-coaster year, but we weathered the storm," said Genel CFO Julian Metherell, who is leaving the company in April. DNO reported a net loss of $252.5 million for the fourth quarter. "2014 was clearly a difficult year, and we're happy to have it behind us," DNO Executive Chairman Bijan Mossavar-Rahmani told investors this week. The company plans to cut back on spending this year amid lower prices and uncertainty over payments. It has "one foot on the accelerator and one on the brake," the executive said. Gulf Keystone is in a more difficult position with $575 million in debt. CEO John Gerstenlauer said Friday that the company's board is evaluating some longer-term financing options and "taking a prudent approach" to its capital expenditure in 2015. Credit: By Selina Williams and Sarah Kent
Subject: Iraq War-2003; Petroleum industry
Location: Kurdistan
Company / organization: Name: DNO ASA; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: Islamic State of Iraq & the Levant--ISIS; NAICS: 813940
Classification: 9178: Middle East; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.2
Publication year: 2015
Publication date: Feb 9, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652327300
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652327300?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Stocks Aren't Home Free Yet --- Signs of More-Stable Oil Prices Give Support to Stocks, but Obstacles Still Loom
Author: Browning, E S
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]09 Feb 2015: C.1.
Abstract:
The Fed ended its bond-buying program last year and is preparing to push interest rates higher this year, so stocks could stay jumpy, said Seth Masters, chief investment officer at Bernstein Private Wealth Management, which oversees $76 billion in New York. [...]a 59% drop since June rattled investors worried about earnings for drillers and oil-services companies and the prospects for economic growth outside the U.S. Oil-price moves have arguably been the biggest influence on stock indexes in 2015.
Full text: U.S. stocks recovered last week amid hopes that the fall in oil prices might finally be over. The market has been closely tied to oil since 2015 began, so more stable oil prices would help ease investor concerns. Money managers warned, however, that plenty of other hurdles lurk that could trip up already high-priced stocks in weeks to come, including concerns about corporate earnings and interest rates. As if that weren't enough, nothing guarantees that oil prices will keep rising, adding another element of uncertainty. In recent years, Federal Reserve cash injections into financial markets have helped cushion the blows from these normal market forces, but the Fed is removing that protection. The Fed ended its bond-buying program last year and is preparing to push interest rates higher this year, so stocks could stay jumpy, said Seth Masters, chief investment officer at Bernstein Private Wealth Management, which oversees $76 billion in New York. "We expect volatility to continue to be a bit higher going forward," Mr. Masters said. This kind of market uncertainty and volatility were "more normal before the Fed suppressed risks in recent years." Over the long run, big stock indexes close up or down more than 1% on one-third of all trading days. Last year, it happened on just 14%, and on fewer than 10% in 2013. Recent market swings are a sign that things are getting back to normal. The big immediate issue is oil. Lower crude prices are good for consumers and energy-reliant companies like airlines. But a 59% drop since June rattled investors worried about earnings for drillers and oil-services companies and the prospects for economic growth outside the U.S. Oil-price moves have arguably been the biggest influence on stock indexes in 2015. The Dow Jones Industrial Average and the S&P 500 have both moved in the same direction as oil on 64% of trading days this year, compared with 46% in the previous two months. Stocks also were closely linked to oil at the start of last year, another time when global-growth fears were paramount. Oil moved the same way as the Dow and the S&P 500 index 69% of the time in January and the first five trading days of February 2014, compared with 46% in the two months before that. Whether stocks now can shake off oil worries and keep rising depends a lot on whether oil prices truly have stabilized. Oil futures now have rebounded 16% since Jan. 28. The oil news helped push the Dow up 3.84% last week to 17824.29, leaving it just 1.3% from a record. The S&P is 1.7% from its record. As the week ended, money managers were turning their attention to the suddenly upbeat economic news. On Friday, the U.S. Labor Department reported strong January job creation, rising wages and more job seekers re-entering the workforce. That should help consumer spending and consumer-related stocks. The Dow didn't rise on that news; it slipped 0.3% Friday. That was partly because the strong job creation rekindled fears of a Fed rate increase, and because major indexes were nearing records. Short-term traders often take profits when stocks approach a record. One person who expects a strong U.S. economy and stabilizing oil prices is William Hackney, senior partner at Atlanta Capital Management LLC, which oversees $18 billion. He figures oil could return to at least $65 a barrel by year-end. That is roughly the break-even price for many U.S. shale producers. When they stop making money they cut output, which pushes prices back up. Oil futures finished Friday at $51.69 on the New York Mercantile Exchange. What worries Mr. Hackney is another of the issues that preoccupy money managers these days: corporate earnings. Analysts expect profit growth of just 3.4% at S&P 500 companies this year, down from 7.5% last year, according to FactSet. That is partly because of trouble at energy-related companies and partly because of soft global growth and the strong dollar. "You have an improving U.S. economy but you have all these problems in the rest of the world," Mr. Hackney said. "I don't think we are going to see as good a year as we had last year," when the S&P 500 rose 14% including dividends. "I'd be pleased if we were up 4% or 5% this year," including dividends, he said. U.S. stock prices are high. The S&P 500 traded Friday at 20 times its companies' net profits for the past 12 months, up from 17 one year ago and well above its historical average of 15.5, according to Birinyi Associates. Mr. Masters of Bernstein Private Wealth still has a normal U.S. stock allocation because he thinks U.S. companies, overall, can generate high profit margins. But with the Fed about to raise interest rates, he has reduced his investment in bonds and shifted that money abroad. He has hedged some of the currency risk because a falling euro would hurt the portfolio's value in dollars. Mr. Masters forecasts that U.S. stocks can rise 6% to 7% this year, including dividends, but he warns that such predictions can never be precise. Historically, he said, U.S. and foreign stock returns fluctuate widely. Forecasts can be off by 16 to 17 percentage points up or down, based simply on hard-to-predict short-term events like oil's sudden price swing. So if forecasts predict a 7% stock gain, in two-thirds of years the actual result could be anywhere from a 24% gain to a 10% decline, he said. "If you get the number right it is mostly luck," he said. Credit: By E.S. Browning
Subject: Abreast of the market (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 9, 2015
column: Abreast of the Market
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652327676
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652327676?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Earnings From Kurdistan Prove Elusive; Drilling Firms Aren't Fully Paid, Islamic State Militants Pose Threat
Author: Williams, Selina; Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a. [Duplicate]
Abstract:
LONDON--Starting last year, oil began coursing through a new pipeline running from Iraqi Kurdistan to Turkey, seemingly the first payoff for a handful of companies with the opportunity to drill in one of the world's biggest untapped oil patches. The region was plunged into an economic crisis, even as the local government ramped up exports by truck and pipeline, leaving it unable to pay firms their share for international sales.
Full text: LONDON--Starting last year, oil began coursing through a new pipeline running from Iraqi Kurdistan to Turkey, seemingly the first payoff for a handful of companies with the opportunity to drill in one of the world's biggest untapped oil patches. A year later, the firms still haven't been fully paid, highlighting the conundrum of Kurdistan's oil: Its reserves are among the cheapest to access, but they are a potential target of Islamic State militants and the subject of a paralyzing dispute in Iraq that is only now being resolved Firms that bet early on Kurdish oil and won rights there--Genel Energy PLC and Gulf Keystone Petroleum Ltd. of London and Norway's DNO ASA, among others--watched their share prices get pummeled as Iraq's central government and Kurdistan's regional leaders fought over the resource last year. On Friday, Gulf Keystone said it would temporarily halt oil exports from its giant Shaikan field, diverting the crude to the domestic market, where prices are lower but payment is more reliable. DNO and Genel are also planning to sell more oil locally. "In Iraq, the easy part is getting the oil out of the ground," said Ali Khedery, the chairman and CEO of consultancy Dragoman Partners and a former executive with ExxonMobil Corp. in Kurdistan. "The hard part is dealing with the politics." Kurdistan's oil riches are particularly hotly contested. Its efforts to exploit its oil resources infuriated Baghdad, which cut off payments to the region after it had agreed to export oil through a new pipeline to Turkey at the end of 2013. The region was plunged into an economic crisis, even as the local government ramped up exports by truck and pipeline, leaving it unable to pay firms their share for international sales. Genel is still owed about $230 million for oil exported via the pipeline, or almost half the revenue it expects to report for 2014. Gulf Keystone said in November it was owed $100 million, and HSBC estimated that DNO was also owed $100 million, though the company won't confirm that. To date, the firms have gotten just one $75 million payment between them at the end of 2014. On Jan. 29, a budget agreement in Baghdad cemented a fragile truce between the Iraqi central government and Kurdistan, paving the way for more than $400 million in payments owed to oil companies. But Gulf Keystone and DNO's decision to halt exports, for now, dashed hopes regular payments would start soon. Gulf Keystone shares fell more than 17% on the news. Genel and DNO fell 2.4% and 7.4% respectively, on Friday, underperforming the sector. Henrik Madsen, a research analyst at Norwegian investment bank Arctic Securities AS, expects the firms to get just half the money they will be owed for oil exports this year. "It's going to probably be 2016 and maybe longer before you see stable and regular payments received," he said. The Kurdistan Regional Government declined to comment. For the oil companies, Kurdistan's vast oil riches could make it worth the risk in the long term. Situated in northeastern Iraq, the Switzerland-sized region is estimated to hold 45 billion barrels of oil. That's roughly equivalent to the amount BP PLC, Royal Dutch Shell PLC, Exxon and others have extracted from the U.K.'s North Sea since the 1970s. Crucially, that oil is onshore and relatively straightforward to access, making it cheaper to develop than more technologically challenging offshore fields elsewhere. It costs Genel about $2 a barrel to pump oil from its Kurdish fields, compared with an average of about $26 a barrel for North Sea oil. But the political problems of producing in Kurdistan are joined by two other looming worries: oil trading at less than $60 a barrel and a surprise advance by Islamic State militants. One IS attack last summer was close enough that Gulf Keystone Chairman Simon Murray could see the smoke rising over the city of Mosul from his hotel room in Erbil. IS fighters didn't cross the Kurdistan borders and reach the oil fields, but many were shaken by the experience. "The oil fields are two hours from Erbil. They're vulnerable, there's no question about that," said Mr. Murray, referring to his company's fields. Overall, the circumstances have rocked the firms' share prices. In the past 12 months, as of Friday's close, Genel and DNO share prices have fallen around 36% and 18% respectively. Gulf Keystone is down more than 67%, as of Friday's close, in part due to a board struggle, now resolved, over executive pay that led to the departure of the CEO in June. The companies remain outwardly optimistic, but the lack of clarity on payments leaves them in an uncomfortable position. Genel is well funded at the moment, thanks to a bond issue last year that raised $500 million, but it's slashing its capital-expenditure budget 30% for 2015. "It was a roller-coaster year, but we weathered the storm," said Genel CFO Julian Metherell, who is leaving the company in April. DNO reported a net loss of $252.5 million for the fourth quarter. "2014 was clearly a difficult year, and we're happy to have it behind us," DNO Executive Chairman Bijan Mossavar-Rahmani told investors this week. The company plans to cut back on spending this year amid lower prices and uncertainty over payments. It has "one foot on the accelerator and one on the brake," the executive said. Gulf Keystone is in a more difficult position with $575 million in debt. CEO John Gerstenlauer said in a statement Friday that the company's board is evaluating some longer-term financing options and "taking a prudent approach" to its capital expenditure in 2015. Write to Selina Williams at selina.williams@wsj.com and Sarah Kent at sarah.kent@wsj.com Credit: By Selina Williams and Sarah Kent
Subject: Petroleum industry; Iraq War-2003
Location: Turkey
Company / organization: Name: DNO ASA; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652331548
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652331548?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
News Challenge; Test Your Smarts on the Franc, Oil, Yahoo; Our Monthly Funds and Investing Quiz
Author: McCarthy, Erin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract: None available.
Full text: Central banks dominated the financial markets' attention in January, with major policy changes from the European Central Bank and Swiss National Bank spurring volatility. Falling oil prices and a rising dollar also moved markets. How much do you know about last month's news in fund investing and the markets? Here's a quiz to test your knowledge. 1. Fill in the blank. In January, the Swiss National Bank abandoned its cap on the Swiss franc of ______ franc(s) per euro. A. 0.75 B. 1.20 C. 1.80 D. 2.20 ANSWER: B. The Swiss central bank had maintained an effective cap on the strength of the franc versus the euro for some 3½ years. The sudden abandonment of the cap caught markets by surprise, triggering volatility in currencies and bonds. The franc soared against the euro; the Swiss currency ended January at 1.0396 francs per euro, about 15% stronger than its former limit of 1.20. The cap was removed as markets anticipated the announcement of a bond-buying program by the European Central Bank designed to lower interest rates--a program that was expected to significantly weaken the euro against the franc, making the cap harder to maintain. 2. How did investors feel about U.S.-stock funds in January? A. They pulled out about $29 billion. B. They pulled out about $14 billion. C. They added about $9 billion. D. They added about $16 billion. ANSWER: A. U.S. stocks started off 2015 on a weak foot, with the S&P 500 index stumbling 3.1% and the Dow Jones Industrial Average slipping 3.7% in January. One major factor: a largely disappointing set of fourth-quarter and full-year earnings reports. However, stocks' underperformance was also tied to expectations of higher U.S. interest rates. "In the medium term, the U.S. is the only one of the big four--Japan, China, U.S. and eurozone--where monetary policy is expected to tighten significantly in 2015," said Cameron Brandt, director of research at fund tracker EPFR Global. 3. What was the lowest closing cost per barrel of Brent crude oil in January? A. $43.34 B. $44.28 C. $45.79 D. $46.59 ANSWER: D. The slump in commodity prices continued at the start of 2015, leading to sharply lower gasoline costs and providing a boon to drivers and many businesses. Commodities funds, however, have largely suffered. In January, commodities specialty funds, which are leveraged commodity products, were the worst-performing fund group, with a total return of negative 7.6%, according to the Lipper unit of Thomson Reuters Corp. Though there is a debate over whether the collapse in commodities is a sign of the next global recession, don't worry about the global economy too much just yet, wrote Osterweis Capital Management's chairman and chief investment officer, John Osterweis, and chief executive and portfolio manager, Matt Berler, in a recent research note. "Lower oil prices, low interest rates and stimulus-centered bank policies around the world can keep the global economy out of recession," they wrote. 4. The European Central Bank announced it will launch a bond-buying program later this year. How much in assets will it purchase each month? A. [euro]15 billion B. [euro]45 billion C. [euro]60 billion D. [euro]75 billion ANSWER: C. The European Central Bank finally answered the big question markets had persistently been asking: Would it embark on a bond-buying program to spur growth? ECB President Mario Draghi gave a resounding yes in late January, unveiling the bank's plan to buy [euro]60 billion (about $68 billion) of government bonds and other assets each month. Markets cheered, with European-stock funds drawing in a net $9.66 billion in January. 5. What was the lowest yield on 10-year U.S. Treasurys in January? A. 1.679% B. 1.725% C. 1.767% D. 1.878% ANSWER: A. The U.S. 10-year's yield, which falls as the price rises, declined to 1.679% on Jan. 30, a 21-month low. Yields on U.S. government bonds were pushed lower last month by concerns about political turmoil in Greece and uncertainty about growth in the European and global economies. The downward move in interest rates has sparked renewed interest in mortgages and home refinancing. U.S.-bond funds also benefited, pulling in a net $26 billion for the month, according to EPFR. 6. What was the total return of real-estate funds in January? A. Negative 11% B. Negative 3.9% C. 2.6% D. 5.4% ANSWER: D. Real-estate funds were the third-best-performing fund group in January, according to Lipper, with a 5.4% average total return. Interest in these funds coincided with positive U.S. economic data and a drop in benchmark U.S. government bond yields. As interest rates drop, real-estate investment trusts, or REITs, look more attractive because of their strong yields, says Jeff Tjornehoj, head of Americas research at Lipper. 7. Fill in the blank. Yahoo Inc. said in January it will ______ its stake in Alibaba Group Holding Ltd. A. Sell B. Re-evaluate C. Spin off ANSWER: C. In late January, Yahoo said it would spin off tax-free its stake in the Chinese e-commerce giant, which was valued at nearly $40 billion at the time. That triggered a jump in the company's stock, though it still ended the month down about 13%. 8. How did the U.S. dollar perform in January, according to the WSJ Dollar Index? A. It weakened 3.3%. B. It weakened 1.6%. C. It strengthened 1.5%. D. It strengthened 3.5%. ANSWER D. The return of King Dollar has come amid expectations for an eventual rise in U.S. interest rates and flows into haven assets like U.S. Treasurys. It has been a problem for U.S. companies whose earnings were dented by currency weakness in foreign markets. Still, some analysts say dollar strength shouldn't drag on the U.S. economy too much. "We expect the U.S. economy to benefit far more from lower oil prices and other positives than it loses from a stronger dollar--a view seemingly shared by the Fed," said an analysis from Capital Economics, an economic research firm. 9. How soon after proposing it did the Obama administration drop a plan to tax "529" college-savings accounts? A. One day later B. Three days later C. About 1½ weeks later D. About three weeks later ANSWER C. The proposed change would have ended tax-free distributions from 529 accounts. The Obama administration asserted that these accounts benefit higher-income families more than others, and said the proposed move was aimed at offsetting costs for proposed tax changes to help lower-income and middle-class families. However, the 529 proposal quickly met opposition from Republicans and Democrats alike. Ms. McCarthy is a reporter for The Wall Street Journal in New York. Email her at erin.mccarthy@wsj.com . Credit: By Erin McCarthy
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652331633
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652331633?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Rises on Optimism For Higher Demand, Lower Supply; Demand to Increase But Non-OPEC Supply to Contract in 2015
Author: Puko, Timothy; Erheriene, Ese
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract:
According to PVM, this provides an additional layer of demand, which helps keep prices higher.
Full text: Oil prices rallied for a third-straight session on signs of higher demand and lower supply, including more bullish forecasts from both the Organization of the Petroleum Exporting Countries and the U.S. government. OPEC's new monthly oil-market report said demand for its crude will rise this year as the U.S. produces less and consumes more. It estimates that demand will grow to 29.2 million barrels a day, 100,000 more than a year ago. That reverses a forecast for a 300,000 barrel-a-day decline in demand. It also reduced non-OPEC supply growth estimates by 420,000 barrels a day. U.S. producers have already cut the number of oil rigs in operation, which is also firing the rally, brokers and analysts said. Operators shut down another 83 last week last week. At 1,140, the number of rigs currently working is at its lowest level since December 2011, and down 29% since a record high as recently as October 2014. The U.S. Energy Information Administration said Monday that would help slow production growth in the main seven shale plays. In its new Drilling Productivity Report, the agency forecast month-over-month production growth in March 2015 would be slower in six of the seven regions compared with March 2014--with the Utica shale as the only exception. Light, sweet crude for March delivery, the U.S. benchmark, settled up $1.17, or 2.3%, at $52.86 a barrel on The New York Mercantile Exchange. That is the second highest price this year, putting U.S. oil up 19% from the low it set Jan. 28. The front-month March contract for Brent crude settled up 54 cents, or 0.9%, to $58.34 a barrel on London's ICE Futures exchange. It is the highest settlement since Dec. 26, putting the global benchmark up 25% since the low it set Jan. 13. Both U.S. and Brent prices have climbed in seven of the past eight sessions. Several analysts warned that neither the dwindling rig counts nor the OPEC forecast were clearly bullish for prices. But since futures dropped nearly 60% between June and late January, many traders have been looking for supply-and-demand signals to back up their sense that the steep fall has hit a bottom. "We're in that mode where the market is grasping at and running on anything bullish and discounting anything bearish," said Dominick Chirichella, analyst at the Energy Management Institute. Prices had dipped lower in overnight trading, with many analysts suggesting gains since late January can't hold. Both Barclays PLC and Citigroup Inc. sent out notes early Monday saying that rig cuts won't lead to production cuts, and prices will have room to fall back as storage fills up and their supplies go back on to the market. "The recent rally in crude prices looks more like a head-fake than a sustainable turning point," Citi analysts said. Demand in the second-largest consumer, China, is also down, limiting price gains, said Commerzbank. China imported 6.6 million barrels a day of crude oil, a decline of 8% month-on-month. The previous month had been a record for imports, but year-over-year oil imports were also down despite low prices, a surprise, the bank said. "If China were to buy less in future, this would increase the oversupply on the oil market and make it more difficult for oil prices to recover further," said Commerzbank. Benoît Faucon and Nicole Friedman contributed to this article. Credit: By Timothy Puko And Ese Erheriene
Subject: Petroleum industry; Supply & demand; Crude oil prices
Location: United States--US China Europe
Company / organization: Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652349906
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652349906?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OPEC Sees More Demand for Its Oil, Less U.S. Output; Report Points to Benefits From Strategy of Letting Prices Fall
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract: None available.
Full text: OPEC said on Monday that demand for its crude will rise this year as the U.S. produces less and consumes more, in a report that appeared to point to benefits from the cartel's strategy of letting oil prices slip to hurt rivals. In a monthly report on the market, the Organization of the Petroleum Exporting Countries reversed an earlier prediction that demand for its oil would decline by about 300,000 barrels a day. Now, the group says demand will be 29.2 million barrels a day, an increase of about 100,000 barrels a day compared with last year. The report is the latest marker in the high-stakes scramble over oil prices. The cost of oil has more than halved, to less than $60 a barrel, since it began plunging last summer. U.S. gasoline prices are at the lowest levels in a decade. In the past, OPEC has usually cut production to prop up prices when the market has plunged. But at a meeting in November, OPEC, led by Saudi Arabia, decided not to reduce output, a move seen as intended to inflict economic damage on producers of oil in the U.S., where production has been rising. Oil from newly tapped U.S. shale fields is more expensive to produce than crude in much of the rest of the world, so output is harder to sustain when prices are low. OPEC forecast that the U.S. oil supply will increase more slowly, by 130,000 barrels a day less than previously expected in 2015. That is because oil prices have forced a large number of drilling rigs to shut down , OPEC said. Already, growth in American production has slowed from 96,000 barrels a day in October to 14,000 barrels a day in November, though it has yet to translate into an actual production decline. In addition, lower oil prices have also forced international oil companies to cut their spending, while aging Russian fields will produce less than previously foreseen, the group said. Lower oil prices have also helped revive demand for oil among U.S. motorists. OPEC increased its forecast for North American oil consumption by 150,000 barrels a day, a shift that translates into an increase of 20,000 barrels per day in forecast demand growth world-wide. "Gasoline, in particular, remains a key driver behind the growth in U.S. oil demand, largely a result of lower oil prices," OPEC said. Overall, oil consumption is expected to increase by 1.17 million barrels a day to 92.32 million barrels a day. A Saudi oil ministry official said the picture seen by OPEC is similar to the views inside the kingdom. "There are strong indications that U.S. shale producers are taking a hit and by the second half of this year a lot of marginal barrels will disappear from the market will and demand will rise for OPEC members," he said. OPEC's new forecast doesn't necessarily mean oil prices will bounce back to their previous levels. Its own production remains nearly 1 million barrels a day above the amount markets need. In January, OPEC production stood at 30.15 million barrels a day, down 53,000 barrels a day from the December level, mostly due to disruptions in Libya. Brent, the global benchmark, and West Texas Intermediate crude were both trading up about 1% on Monday afternoon in London, continuing an upward trend over the past two weeks. Olivier Jakob, managing director of Swiss-based consultancy Petromatrix, said OPEC countries aren't out of the woods yet. Outside the Persian Gulf, members "need a much higher price to balance their budgets. They are in trouble," said Mr. Jakob, a longtime OPEC watcher. "The increase in [needed] volumes is not enough to make up for the lower prices." Write to Benoît Faucon at benoit.faucon@wsj.com Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652350192
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652350192?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Africa's Bond Bonanza Finds Fewer Takers; Once-Hot Borrowers Confront Fed Tightening, Soft Oil Prices
Author: Stevis, Matina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract:
Mahan Namin, manager of the Africa fixed-income fund at London-based frontier-market investment firm Insparo Asset Management, with $155 million under management, said "good issuers" like Ivory Coast, with an annual growth rate of over 8% and prudent fiscal housekeeping, shouldn't have any trouble raising money in the debt market.
Full text: NAIROBI--For the past two years, debt investors have been flocking to Africa, lured by the promise of high returns and the continent's enormous economic potential. But the benign climate that enabled nations that were once financial pariahs to raise billions of dollars is rapidly clouding over. The Federal Reserve's widely expected move to raise U.S. rates, a plunge in oil prices and a stronger dollar are starting to scare fund managers away from riskier markets at the frontiers of global capitalism. Overall, African governments raised a record $11 billion in foreign-currency bonds in 2013 and another $8 billion in 2014. In 2000, they raised only $1 billion. In 2013 and 2014, countries ranging from tiny Rwanda to the continent's largest economy Nigeria have borrowed billions to build infrastructure and fuel economic growth. Foreign investors went along for the ride, eager to pocket the higher returns promised by African bonds at a time interest rates in the West wallowed at historic lows. Rwanda, which depends on foreign aid for almost half of its state budget, raised $400 million in its first dollar-denominated bond in April 2013. Demand from investors was almost 10 times that. But the path is getting rockier. The Fed has signaled interest rates will rise sometime this year and analysts predict this will drive a repatriation of funds from so-called emerging and frontier markets, leading investors to sit out new debt issues. Meanwhile, low oil prices are hitting some of Africa's biggest economies, such as oil-dependent Angola, Ghana and Nigeria. And a stronger dollar means that those nations that have borrowed in dollars will find it harder to repay their loans. "The global environment is not supportive of frontier markets at this stage," said Kristin Lindow, senior vice president of the sovereign-risk group of credit-rating firm Moody's Investors Service. But with the timing of the first U.S. rate rise still uncertain, some investors are willing to stick with Africa for a bit longer. Kevin Daly, emerging-market portfolio manager at Aberdeen Asset Management, which has $550 billion under management with $1 billion in Africa, sees a window in the first half of 2015 for African bond issuance before U.S. rate increases kick in. He said the U.S. Federal Reserve rate increase will be "very measured and slow-paced, pushing it back toward the end of the year." There will "certainly be lower issuance" by African sovereigns in 2015, Mr. Daly said, and "investors will be a little more discerning on what they want to buy." Mahan Namin, manager of the Africa fixed-income fund at London-based frontier-market investment firm Insparo Asset Management, with $155 million under management, said "good issuers" like Ivory Coast, with an annual growth rate of over 8% and prudent fiscal housekeeping, shouldn't have any trouble raising money in the debt market. Mr. Namin's fund is invested in Kenyan, Ethiopian and Senegalese sovereign bonds. Still, he said he recently closed positions in oil-dependent African economies such as Angola. As long as African countries keep up high growth rates and control public finances, they will remain more attractive than their frontier-market peers such as Romania, Bolivia or Guatemala, said Mark Baker, investment director of emerging-markets fixed income at Standard Life Investments, which has $368 billion under management. Ivory Coast has said it would seek to raise about $1 billion in the next few months. Tanzania has signaled it plans to issue its first dollar-denominated bond, but is waiting to get its debt graded by a credit-ratings firm, a requirement to issue in international markets. Others, however, are turning to more familiar sources to finance growth and build a buffer against future problems. Last week, Kenya was granted a roughly $700 million loan from the International Monetary Fund, having graduated from a full IMF bailout program just in 2013. And Angola is discussing with the World Bank a roughly $500 million loan. The country has radically revised its 2015 budget, cutting oil-price assumptions underpinning its revenue plans to $40 a barrel from $81 previously. Kenyan officials and the IMF say Kenya's $700 million loan is only an insurance policy against shocks. One such shock could be a deterioration of the security situation in the country: A major attack by al Qaeda linked Somali militant group al-Shabaab on a Nairobi mall left more than 60 dead in September 2013 and triggered a spiral of terrorist violence in the country that has hit its tourism industry, once accounting for 14% of its economy. The country doesn't expect to spend the IMF facility, these officials say. Shocks aside, though, the Kenyan government may need to tap this loan to finance its megainfrastructure projects including a standard-gauge railway project, as well as its growing public wage bill. Write to Matina Stevis at matina.stevis@wsj.com Credit: By Matina Stevis
Subject: Bond issues; Interest rates; Asset management; Rating services; State budgets
Location: Africa Nigeria Angola Rwanda United States--US
Company / organization: Name: Moodys Investors Service Inc; NAICS: 522110, 523930, 561450; Name: Aberdeen Asset Management; NAICS: 523920
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652473413
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652473413?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Ohio Attorney General Files Motion to Join Suit Against Brazil's Petrobras; Lawsuit Claims Brazilian Oil Giant Violated Federal Securities Laws
Author: Connors, Will
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract:
RIO DE JANEIRO--The attorney general from Ohio said Monday that his office has filed a motion on behalf of Ohio pensioners to join a lawsuit against Brazilian state-run oil firm Petrobras, alleging that the oil company at the center of a vast corruption scandal violated U.S. federal securities laws.
Full text: RIO DE JANEIRO--The attorney general from Ohio said Monday that his office has filed a motion on behalf of Ohio pensioners to join a lawsuit against Brazilian state-run oil firm Petrobras, alleging that the oil company at the center of a vast corruption scandal violated U.S. federal securities laws. Petrobras is already facing more than a dozen class-action lawsuits in the U.S., including from the city of Providence, R.I., but the suit from Ohio's pension fund appears to be the most serious legal threat yet to the company. Ohio Attorney General Mike DeWine said in a statement that the motion has been filed on behalf of the Ohio Public Employee Retirement System, and that his office "has a responsibility to evaluate if companies and their executives are defrauding Ohio pensioners." Mr. DeWine said that Ohio pension funds have lost more than $50 million as a result of alleged fraud at Petrobras, and that public pension funds in Idaho and Hawaii were also joining the suit. The motion was filed in the U.S. District Court for the Southern District of New York. "The allegations against Petrobras are so egregious we have no choice but to take action on behalf of Ohio's public employees and retirees," Mr. DeWine said. Petrobras is in the midst of what many consider the worst corruption scandal in Brazil's history. Authorities allege that some of the nation's largest construction companies paid bribes to secure $23 billion in contracts with Petrobras in recent years. Prosecutors say the firms colluded to drive up prices for the work, kicking back a portion to high-ranking Petrobras employees and Brazilian politicians. So far, prosecutors have charged more than three-dozen people for alleged corruption, money-laundering and organized crime. They include two top Petrobras officials and 27 construction industry executives from the nation's biggest builders. Petrobras shares have fallen more than 58% in the last six months, wiping out tens of billions of dollars in shareholder value . Petrobras executives have struggled to assess the financial damage the alleged corruption has done to its bottom line. Last month the company failed to include an expected write down when it reported its third-quarter earnings. Last week, the company's chief executive and five directors resigned . Petrobras has said it is a victim of the alleged scam and that it is cooperating with authorities. A Petrobras spokeswoman didn't immediately respond Monday to a request for comment. As the corruption allegations surfaced and Petrobras shares collapsed last year, more than a dozen lawsuits were filed by U.S. investors who bought American depositary receipts sold by Petrobras in New York. In December, the city of Providence filed its own lawsuit against Petrobras , claiming the company's executives duped investors. The U.S. Department of Justice and U.S. Securities and Exchange Commission are also investigating Petrobras. "This is a fiduciary responsibility that we take very seriously, and it is consistent with past actions we have taken to encourage corporate governance reform and to seek compensation for unlawful behavior," said Karen Carraher, the executive director of the Ohio Public Employee Retirement System. "We intend to continue an aggressive posture to protect the integrity of the marketplace for all investors and citizens of Ohio." Write to Will Connors at william.connors@wsj.com Corrections & Amplifications An earlier version of this story said that Pennsylvania had joined other states' pension funds in filing a lawsuit against Petrobras. Pennsylvania is not part of the lawsuit. Credit: By Will Connors
Subject: Pension funds; Litigation; Corporate governance; Retirement; Fiduciary responsibility
Location: Ohio United States--US
Company / organization: Name: Petroleos Brasileiro SA; NAICS: 211111; Name: District Court-US; NAICS: 922110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652478591
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652478591?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
S&P Cuts Credit Ratings of Oil-Dependent Countries; Ratings Firm Points to Sharp Drop in Oil Prices
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract:
S&P, however, affirmed Abu Dhabi and Quatar's double-A ratings, two notches below the coveted triple-A rating, saying the emirates stronger fiscal positions will be able to buffer the impact of lower oil prices.
Full text: Standard & Poor's Ratings Services on Monday cut its credit ratings on Kazakhstan, Bahrain, Oman and Venezuela, citing the impact of plunging oil prices on the oil producing nations. Meanwhile, the rating firm issued negative outlooks for Bahrain, Kazakhstan, Oman, Saudi Arabia, and Venezuela, indicating possible downgrades. It affirmed its ratings on Qatar, Abu Dhabi, Malaysia and Cameroon. The rating changes follow a sharp fall in oil prices in recent months. S&P now assumes an average Brent oil price of $55 a barrel this year and $70 a barrel over the next three years, compared with its December projection of $80 a barrel in 2015 and around $85 a barrel through 2018. The downgrades leave Bahrain and Kazakhstan's ratings one and two notches, respectively, above junk status, and Venezuela eight notches into junk. Oman stands at A-minus, and Saudi Arabia at double-A-minus. S&P, however, affirmed Abu Dhabi and Quatar's double-A ratings, two notches below the coveted triple-A rating, saying the emirates stronger fiscal positions will be able to buffer the impact of lower oil prices. It also affirmed its A- rating on Malaysia and its B rating on Cameroon. S&P noted Bahrain derived about 65% of its fiscal revenue last year from crude oil receipts, which are part of the 84% of total revenue it derives from the oil and gas industry. Wages and salaries account for 42% of total government spending, with subsidies representing another 30%. "These increasingly burdensome social expenditures underpin Bahrain's pronounced vulnerability to oil prices," the rating firm said in a statement, noting the government's debt burden has doubled since 2009, to 43% of gross domestic product at the end of 2014. The oil sector, meanwhile, accounts for an estimated 20% to 30% of Kazakhstan's GDP, more than 50% of revenue, and 60% of exports, S&P said. The government's plan to stimulate the economy with billions of dollars, the rating firm said, won't be enough to offset weak consumer demand this year, hurt by falling consumer confidence and external factors such as the recession in Russia. The rating firm said it expects Kazakhstan's oil production to decrease slightly, with output falling in 2015 to 80.5 million tons, from 81.8 million tons, and expects Kazakhstan to post a current-account deficit of more than 4% of GDP in 2014. In Venezuela's case, the rating firm said the government had failed to take action in time and now--buffeted by a recession, high inflation and growing shortages in consumer goods--has little room to make the changes necessary "to avoid a default of its commercial debt." S&P said it expects the South American country's GDP to contract by as much as 7% in 2015, with another decline expected the following year. Inflation, S&P said, could reach 100% or more by year's end, mainly due to growing shortages of basic products. Write to Maria Armental at maria.armental@wsj.com Credit: By Maria Armental
Subject: Petroleum industry; Prices; Ratings & rankings; Recessions; Petroleum production
Location: Oman Venezuela Qatar Kazakhstan Malaysia Bahrain Cameroon Abu Dhabi United Arab Emirates Saudi Arabia
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652490949
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652490949?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Producers Stress Surviving $50 Oil; Investors Weigh Independents' Balance Sheets, Prospects Amid $50 Oil
Author: Ailworth, Erin; Cook, Lynn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]09 Feb 2015: n/a.
Abstract:
Though several big shale drillers have yet to outline their plans, more than two dozen U.S. oil producers have already cut their spending estimates for this year by $25 billion compared with 2014 budgets, according to a Wall Street Journal review of company financial reports.
Full text: A year ago, Houston oil and gas company Energy XXI Ltd. was getting ready to take on $1 billion in debt to buy a rival. Its stock climbed toward $24 a share. On Monday, the debt-laden company laid out its strategy for survival after that deal contributed to a $377 million loss for its December quarter. On the list: asset sales, expense cuts and cashing in oil-price contracts it signed before prices tumbled. Shares of the energy producer, which operates in the shallow waters of the Gulf of Mexico, now change hands for less than $4 apiece. "The culture of the company has changed, with more focus on cost savings and low risk projects," Chief Executive John Schiller told analysts on Monday. Though Energy XXI is in a tough spot, it is far from alone in the oil patch these days. As more independent energy producers release results this month, investors' focus will be on their strategies for dealing with U.S. oil prices likely to hover around $50 a barrel this year. Many of them borrowed heavily to drill wells when prices were over $100 and are now embracing austerity measures, including leaving crude in the ground until prices rise. "The real focus will be on more survival plans for 2015--how they plan to operate in this environment," said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "It will come down to who has...better break-even costs, and who has the better balance sheet so that you can be confident they will survive." Though several big shale drillers have yet to outline their plans, more than two dozen U.S. oil producers have already cut their spending estimates for this year by $25 billion compared with 2014 budgets, according to a Wall Street Journal review of company financial reports. Oil prices have moved up nearly 19% to about $53 a barrel since January lows as the market reacted favorable to U.S. energy companies putting drilling rigs in storage and slowing oil output in Libya, due to strife. Some of the biggest U.S. independent producers seem to be in good shape to weather the oil-price rout. Analysts say that Pioneer Natural Resources Co., which reports earnings on Tuesday, is well-hedged against the price drop and has a strong balance sheet. Though its share price has fallen by almost a third since last summer, its market capitalization is over $22 billion. The Irving, Texas, company is expected to post hefty profits, and to announce significant spending cuts. When oil was trading at $90 a barrel, Pioneer was eager to move forward with a $1 billion project to help clean and recycle the huge amounts of water required to hydraulically fracture wells. The company is weighing how much it can spend this year on that project. A spokesman for Pioneer declined to comment. At the other extreme, some of the small fry in the energy ecosystem are already seeking a lifeboat. Lucas Energy Inc., a South Texas driller with $7.2 million in debt, recently missed a payment and announced last week that it is pursuing a merger with an Austin-based competitor. Lucas's CEO, Anthony Schnur, said a combination was always in the company's plans, but the downturn caused financing to dry up, accelerating the process. "We would have like to have drilled these couple of wells with our partners and put the company on better footing before we merged," he said, adding: "we had to read the market and react when we did." To keep expenses in check, some companies are considering holding off completing wells that have already been drilled but aren't yet pumping crude, essentially storing oil in the ground. By deferring the final work, producers can save roughly 60% of a well's cost, analysts say. Continental Resources Inc. Chief Executive Harold Hamm pushed this strategy at an energy conference late last month, urging peers to pull back if they can afford to do so. "Certainly, we're not going to be completing wells today," Mr. Hamm said in an interview. "We're going to cut way back on that." The company, one of the biggest oil producers in North Dakota, has already said it would slash the number of drilling rigs it operates to about 34 from 50 and twice cut its spending plans. But in November it disclosed it had liquidated nearly all its oil-price hedges, leaving it exposed to crude prices that subsequently fell sharply, prompting analysts to expect lower earnings when the company reports results Feb. 24. Others companies are contemplating whether to close out the financial contracts that can help insulate them when crude prices fall. At a recent meeting with analysts, Carrizo Oil & Gas Inc. raised the possibility of revamping its hedging strategy to get some cash in hand, said Tim Rezvan, an analyst at Sterne Agee. "Nothing is off the table right now in terms of what they can do to raise capital," Mr. Rezvan said. Carrizo, which grew rapidly by drilling in South Texas, already cut its capital spending by 35% and has decided not to complete some wells. "This should maintain our strong balance sheet and also allow us to quickly resume rapid oil production growth once prices recover," said CEO Chip Johnson in a statement late last month. Carrizo's quick action appears to have pleased investors; its shares have jumped almost 60% since bottoming out at about $32.50 in December. Energy XXI hasn't been so fortunate. Its $2.3 billion acquisition helped load the company with nearly $4 billion in debt just as oil prices crashed and investors began focusing on healthy balance sheets. The company took a $329 million write down in the quarter related to the deal. Its bonds due in 2021 recently traded at about 50 cents on the dollar, according to data provider MarketAxess. Its stock fell nearly 7%, or 22 cents, to $3.77 a share in 4 p.m. Nasdaq trading on Monday. Write to Erin Ailworth at Erin.Ailworth@wsj.com and Lynn Cook at lynn.cook@wsj.com Credit: By Erin Ailworth and Lynn Cook
Subject: Petroleum industry; Stock prices; Balance sheets; Cost control
Location: United States--US
Company / organization: Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Robert W Baird & Co; NAICS: 523110, 523120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 9, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652534588
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652534588?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Plunge in Oil Prices Unlikely to Last Much Longer, IEA Says; Group Says Scope of Rebound Will Be Limited and Won't Feature Prices at Heights of Last Three Years
Author: Kent, Sarah
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Prices have fallen more than 50% since June, prompting a wave of spending cuts among oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. Those shifts should start to have an impact on oil prices as soon as the second half of the year, as American oil drawn from shale formations is proving responsive to the market slump, said the IEA, a Paris-based energy watchdog.
Full text: LONDON--The rapid slide in oil prices over the last nine months won't last much longer, but the rebound will be limited and won't feature prices at the heights of the last three years, the International Energy Agency said Tuesday. The crude market succumbed to a steep selloff last year amid booming production in North America and sluggish global demand. Prices have fallen more than 50% since June, prompting a wave of spending cuts among oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. Those shifts should start to have an impact on oil prices as soon as the second half of the year, as American oil drawn from shale formations is proving responsive to the market slump, said the IEA, a Paris-based energy watchdog. "We're looking at a contraction in the U.S.," said Antoine Halff, head of the IEA's oil industry and markets division. "We're looking at a supply increase which is probably 300,000 barrels a day less than would have been expected prior to the price decrease." Though the Paris-based agency said downward pressures on the market have yet to run their course, a sharp increase in oil storage prompted by ample supply could grind to a halt as soon as the middle of the year, and the market is expected tighten through 2016. In its most recent analysis, which takes a five-year view of the oil market, the IEA forecast that global oil supply will grow by just 860,000 barrels a day to 2020, compared with an increase of 1.8 million barrels a day in 2014. However, the slowdown in U.S. shale oil output is expected to be short-lived as prices rebound, with more conventional oil producers like Russia suffering more in the medium-term. "The price correction will cause the North American supply 'party' to mark a pause; it will not bring it to an end," the IEA said. From 2017, the IEA expects U.S. shale oil to come back sharply, stimulated by a recovery in prices. It forecasts supply will rise to about 5.2 million barrels a day in 2020 compared with 3.6 million barrels a day in 2014. The swift return of U.S. supply growth would likely limit any sharp increase in prices as markets tighten over the coming years, marking a significant departure from boom-and-bust patterns seen previously in the oil market. "We're in a situation where light, tight oil supplies a floor in a downturn because it's quick to respond, but then you see it's as quick to respond on the rebound and provides a bit of a ceiling on prices," Mr. Halff of the IEA said, using a technical term for shale oil. The role the IEA expects shale oil to play in rebalancing the oil market signifies a dramatic shift in the role played by the Organization of the Petroleum Exporting Countries. OPEC has traditionally acted as the swing producer, increasing output when supply seemed tight and cutting production in periods of oversupply. However, the producer group roiled the market in November when it opted to defend its market share, rather than cut output to shore up prices, abandoning its traditional role and sending prices into a tailspin. The economic impact of lower prices on OPEC has been severe, but in terms of market share it is already paying dividends. OPEC said Monday that demand for its oil will increase to 29.2 million barrels a day this year. That is still below the group's output quota of 30 million barrels a day, but a significant upward revision from previous forecasts. Longer term, the IEA expects the oil cartel's defensive strategy could prove more effective. Though U.S. shale output--thought by many to be a target of OPEC's defensive policy--will remain a major source of new oil supply at the end of the decade, demand for OPEC's oil will also increase as other sources of non-OPEC supply take longer to recover from lower prices. The IEA forecasts demand for OPEC's oil will start rising in 2016 and reach 32.1 million barrels a day by 2020, 2.7 million barrels a day above demand in 2014. Write to Sarah Kent at sarah.kent@wsj.com Credit: By Sarah Kent
Subject: Petroleum industry; Market shares; Crude oil prices; Oil shale
Location: United States--US North America
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652566803
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652566803?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Encana's Worries About an Energy Glut Aren't Over Yet; Firm Bet on Oil as Natural-Gas Prices, Profits Fell
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Encana chose to undertake a turnaround that included reducing its head count by nearly a quarter, selling off billions of dollars in natural-gas assets and plowing most of the proceeds into U.S. shale-oil investments. Five months ago it agreed to buy Athlon Energy Inc. for $5.9 billion, giving it a foothold in the richest oil-producing part of West Texas's Permian Basin with some 140,000 acres and production of 30,000 barrels a day of oil equivalent.
Full text: CALGARY--A little over a year ago, Canadian natural-gas giant Encana Corp. bet big on oil after being hobbled for years by declining natural-gas prices and profits. Now, its ambitious plan to remake itself into a shale-oil powerhouse has been muddied by the same kind of glut worries that made it turn to oil. Encana isn't the only North American producer confronting the multiyear natural-gas glut. Those pressures led crosstown rival Talisman Energy Inc. to accept a buyout offer from Repsol SA in December. Chesapeake Energy Corp. and other large U.S. natural-gas producers have already pivoted to oil production. Encana chose to undertake a turnaround that included reducing its head count by nearly a quarter, selling off billions of dollars in natural-gas assets and plowing most of the proceeds into U.S. shale-oil investments. The moves are re-engineering its bottom line. Less than two years ago, more than half of its operating cash flow came from natural gas and just 20% from oil. This year, it expects to reverse that. But surging North American oil production and a plunge of more than 50% in crude-oil prices in recent months have made the transition bumpier than Encana expected. In one sign of that harsh new reality, the firm says its earnings release later this month will include a reduction in the bullish 2015 spending budget it announced less than two months ago. "Our cash flow has dropped as the oil price has dropped so we need to adjust our capital," Chief Executive Doug Suttles said in an interview. "It'll come down some," he said of the budget, which Encana pegged at $2.7 billion to $2.9 billion in December. Mr. Suttles, who drafted the plan to transform the company from a natural-gas pure play to a leader in shale oil, said he is confident Encana can expand production profitably despite lower prices for both oil and gas. But investors aren't so sure. Encana's share price--which had risen about 40% in Mr. Suttle's first year--is now trading just below its level when he took the helm. Mr. Suttles, an American and the former BP PLC executive who led the initial response to the 2010 Deepwater Horizon accident in the Gulf of Mexico, was tapped to shake up the company. When he arrived at Encana in June 2013, employees were still unpacking boxes from a move into the highest floors of a new headquarters building known as The Bow, which dominates Calgary's skyline. That milestone had been overshadowed by a CEO search that dragged on for six months, four successive quarters of red ink and low morale after embattled former CEO Randy Eresman resigned. Mr. Eresman had overseen an aggressive expansion that left Encana ill-prepared when North American natural-gas prices plummeted. He stepped down in January 2013. Less than six months after being named CEO, Mr. Suttles began slashing jobs, closed a satellite office in Plano, Texas, and reduced the number of geologic plays where Encana is active by more than half, to 12. The company named that restructuring plan "Getting back to winning." Mr. Suttles is betting the firm's future on growth in four key shale areas, two of them in Western Canada and two in his home state of Texas. The four, which will account for 80% of Encana's capital spending this year, largely will be spared that budget cuts landing hardest on less critical basins such as the Denver-Julesberg in Colorado and San Juan in New Mexico, he said. The Texas assets are recent additions to Encana's portfolio. Last May, the firm acquired nearly 50,000 acres in South Texas for $3.1 billion, instantly doubling its oil production. Five months ago it agreed to buy Athlon Energy Inc. for $5.9 billion, giving it a foothold in the richest oil-producing part of West Texas's Permian Basin with some 140,000 acres and production of 30,000 barrels a day of oil equivalent. "The changes we made better positioned us for a low-price world," Mr. Suttles said, adding that the company's supply cost--a measure of profitability that includes a 10% rate of return--is at or below current crude prices. To fund those deals, Encana last year spun off its royalties business and sold gas properties. The firm said that all told, it raised about $8 billion and spent nearly $10 billion in 2014. It added that its rapid deal-making pace has put it two years ahead of its restructuring targets. "He's doing an exceptional job" said Clayton Woitas, Encana's chairman. Some investment bankers say Encana overpaid for Athlon, noting that the deal was made when oil was trading at nearly $100 a barrel. Analysts have also questioned the company's bullish assessment of production potential in the Midland Basin section of the greater Permian. Its estimate is nearly triple Athlon's estimates for the same acreage. But Mr. Suttles told analysts when the deal was announced that he has strong convictions about the Permian as well as a personal connection to it. "My grandfather started working in the Midland Basin in 1933," he said. "It has been shown to be incredibly dynamic and arguably as dynamic as anywhere in the world." Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Budgets; Petroleum industry; Cash flow; Capital expenditures; Natural gas; Petroleum production
Location: United States--US
Company / organization: Name: Athlon Energy Inc; NAICS: 211111, 211112; Name: Talisman Energy Inc; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Chesapeake Energy Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652566829
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/165 2566829?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Price Rebound Predicted; IEA Adds to Chorus of Voices Saying Glut Will Abate
Author: Kent, Sarah; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract: None available.
Full text: In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems "inevitable" and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half. A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation's oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month. The IEA, which coordinates energy policy among industrialized countries, is adding its voice to the chorus of experts who say that the global glut is abating. The IEA said its report, which presents a view of the oil markets five years out, aims to shed light on how a recovery will proceed, adding that a "price rebound...seems inevitable." Stabilization in oil prices would spell relief across financial markets, which have been rocked by concerns that oil's plunge signaled softness in global growth. The plunge has pummeled share prices of oil producers and currencies of oil-dependent economies. If sustained, rising oil prices would curb the boon U.S. consumers have reaped from lower gasoline prices . A spike in crude prices could also create headwinds for a global economy already struggling with fragile growth in some corners. The average price of regular gasoline at the pump was $2.18 a gallon on Monday, according to motor club AAA. While that is up from the nearly six-year low of $2.03 a gallon reached on Jan. 26, it is below the $3.28 seen this time last year. "You do have evidence that future production will be curtailed," said Keith Hembre, chief economist and portfolio manager at Nuveen Asset Management LLC in Minneapolis who oversees $800 million across four funds. Oil companies like Royal Dutch Shell PLC, Chevron Corp., BP PLC and Norway's Statoil ASA have slashed their investment programs by billions of dollars, moves that analysts say eventually will damp production growth. The forecast slowdown in U.S. oil output appears to be coming at the benefit of the Organization of the Petroleum Exporting Countries, analysts said. In a separate report, released Monday, OPEC said demand for the group's oil would rise in 2015, reversing an earlier estimate that predicted a decline. The conclusions drawn from the IEA and the OPEC reports indicate that OPEC's strategy to protect market share by keeping the spigots open is showing early signs of success. Led by Saudi Arabia, OPEC in November surprised markets when it maintained its production levels , a move that some observers said was aimed at weakening U.S. shale-oil producers. The earnings of big oil companies have been battered by the decline in oil prices, but many investors expect these firms to persevere through the slump. The speed and size of the decline, though, have raised questions about how smaller, independent oil producers will survive in an environment of low oil prices. Oil from newly tapped U.S. shale fields is more expensive to produce than crude in much of the rest of the world, so output is harder to sustain when prices are low. An OPEC official from the Persian Gulf said the cartel's report reflects views held by Saudi Arabia's oil ministry. "There are strong indications that U.S. shale producers are taking a hit, and by the second half of this year a lot of marginal barrels will disappear from the market and demand will rise for OPEC members," he said. OPEC's new forecast doesn't necessarily mean oil prices will bounce back to their previous levels. Its own production remains nearly one million barrels a day above the amount markets need. The IEA concurs, saying that any rebound in oil prices will be capped. In its analysis, the coming price increases will likely be tempered by a rebound in U.S. oil output. From 2017, the organization expects U.S. shale-oil output to surge again, stimulated by a recovery in prices. It forecasts supply will rise to about 5.2 million barrels a day in 2020, compared with 3.6 million barrels a day in 2014. "The price correction will cause the North American supply 'party' to mark a pause; it will not bring it to an end," the IEA said. Although U.S. shale output will remain a major source of new oil supply at the end of the decade, demand for OPEC's oil will also increase as other sources of non-OPEC supply take longer to recover from lower prices. The IEA forecasts demand for OPEC's oil will start rising in 2016 and reach 32.1 million barrels a day by 2020, 2.7 million barrels a day above demand in 2014. OPEC also sees American motorists as an ally. The cartel increased its forecast for North American oil consumption by 15,000 barrels a day, a shift that translates into an increase of 20,000 barrels a day in forecast demand growth world-wide. "Gasoline, in particular, remains a key driver behind the growth in U.S. oil demand, largely a result of lower oil prices," OPEC said. Overall, oil consumption is expected to increase by 1.17 million barrels a day to 92.32 million barrels a day. Corrections & Amplifications An earlier version of this article said OPEC increased its forecast for North American consumption by 150,000 barrels a day. It increased its forecast by 15,000 barrels a day. Tim Puko, Summer Said and Nicole Friedman contributed to this article. Write to Benoît Faucon at benoit.faucon@wsj.com Credit: By Sarah Kent And Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652566886
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652566886?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Tumble on Oversupply Concerns; U.S. Crude Supplies at Highest Level in About 80 Years
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
[...]stored supplies start shrinking, "it's really going to become increasingly difficult for this market to rally," Mr. Lebow said.
Full text: U.S. oil prices tumbled on Tuesday, snapping a three-day streak of gains, on concerns that swelling global oil inventories would keep prices subdued in the coming months. U.S. oil for March delivery fell $2.84, or 5.4%, to $50.02 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, slid $1.91, or 3.3%, to $56.43 a barrel on ICE Futures Europe. Oil prices lost half of their value in 2014 and continued falling in January as rapid supply growth overwhelmed moderate demand. The Organization of the Petroleum Exporting Countries opted not to cut output, further weighing on prices. Analysts say the market is oversupplied, and some expect prices to fall to new lows as refiners enter seasonal maintenance, lowering demand for crude oil, and global inventories continue to grow. The International Energy Agency said in a monthly report released Tuesday that commercial petroleum inventories held by the nations that are members of the Organization of Economic Cooperation and Development could test all-time highs by the middle of the year. "The inventory growing to that extent--that definitely outlines the problem to the market," said Andy Lebow, senior vice president for energy at Jefferies LLC. "We're going to have to slog through all this inventory." Until stored supplies start shrinking, "it's really going to become increasingly difficult for this market to rally," Mr. Lebow said. The IEA's concerns were echoed by the U.S. Energy Information Administration, in its own monthly report released Tuesday, and by Ian Taylor, chief executive of oil-trading firm Vitol SA. The increase in world-wide stockpiles will be "quite dramatic" in the coming months, keeping prices in check, Mr. Taylor said in London Tuesday. In the U.S., crude-oil supplies have climbed to their highest levels in about 80 years, and analysts expect stockpiles to keep growing. Analysts surveyed by The Wall Street Journal expect the EIA to report Wednesday that U.S. crude-oil supplies increased by 4 million barrels in the week ended Feb. 6. The weekly EIA storage data is due at 10:30 a.m. EST. The American Petroleum Institute, an industry group, said late Tuesday that its own data for the same week showed that crude stocks rose by 1.6 million barrels. Oil prices pared losses on the news. Oil prices had risen in recent days as investors looked past near-term bearish signals to focus on signs that supply and demand could come into balance by the end of the year. The IEA on Tuesday forecast that U.S. production growth will grind to a halt in the second half of 2015, and OPEC raised its estimate for demand for its own oil this year. Gasoline futures fell 2.59 cents, or 1.6%, to $1.5523 a gallon. Diesel futures slipped 4.02 cents, or 2.1%, to $1.8327 a gallon. Georgi Kantchev contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Supply & demand; Petroleum industry; Inventory; Futures
Location: United States--US
Company / organization: Name: Vitol SA; NAICS: 424710, 424720, 486910; Name: Jefferies LLC; NAICS: 523110; Name: International Energy Agency; NAICS: 928120; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652616854
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652616854?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil-Price Rebound Predicted --- Global Monitor Cites Spending Cuts by Crude Producers, Decline in U.S. Drilling
Author: Kent, Sarah; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Feb 2015: A.1.
Abstract:
Oil companies like Royal Dutch Shell PLC, Chevron Corp., BP PLC and Norway's Statoil ASA have slashed their investment programs by billions of dollars, moves that analysts say eventually will damp production growth.
Full text: In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems "inevitable" and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half. A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation's oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month. The IEA, which coordinates energy policy among industrialized countries, is adding its voice to the chorus of experts who say that the global glut is abating. The IEA said its report, which presents a view of the oil markets five years out, aims to shed light on how a recovery will proceed, adding that a "price rebound. . .seems inevitable." Stabilization in oil prices would spell relief across financial markets, which have been rocked by concerns that oil's plunge signaled softness in global growth. The plunge has pummeled share prices of oil producers and currencies of oil-dependent economies. If sustained, rising oil prices would curb the boon U.S. consumers have reaped from lower gasoline prices. A spike in crude prices could also create headwinds for a global economy already struggling with fragile growth in some corners. The average price of regular gasoline at the pump was $2.18 a gallon on Monday, according to motor club AAA. While that is up from the nearly six-year low of $2.03 a gallon reached on Jan. 26, it is below the $3.28 seen this time last year. "You do have evidence that future production will be curtailed," said Keith Hembre, chief economist and portfolio manager at Nuveen Asset Management LLC in Minneapolis who oversees $800 million across four funds. Oil companies like Royal Dutch Shell PLC, Chevron Corp., BP PLC and Norway's Statoil ASA have slashed their investment programs by billions of dollars, moves that analysts say eventually will damp production growth. The forecast slowdown in U.S. oil output appears to be coming at the benefit of the Organization of the Petroleum Exporting Countries, analysts said. In a separate report, released Monday, OPEC said demand for the group's oil would rise in 2015, reversing an earlier estimate that predicted a decline. The conclusions drawn from the IEA and the OPEC reports indicate that OPEC's strategy to protect market share by keeping the spigots open is showing early signs of success. Led by Saudi Arabia, OPEC in November surprised markets when it maintained its production levels, a move that some observers said was aimed at weakening U.S. shale-oil producers. The earnings of big oil companies have been battered by the decline in oil prices, but many investors expect these firms to persevere through the slump. The speed and size of the decline, though, have raised questions about how smaller, independent oil producers will survive in an environment of low oil prices. Oil from newly tapped U.S. shale fields is more expensive to produce than crude in much of the rest of the world, so output is harder to sustain when prices are low. An OPEC official from the Persian Gulf said the cartel's report reflects views held by Saudi Arabia's oil ministry. "There are strong indications that U.S. shale producers are taking a hit, and by the second half of this year a lot of marginal barrels will disappear from the market and demand will rise for OPEC members," he said. OPEC's new forecast doesn't necessarily mean oil prices will bounce back to their previous levels. Its own production remains nearly one million barrels a day above the amount markets need. The IEA concurs, saying that any rebound in oil prices will be capped. In its analysis, the coming price increases will likely be tempered by a rebound in U.S. oil output. From 2017, the organization expects U.S. shale-oil output to surge again, stimulated by a recovery in prices. It forecasts supply will rise to about 5.2 million barrels a day in 2020, compared with 3.6 million barrels a day in 2014. "The price correction will cause the North American supply 'party' to mark a pause; it will not bring it to an end," the IEA said. Although U.S. shale output will remain a major source of new oil supply at the end of the decade, demand for OPEC's oil will also increase as other sources of non-OPEC supply take longer to recover from lower prices. The IEA forecasts demand for OPEC's oil will start rising in 2016 and reach 32.1 million barrels a day by 2020, 2.7 million barrels a day above demand in 2014. OPEC also sees American motorists as an ally. The cartel increased its forecast for North American oil consumption by 15,000 barrels a day, a shift that translates into an increase of 20,000 barrels a day in forecast demand growth world-wide. "Gasoline, in particular, remains a key driver behind the growth in U.S. oil demand, largely a result of lower oil prices," OPEC said. Overall, oil consumption is expected to increase by 1.17 million barrels a day to 92.32 million barrels a day. --- Tim Puko, Summer Said and Nicole Friedman contributed to this article. Credit: By Sarah Kent and Benoit Faucon
Subject: Petroleum industry; Gasoline prices; Crude oil prices; Petroleum production
Location: United States--US
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Statoil ASA; NAICS: 324110, 211111; Name: International Energy Agency; NAICS: 928120; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Nuveen Asset Management LLC; NAICS: 523930
Classification: 9180: International; 8510: Petroleum industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Feb 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652642655
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652642655?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Oil Drillers Focus on Surviving $50 Crude --- As Independent Producers Prepare to Release Results, Investors Turn Attention to Strategies for Dealing With Low Prices
Author: Ailworth, Erin; Cook, Lynn
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]10 Feb 2015: B.4.
Abstract:
Though several big shale drillers have yet to outline their plans, more than two dozen U.S. oil producers have already cut their spending estimates for this year by $25 billion compared with 2014 budgets, according to a Wall Street Journal review of company financial reports.
Full text: A year ago, Houston oil and gas company Energy XXI Ltd. was getting ready to take on $1 billion in debt to buy a rival. Its stock climbed toward $24 a share. On Monday, the debt-laden company laid out its strategy for survival after that deal contributed to a $377 million loss for its December quarter. On the list: asset sales, expense cuts and cashing in oil-price contracts it signed before prices tumbled. Shares of the energy producer, which operates in the shallow waters of the Gulf of Mexico, now change hands for less than $4 apiece. "The culture of the company has changed, with more focus on cost savings and low risk projects," Chief Executive John Schiller told analysts on Monday. Though Energy XXI is in a tough spot, it is far from alone in the oil patch these days. As more independent energy producers release results this month, investors' focus will be on their strategies for dealing with U.S. oil prices likely to hover around $50 a barrel this year. Many of them borrowed heavily to drill wells when prices were over $100 and are now embracing austerity measures, including leaving crude in the ground until prices rise. "The real focus will be on more survival plans for 2015 -- how they plan to operate in this environment," said Daniel Katzenberg, an analyst at Robert W. Baird & Co. "It will come down to who has . . . better break-even costs, and who has the better balance sheet so that you can be confident they will survive." Though several big shale drillers have yet to outline their plans, more than two dozen U.S. oil producers have already cut their spending estimates for this year by $25 billion compared with 2014 budgets, according to a Wall Street Journal review of company financial reports. Oil prices have moved up nearly 19% to about $53 a barrel since January lows as the market reacted favorable to U.S. energy companies putting drilling rigs in storage and slowing oil output in Libya, due to strife. Some of the biggest U.S. independent producers seem to be in good shape to weather the oil-price rout. Analysts say that Pioneer Natural Resources Co., which reports earnings on Tuesday, is well-hedged against the price drop and has a strong balance sheet. Though its share price has fallen by almost a third since last summer, its market capitalization is over $22 billion. The Irving, Texas, company is expected to post hefty profits, and to announce significant spending cuts. When oil was trading at $90 a barrel, Pioneer was eager to move forward with a $1 billion project to help clean and recycle the huge amounts of water required to hydraulically fracture wells. The company is weighing how much it can spend this year on that project. A spokesman for Pioneer declined to comment. At the other extreme, some of the small fry in the energy ecosystem are already seeking a lifeboat. Lucas Energy Inc., a South Texas driller with $7.2 million in debt, recently missed a payment and announced last week that it is pursuing a merger with an Austin-based competitor. Lucas's CEO, Anthony Schnur, said a combination was always in the company's plans, but the downturn caused financing to dry up, accelerating the process. "We would have like to have drilled these couple of wells with our partners and put the company on better footing before we merged," he said, adding: "we had to read the market and react when we did." To keep expenses in check, some companies are considering holding off completing wells that have already been drilled but aren't yet pumping crude, essentially storing oil in the ground. By deferring the final work, producers can save roughly 60% of a well's cost, analysts say. Continental Resources Inc. Chief Executive Harold Hamm pushed this strategy at an energy conference late last month, urging peers to pull back if they can afford to do so. "Certainly, we're not going to be completing wells today," Mr. Hamm said in an interview. "We're going to cut way back on that." The company, one of the biggest oil producers in North Dakota, has already said it would slash the number of drilling rigs it operates to about 34 from 50 and twice cut its spending plans. But in November it disclosed it had liquidated nearly all its oil-price hedges, leaving it exposed to crude prices that subsequently fell sharply, prompting analysts to expect lower earnings when the company reports results Feb. 24. Others companies are contemplating whether to close out the financial contracts that can help insulate them when crude prices fall. At a recent meeting with analysts, Carrizo Oil & Gas Inc. raised the possibility of revamping its hedging strategy to get some cash in hand, said Tim Rezvan, an analyst at Sterne Agee. "Nothing is off the table right now in terms of what they can do to raise capital," Mr. Rezvan said. Carrizo already cut its capital spending by 35% and has decided not to complete some wells. "This should maintain our strong balance sheet and also allow us to quickly resume rapid oil production growth once prices recover," said CEO Chip Johnson in a statement late last month. Carrizo's quick action appears to have pleased investors; its shares have jumped almost 60% since bottoming out at about $32.50 in December. Energy XXI hasn't been so fortunate. Its $2.3 billion acquisition helped load the company with nearly $4 billion in debt just as oil prices crashed and investors began focusing on healthy balance sheets. The company took a $329 million write down in the quarter related to the deal. Its bonds due in 2021 recently traded at about 50 cents on the dollar, according to data provider MarketAxess. Credit: By Erin Ailworth and Lynn Cook
Subject: Petroleum industry; Stock prices; Balance sheets; Cost control; Drilling; Crude oil prices; Oil exploration
Location: United States--US
Company / organization: Name: Pioneer Natural Resources Co; NAICS: 211111; Name: Robert W Baird & Co; NAICS: 523110, 523120
Classification: 9180: International; 8510: Petroleum industry; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Feb 10, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652642707
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652642707?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Iraq Minister Predicts Oil Price Recovery; Oil Minister Says Oil Glut Will Abate, Demand Will Increase
Author: Kent, Sarah; Said, Summer
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
"The price fall has no real justification," oil minister Adel Abdul-Mehdi said in a statement published on the Iraq oil ministry's website, adding that he expected oil demand to increase andspending cuts to hit high-cost oil projects, reducing supply in the market and helping to halt the fall in prices.
Full text: An eight-month slump in the oil market has reached a bottom and prices will recover, Iraq's oil minister predicted Tuesday. Oil prices have slumped more than 50% since June amid a surge in oil supply led by U.S. shale oil production and sluggish demand. Iraq and other members of the Organization of the Petroleum Exporting Countries have taken a hands-off approach to the selloff, opting to defend market share rather than cut production to bolster prices as the group had done in the past. "The price fall has no real justification," oil minister Adel Abdul-Mehdi said in a statement published on the Iraq oil ministry's website, adding that he expected oil demand to increase andspending cuts to hit high-cost oil projects, reducing supply in the market and helping to halt the fall in prices. The minister's comments somewhat echo analysis by the International Energy Agency this week, which predicted that a recovery in oil prices seems "inevitable" and that the glut that has driven down prices in recent months could start to ease by the middle of the year. Write to Sarah Kent at sarah.kent@wsj.com and Summer Said at summer.said@wsj.com Credit: By Sarah Kent and Summer Said
Subject: Petroleum industry; Supply & demand; Prices; Petroleum production
Location: United States--US Iraq
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652643250
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652643250?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Talisman Hit With $1.4B of Charges on Slumping Oil Prices; Canadian Energy Company Posts Wider Fourth-Quarter Loss
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Talisman Energy Inc., the big Canadian energy company being acquired by Spain's Repsol SA, posted a wider fourth-quarter loss Tuesday after booking nearly $1.4 billion of charges related to slumping oil prices.
Full text: Talisman Energy Inc., the big Canadian energy company being acquired by Spain's Repsol SA, posted a wider fourth-quarter loss Tuesday after booking nearly $1.4 billion of charges related to slumping oil prices. Still, Calgary, Alberta-based Talisman, which agreed in December to be taken over by Repsol for around $8.3 billion, said production, cash flow and capital spending for the year overall were in line with guidance. With oil prices down about 50% from levels in June, Talisman said it partially impaired its investment in the Eagle Ford shale play in Texas, taking a $614 million charge, and fully impaired its investment in Block K44 in the Kurdistan region of Iraq, recording a $234 million charge. Charges, which totaled $1.37 billion overall, were also booked for assets in the North Sea and Colombia. Talisman posted a fourth-quarter loss of $1.59 billion, or $1.54 a share, in the fourth quarter, compared with a loss of $1.01 billion, or 98 cents, a year earlier. Its loss from operations, which excludes items, widened to $143 million from $116 million. Cash flow dropped to $508 million from $580 million, it said, while production from ongoing operations edged up to 364,000 barrels of oil equivalent a day from 354,000 barrels a day a year earlier. Talisman, which owns shale acreage and offshore oil rigs, said capital spending for 2014 totaled about $3 billion, down 5% from 2013. Repsol's $8-a-share offer for Talisman in December came as slumping oil prices drained the company of cash and weighed on its share price. Talisman had been working to sell off assets to lighten its heavy debt load amid declining commodity prices. Talisman said Tuesday that regulatory approvals for Repsol's takeover are on track and it continues to expect the deal to close in the second quarter. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Petroleum industry; Cash flow; Prices; Financial performance
Location: Calgary Alberta Canada Spain Colombia Iraq Kurdistan Texas North Sea
Company / organization: Name: Talisman Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652770080
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652770080?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
KKR Swings to a Narrow Loss; Private-Equity Firm Takes Hit on Energy Investments Amid Falling Oil Prices
Author: Dezember, Ryan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
KKR & Co., one of private equity's biggest energy investors, reported a narrow fourth-quarter loss Tuesday as lower oil prices dented the value of some of its holdings.
Full text: KKR & Co., one of private equity's biggest energy investors, reported a narrow fourth-quarter loss Tuesday as lower oil prices dented the value of some of its holdings. The firm wrote down the value of energy investments made with its money by about $225 million, or about 24% below cost, which countered gains on two of the firm's biggest buyouts, payment processor First Data Corp. and European pharmacy chain Alliance Boots GmbH. KKR is unusual among large private-equity firms in that it invests its own money alongside and independently of the cash it invests for clients such as pension funds and endowments. The firm currently has about $11 billion of its own money invested. KKR became the latest private-equity firm to disclose that plummeting oil and natural gas prices took a toll on the value of its holdings. Rivals Blackstone Group LP and Apollo Global Management LLC earlier reported fourth-quarter results that fell from a year earlier. Apollo's profit decline was more severe and results missed analysts' expectations, while Blackstone's profits beat forecasts. Carlyle Group LP, which last month said its energy funds lost value during the quarter, is scheduled to report results Wednesday. Echoing executives at both Blackstone and Apollo, KKR's leaders predicted opportunities to snap up energy assets on the cheap. "Our teams are very busy, working with [energy] companies and management teams that need capital and a thought partner," said Scott Nuttall, head of KKR's global capital and asset-management group. "The opportunity is immense." KKR reported a fourth-quarter loss of $583,000, down from a profit of $277.9 million, or 96 cents a share, in the same period a year earlier. Its fourth-quarter economic net income was $86.6 million, or 5 cents a share after taxes, down from $789.6 million, or $1.08 a share, a year earlier. The result missed Wall Street's estimates for the profitability measure, which includes unrealized gains as well as cash earnings. Analysts polled by Thomson Reuters anticipated economic net income of 45 cents a share. The results sent KKR's shares 2.8% lower to close at $24.27 Tuesday. The stock is up 4.6% on the year after declining 5.9% in 2014. The New York firm's private-equity portfolio appreciated 2.7% during the fourth-quarter and 12.8% in 2014. Much of the damage done by falling oil prices came before the fourth quarter, as the firm had by the start of October already written off much of the value of its stake in Samson Resources Corp., a Tulsa, Okla., oil and gas producer that KKR and other investors acquired for $7.2 billion in a 2011 buyout. Mr. Nuttall said KKR currently values its investment in Samson at 5 cents on the dollar. Another of KKR's megadeals turned the corner during the quarter, helping to offset some of the damage from its energy bets. KKR marked its investment in First Data up about 12% during the quarter, pushing it above cost for the first time since shortly after the $26 billion buyout in 2007. KKR also reaped cash profits from sales of its stakes in Wild Flavors GmbH, a food maker Archer Daniels Midland Co. bought for about $3 billion, and Versatel GmbH, the owner of a German fiber optic network. While the firm notched big unrealized losses in its energy portfolio, those investments, including stakes in producing wells and drilling pacts, generated $90 million of cash during the fourth quarter. The sales and revenue from energy investments helped generate cash the firm is paying out to shareholders. KKR said it would pay a dividend of 35 cents a share for the quarter, a decrease from 48 cents a year ago. That brings the total KKR paid out in 2014 to $1.90, the firm's highest ever yearly total, eclipsing the record of $1.40 set in 2013. KKR also addressed rebates the firm made to fund investors in 2014 in response to a Securities and Exchange Commission exam. The rebates, previously reported in The Wall Street Journal, amounted to about $8 million, said Craig Larson, head of investor relations. Mr. Larson said the majority of the refunded amount related to how expenses were allocated between KKR's flagship private-equity funds and so-called co-investments made in deals alongside those funds. He said dialogue with the SEC is ongoing. "We can't comment now on what additional developments may occur on this in the future. But we look at our reserve each quarter and as of year-end believe we're adequately reserved for our legal risks," he said. Write to Ryan Dezember at ryan.dezember@wsj.com Credit: By Ryan Dezember
Subject: Profits; Private equity; Financial performance; Investments; Fiber optic networks; Profitability; Natural gas prices
Location: New York
Company / organization: Name: Samson Resources Corp; NAICS: 211111; Name: Thomson Reuters; NAICS: 511110, 511140; Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920; Name: Apollo Global Management LLC; NAICS: 523920; Name: Blackstone Group LP; NAICS: 523110; Name: First Data Corp; NAICS: 522320
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652770559
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652770559?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Bulgaria to Tender 2 Oil & Gas Blocks; Country Looks to Reduce Dependence on Russian Energy, Says Senior Official
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
The Balkan country is in talks with Royal Dutch Shell PLC, BP PLC, Statoil ASA and other oil companies for the exploration of its Teres and Silistar blocks, said Delyan Dobrev, chairman of the energy committee of the Bulgarian parliament.
Full text: LONDON--Bulgaria will invite major global companies to explore two new deep water oil and gas blocks in the Black Sea in a bid to reduce its dependence on Russian energy. The Balkan country is in talks with Royal Dutch Shell PLC, BP PLC, Statoil ASA and other oil companies for the exploration of its Teres and Silistar blocks, said Delyan Dobrev, chairman of the energy committee of the Bulgarian parliament. Bulgaria plans to launch the tender process in the next few weeks, said Mr. Dobrev, who is one of the country's top energy officials. He spoke to The Wall Street Journal on the sidelines of the International Petroleum forum under way in London, where he will be announcing details of the tender process later on Tuesday. With the fall in global oil and natural gas prices in recent months, Mr. Dobrev said: "Now is probably not the best time to tender licenses. But exploration takes many years and prices will recover eventually." Oil prices have fallen around 50% since mid-2014, largely due to ample global supplies and tepid demand. Bulgaria consumes about 3 billion cubic meters of natural gas a year and relies on Russia's Gazprom for more than 90% of its gas. But the country has tried to diversify in recent years by looking for gas deliveries from Azerbaijan and Greece. Developing its own fields is another route that has become more prominent in recent years. "It is important to diversify so that we are not dependent on that same one source," Mr. Dobrev said. "If we find the expected volume of gas in the Black Sea, it will be enough to satisfy our whole domestic consumption. We might even have enough for export." In 2012, Bulgaria issued an exploration permit for another Black Sea field, Khan Asparuh, to a consortium by France's Total SA, Spain's Repsol SA and Austria's OMV AG. In December 2014, Total said the consortium was postponing the works by six months citing the drop in global oil prices. Khan Asparuh may hold more reserves than a field in the neighboring Romanian portion of the Black Sea, which has about 84 billion cubic meters of gas reserves, he said. Mr. Dobrev said that while it is too early to assess the potential oil and gas reserves at the two new fields, they look "very promising." Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Natural gas reserves; Petroleum industry; Oil reserves; Natural gas prices
Location: Bulgaria Black Sea
Company / organization: Name: OAO Gazprom; NAICS: 211111, 221210; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Statoil ASA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652787025
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652787025?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Falling Oil Prices Threaten Houston Building Boom; One-Sixth of U.S. Office Space Under Construction Is Here, but Need Is Waning
Author: Brown, Eliot
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
[...]just as the wave of office-space supply approaches, energy companies, including Halliburton Co., Baker Hughes Inc., Weatherford International and BP PLC, have collectively announced that more than 23,000 jobs would be cut, with many of them expected to be in Houston.
Full text: HOUSTON--The jagged skyline of this oil-rich city is poised to be the latest victim of falling crude prices. As the energy sector boomed in recent years, developers flocked to Houston, so much so that one-sixth of all the office space under construction in the entire U.S. is in the metropolitan area of the Texas city. But now, the need for more offices is drying up, thanks to a drop in oil prices that has spun energy companies from an outlook of optimism and growth to anxiety and cutbacks. Oil prices have fallen by more than 50% since June. Demand for office space is "going to basically stop," said Walter Page, director of office research at property data firm CoStar Group Inc. "It hurts a lot more when you have a lot of construction." By the end of 2014, construction had started on about 80 buildings with about 18 million square feet of office space in the greater Houston area, according to CoStar. Many of the buildings were planned or started when oil was above $100 a barrel. On Tuesday, oil futures traded around $50 . The amount under construction is equal to Kansas City, Mo.'s entire downtown office market and is 16% of all U.S. office development under way. The rush of building has created thousands of jobs--not only at building sites, but also at window manufacturers, concrete companies and restaurants that feed the workers. But just as the wave of office-space supply approaches, energy companies, including Halliburton Co., Baker Hughes Inc., Weatherford International and BP PLC, have collectively announced that more than 23,000 jobs would be cut, with many of them expected to be in Houston. Fewer workers, of course, means less need for office space. Employers have rushed to sublease space in recent months, with 5.2 million square feet of space on the market as of last month, up about 1 million square feet from mid-2014, according to brokerage firm Savills Studley. BP, for example, is trying to sublet 240,000 square feet of space at its campus in the Westlake neighborhood, which represents about 11% of BP's space at the campus, according to CoStar. A BP spokesman said the company is "consolidating" its footprint. Conditions could improve if oil prices rise. The International Energy Agency on Tuesday said oil companies' recent cutbacks in production will likely slow the growth of U.S. oil output , which in turn would lead to a rebound in prices. But the current building boom is Houston's biggest since the 1980s, when an oil bust, coupled with a rash of empty skyscrapers, made Houston a national symbol of overbuilding. Then, armed with debt from a banking sector eager to lend, developers brought a tidal wave of building to Houston, in some years increasing the office stock by well over 10%. Vacancy rates shot up past 30% from single digits, property values plummeted and landlords defaulted on mortgages. That contributed to a wave of failures for banks stuffed with commercial-property loans. More than 425 Texas institutions between 1980 and 1989 failed, including nine of the state's 10 largest banks. Few are predicting a shock near that scale this time. Even if oil prices stay low, the local economy is more diversified than in the 1980s with sectors such as health care and higher education comprising a larger share of the workforce. In addition, new construction represents about 6.3% all the area's total office stock, and there is far less speculative construction done before a tenant is signed up. "Everybody here in Houston is waiting to exhale," said Michael Scheurich, chief executive of general contractor Arch-Con Corp., which currently is building two midsize office projects in the area. Mr. Scheurich said his company has grown to about 80 employees from fewer than 25 in 2011 amid the construction boom. Now he is hoping the local economy will have "a soft landing." Still, cranes abound throughout Houston, thanks to publicly traded real-estate companies, pension funds and other interests like Swedish construction giant Skanska AB, which are funding construction without as much reliance on debt as in the 1980s. Development firm Hines is building a 48-story tower in downtown Houston "on spec," or speculatively without a tenant lined up. In the Woodlands, a growing region north of the city, Exxon Mobil is building a three-million square foot headquarters that is scheduled to replace its current home downtown. Running west from the downtown along Interstate 10, numerous midsize construction projects aimed at the "upstream" companies focused on energy extraction are being built in the so-called Energy Corridor. Analysts say this shows how the sector is highly susceptible to booms and busts because of the long lag time between when buildings are started and when they are delivered, compounded by the tendency of developers and financiers to start projects en masse, late in cycles. Developers are often victims of "herding and groupthink," said Rachel Weber, an urban planning professor at the University of Illinois at Chicago who is writing a book about office overdevelopment in Chicago. "There is a sense that if everybody is moving in the same direction and acting the same way, that you do better to mimic that kind of behavior." Many of those building are bracing for a sting in the short-term. It could be even more painful if oil prices stay low. It "is going to be a soft year--it's hard not to see that," said Mike Mair, an executive vice president in charge of Houston-area development for Skanska. The company is putting the finishing touches on a new 12-story tower in the Energy Corridor that is 62% leased. Construction is under way on a nearly identical building next door for which it doesn't have any tenants. Still, Mr. Mair said he believes in the city's economic strength in the mid- and long-term, giving him confidence to finish work on the second tower. "I'm not afraid of '16 and '17," he said. Of course, higher vacancy rates would mean lower rents, which is good for anyone signing a lease. Rents at top-quality buildings averaged $34.51 a square foot at the end of 2014, up about 15% from early 2012, according to CoStar. But brokers say landlord incentives have grown, and rents typically follow the direction of oil prices, with a lag of one or two quarters. Still, the rents are a bargain compared with other major cities such as New York, where top-quality offices rent for an average $59 a square foot. The city of Houston, for one, could be a beneficiary of lower rents. The government had been planning to build a new police department headquarters at an estimated cost of between $750 million and $1 billion. Late last month, the mayor's office said it was examining the possibility of leasing the building that Exxon Mobil is leaving, which would cost far less than the city's original plan. Write to Eliot Brown at eliot.brown@wsj.com Credit: By Eliot Brown
Subject: Office space; Commercial real estate; Construction; Crude oil prices; Energy industry
Location: United States--US
Company / organization: Name: CoStar Group Inc; NAICS: 511140, 518210; Name: Weatherford International Inc; NAICS: 213112, 333132; Name: International Energy Agency; NAICS: 928120; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Halliburton Co; NAICS: 213112, 237990
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Real Estate
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652833696
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652833696?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
S&P Places Nigeria Ratings on Watch for Downgrade; Nigeria Is the Latest Country That S&P Has Docked for Reasons Related to Oil
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Standard & Poor's Ratings Services put Nigeria's credit ratings on watch for potential downgrade following the fall in oil prices and continued political instability.
Full text: Standard & Poor's Ratings Services put Nigeria's credit ratings on watch for potential downgrade following the fall in oil prices and continued political instability. Nigeria is the latest country that S&P has docked for reasons related to oil. Its double-B-minus rating is three notches below investment-grade territory. In light of the monthslong oil slump, the ratings service has revised its price assumption downward for the period spanning 2015 to 2018. Nigeria is a heavily oil-dependent country, as it relies on oil and gas for about 70% of its fiscal revenues and over 90% of its exports, according to S&P. The ratings agency now expects Nigeria to have an average current-account deficit of 1.8% during from 2015-2017, compared with its previous estimate of a surplus of 3.3%. S&P also cited the impact of raised interest rates, which have devalued the Nigeria naira. Tumbling oil prices has also caused a revision of the proposed budget for 2015, which includes significant cuts in expenditures. Continued political uncertainty is an issue as well, the firm said, as attacks from the militant Boko Haram group continue and the country anticipates a contested general election next month . On Monday, S&P cut its credit ratings on Kazakhstan and Bahrain, among other countries, due to oil fluctuations. It also issued negative outlooks for Saudi Arabia, and Venezuela, indicating possible downgrades. S&P will next update its Nigeria ratings on March 20. Write to Angela Chen at angela.chen@dowjones.com Credit: By Angela Chen
Subject: Credit ratings
Location: Nigeria
Company / organization: Name: Standard & Poors Corp; NAICS: 541519, 511120, 523999, 561450
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652841992
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652841992?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada Central Bank Has Tools if Oil Setback Bites Deeper, Banker Says; Bank's Carolyn Wilkins Draws Link Between Labor Market Gap, Broader Economic Slack
Author: Menon, Nirmala
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
[...]employment growth last year was less than what would be consistent with growth in the economy's potential," she said.
Full text: OTTAWA--The oil-price plunge is a setback for a Canadian economy operating below potential, but the central bank has the right tools to return inflation to its 2% target if needed, a top Canadian central banker said. The Bank of Canada believes there is greater slack in Canada's labor market than indicated by commonly cited measures such as the unemployment rate. That, combined with the potential economic pain from the drop in oil prices, was behind its surprise decision cut rates last month, Senior Deputy Governor Carolyn Wilkins said Tuesday in a speech to the Ottawa Economics Association. The Bank of Canada lowered its key interest rate by a quarter point to 0.75% on Jan. 21. Bank of Canada Governor Stephen Poloz described the surprise rate cut as "insurance" against an expected slowdown in growth and inflation from the drop in the price of oil. Canada is a net oil exporter. Ms. Wilkins's speech focused on labor concerns. She said it was critical to consider the labor market to gauge the degree of economic slack and underlying inflation. The central bank estimates that excess capacity in the labor market was equivalent to a shortfall of about 270,000 jobs last year, and that slack in the labor market was greater than overall slack in the economy. "In fact, employment growth last year was less than what would be consistent with growth in the economy's potential," she said. Ms. Wilkins' speech didn't give any hints about the central bank's next move on rates. Some economists have penciled in another 25 basis-point cut at its next meeting in early March. "We don't want to inadvertently stifle the rebuilding phase of an economy that will need to adjust to a lower price of oil," said Ms. Wilkins, who is second-in-command to Mr. Poloz. CIBC World Markets chief economist Avery Shenfeld said the speech was quite dovish, adding "There's no hint in terms of will we, or won't we, cut again." The already weak Canadian dollar has lost about 3.8% since the January rate cut and dropped modestly after Ms. Wilkins's speech. Rate cuts by the Bank of Canada and its counterparts, including Australia, Denmark and India, mark a growing divergence in monetary policy with the U.S. Federal Reserve, which is expected to start raising interest rates this year as growth there strengthens. Ms. Wilkins said firming growth in the U.S., the destination for some 75% of Canadian exports, and a weaker Canadian dollar will cushion the impact of the oil-price decline and help boost nonenergy exports. A weaker currency makes Canadian exports cheaper in global markets. In a question-and-answer session after the speech, Ms. Wilkins said the central bank was "really happy" to see some recent positive export numbers. She also rejected the notion that the Bank of Canada was relying on manufacturing, a sector that is heavily geared to exports, to do the heavy lifting for the economy, saying that monetary policy "never targets any particular sectors." Canadian policy makers are counting on exports and business investment to take over from debt-ridden consumers and drive economic growth. But energy firms are paring back investments and hiring plans due to the oil price plunge. The Bank of Canada expects capital investment in the oil-and-gas sector to fall by about 30% in 2015, which is "huge" given the importance of investments in this sector for overall growth, Ms. Wilkins said. Don Curren contributed to this article. Write to Nirmala Menon at nirmala.menon@wsj.com Credit: By Nirmala Menon
Subject: Central banks; Canadian dollar; Monetary policy; Speech; Federal Reserve monetary policy
Location: Canada
People: Poloz, Stephen
Company / organization: Name: Bank of Canada; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652841994
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652841994?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Halliburton to Cut 8% of Workforce; Oil-Field Services Company Says Layoffs Aren't Related to Pending Baker Hughes Acquisition
Author: Molinski, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Halliburton Co., the world's second-largest oil-field services company, said Tuesday it plans to shed up to 8% of its global workforce as low oil prices force energy companies to rein in spending .
Full text: Halliburton Co., the world's second-largest oil-field services company, said Tuesday it plans to shed up to 8% of its global workforce as low oil prices force energy companies to rein in spending . The job cuts could amount to 6,400 layoffs; the company says it has more than 80,000 employees around the world. "We are faced with the difficult reality that reductions are necessary to work through this challenging market environment," the company said in an emailed statement. Halliburton said the job cuts aren't related to its pending acquisition of oil field rival Baker Hughes Inc., which was announced late last year. In its statement Tuesday, the company didn't specify where in the world the layoffs would take place but said they would affect its entire line of business. In December, the company said it would cut 1,000 jobs outside the U.S. In response to questions from The Wall Street Journal earlier this week, Halliburton said U.S. employees being laid off receive outplacement benefits; services for workers outside the U.S. vary by country. Other top oil-field services firms have also announced job cuts. Schlumberger Ltd., the biggest oil-field services company, said last month it is laying off 9,000 employees , or 7% of its global workforce. Last week, Weatherford International said it is reducing head count by 8,000 , nearly 15% of its total workforce. Oil prices have collapsed since June, falling by more than 50%. A barrel of crude was recently trading at around $51 . Write to Dan Molinski at Dan.Molinski@wsj.com Credit: By Dan Molinski
Subject: Layoffs; Acquisitions & mergers; Corporate reorganization; Workforce
Location: United States--US
Company / organization: Name: Schlumberger Ltd; NAICS: 541512, 334419, 334513, 511210, 213111, 213112; Name: Weatherford International Inc; NAICS: 213112, 333132; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652852786
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652852786?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pioneer Natural Resources Cuts Spending; Company to Reduce Drilling Amid Lower Oil Prices
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]10 Feb 2015: n/a.
Abstract:
Pioneer Natural Resources Co. is shutting down vertical drilling in the Spraberry/Wolfcamp parts of the Permian Basin in Texas and cutting roughly in half drilling there and in the Eagle Ford Shale of South Texas, given lower oil prices and lower margins.
Full text: Pioneer Natural Resources Co. is shutting down vertical drilling in the Spraberry/Wolfcamp parts of the Permian Basin in Texas and cutting roughly in half drilling there and in the Eagle Ford Shale of South Texas, given lower oil prices and lower margins. The Irving, Texas, company said it would also cut a series of infrastructure projects, reducing its overall capital spending for continuing operations by about $1.85 billion, or 45%, from 2014. The announcement comes as the company swung to a profit in the fourth quarter, as revenue surged 75% on strong production growth. Last month, Pioneer warned severe winter weather in West Texas had significantly affected production and drilling operations in the Spraberry/Wolfcamp area, its key business. Pioneer said last fall it planned to sell its Eagle Ford Shale Midstream business, but keep its Eagle Ford Shale upstream assets, to focus on the Spraberry/Wolfcamp operations. Last summer, Pioneer received special permission from the U.S. government to export minimally processed oil. In the second half of the year, Pioneer exported 10,000 barrels of oil equivalent a day of Eagle Ford Shale ultralight oil, known as processed condensate, improving pricing compared with domestic sales. Pioneer said it has already committed to export about 20,000 barrels a day this year under two contracts. For the most recent period, Pioneer reported a profit of $431 million, or $2.90 a share, compared with a year-earlier loss of $1.37 billion, or $6.30 a share. Revenue surged 75% to $1.67 billion, a figure that included $364 million after tax of gains from its derivative contracts, used to hedge risk. Excluding derivative mark-to-market gains and other items, profit was 80 cents a share. Analysts surveyed by Thomson Reuters expected 92 cents a share $1 billion in revenue. Average daily sales volumes rose 28%, while average realized prices from continuing operations fell 21% to $43.48 barrels of oil equivalent. Shares edged down 0.74% to $151.90 in recent after-hours trading. Through Tuesday's close, the company's stock had fallen 18% over the past 12 months. Write to Maria Armental at maria.armental@wsj.com Corrections & Amplifications Pioneer Natural Resources Co. exported 10,000 barrels of oil equivalent a day of Eagle Ford Shale ultralight oil in the second half of 2014. An earlier version of this article misstated the number of barrels. Credit: By Maria Armental
Subject: Oil reserves; Petroleum industry; Corporate profits; Exports
Location: Permian Basin West Texas
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Pioneer Natural Resources Co; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 10, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652867066
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652867066?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Asian Shares: Australian Stocks Lower on Oil Volatility; Stocks in Australia Under Pressure from Volatile Oil Market
Author: Deng, Chao; Inman, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
[...]the Shanghai Composite Index added 0.5% to 3157.70, on expectations that the growing risk of a deflationary spiral in China would encourage the country's central bank to ease monetary policy further.
Full text: Stocks in Australia were under pressure from a volatile oil market Wednesday, while China shares finished mixed as investors weighed hopes for further monetary easing versus worries over Greece's debt situation . Australia's S&P/ASX 200 closed 0.5% lower at 5769.1, after oil prices tumbled overnight on worries that swelling global oil inventories would keep prices subdued over the next few months. U.S. oil prices rose 0.7% to $50.40 a barrel in Asia trade, after sliding 5.4% on Tuesday. Late Tuesday, the American Petroleum Institute reported a smaller-than-expected 1.6 million barrel build in crude stocks in the U.S. tied to a drop in imports for the week ended Feb. 6, according to Citi. In Australia, mining company BHP Billiton, also a large oil producer, lost 1.3% to A$30.97. Oil Search fell 2.6% to A$8.01. Woodside Petroleum slid 3.0% to A$34.16 and Santos was down 3.3% at A$7.71. The U.S. Energy Department will release its definitive stockpile data later Wednesday. Elsewhere, the Hang Seng was down 0.9% at 24315.02, with gains capped by the continuing debacle between Greece and its international creditors. While investors say they think Greece's problems are contained, the standoff is pushing the country closer to default and leaving the eurozone. But the Shanghai Composite Index added 0.5% to 3157.70, on expectations that the growing risk of a deflationary spiral in China would encourage the country's central bank to ease monetary policy further. Haitong International expects three or four cuts to the reserve requirement ratio this year and one or two interest-rate cuts. The People's Bank of China late Tuesday released its fourth-quarter monetary-policy report, saying that it would continue with prudent monetary policy and create what it described as "neutral and appropriate monetary conditions." China Railway Group was in focus, with the stock up 2.2%, after the company said it would raise up to 12 billion yuan via a private placement. Fast-food chain Domino's Pizza Enterprises stood out as Wednesday's best-performing stock, skyrocketing 21% to A$33.00, after the company posted a 67% jump in first-half profit and upgraded its full-year earnings guidance. Markets in Japan are closed for a national holiday. Malaysian stocks were down 0.7% at 1798.95 and the Philippines was off 0.5% at 7687.42. --Vera Sprothen contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng And Daniel Inman
Subject: Monetary policy; Petroleum industry; Investments; Stocks
Location: Greece China United States--US Asia Australia
Company / organization: Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: Woodside Petroleum Ltd; NAICS: 211111; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652931480
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652931480?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Drilling Slows as Crude Price Drops; Companies Drilled 28% Fewer Wells in January Than They Did Last June
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
The U.S. Energy Information Administration found that oil production is increasing at a slower rate in four big producing regions of the U.S.; the agency estimates that U.S. producers pumped about 9.2 million barrels a day in January.
Full text: The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday. Companies drilled 28% fewer oil wells in January across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University's Baker Institute for Public Policy. But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm. Energy mavens around the world are watching for any sign that American oil companies are pumping less crude as a glut of petroleum has sent global prices plunging by about 50% since June. Rising U.S. production from shale fields has been a big contributor to the glut, along with tepid demand for oil in economies around the world. The new data suggest that U.S. shale producers are responding faster to the drop in prices than energy companies have in the past, which could translate into lower production and hasten a recovery in crude prices. Shale wells roar into life and then decline more quickly than conventional wells. "You've got this nimble new mode of production that can enter the market and exit the market quickly," said Jim Krane, an energy fellow at Rice University and lead author of the study. In contrast to previous oil busts, he adds, "now you have a supplier that is price-sensitive and can curtail supply quickly." The report is based on new onshore wells drilled in most states in the continental U.S., provided by DrillingInfo, and on drilling rigs tracked by Baker Hughes Inc., an oil-field services company. The DrillingInfo data include wells that have been drilled but aren't necessarily pumping oil yet; the firm estimates how much oil the wells can tap based on the average peak production of similar wells drilled nearby. The findings echo similar points made by two analyses earlier this week. The U.S. Energy Information Administration found that oil production is increasing at a slower rate in four big producing regions of the U.S.; the agency estimates that U.S. producers pumped about 9.2 million barrels a day in January. The International Energy Agency similarly projected slower growth in U.S. production as a result of lower prices. The U.S. oil price fell $2.84, to $50.02 a barrel on Tuesday, but remains 12.5% higher than its lowest point this year. The retreat in drilling isn't uniform across the U.S., and it is still difficult to determine where the cutbacks will be the harshest. In some drilling hotbeds, like the Eagle Ford Shale of South Texas, the number of new oil wells actually increased during the months when oil prices fell most steeply, from November to January, according to the Rice study. The Permian Basin, in West Texas and New Mexico, posted the sharpest decline in new oil wells, adding 15.6% less production capacity in January than in June. Most of the decline appeared to come from conventional, vertical wells, and not the ones that bore horizontally through the rock and deliver the biggest volumes of oil and gas. The Bakken formation, which has made North Dakota the second-largest oil-producing state after Texas, also experienced a downturn in new wells. But both the Bakken and the Permian are often impacted by severe winter weather that causes a slowdown. DrillingInfo's data goes back to March 2014, not long enough to compare current drilling levels with a year ago. Write to Daniel Gilbert at daniel.gilbert@wsj.com Credit: By Daniel Gilbert
Subject: Petroleum industry; Oil wells; Drilling; Production capacity; Crude oil prices; Petroleum production; Energy industry
Location: United States--US
Company / organization: Name: Rice University; NAICS: 611310; Name: International Energy Agency; NAICS: 928120; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: James A Baker III Institute for Public Policy; NAICS: 541720
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652955281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/ docview/1652955281?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop as U.S. Supplies Rise to Fresh Record; U.S. Benchmark Crude Prices Fall Below $50 a Barrel
Author: Fr iedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
Signs of reduced activity in the U.S. shale-oil industry, coupled with spending cuts by large oil companies like Royal Dutch Shell PLC and BP PLC, have buoyed prices in recent days.
Full text: Oil tumbled for the second day in a row, with the U.S. benchmark slipping back below $50 a barrel, after a government report showed U.S. crude stockpiles reached a new record high. Oil prices have shown signs of stability in the past two weeks after plunging to nearly six-year lows last month amid a global supply glut. News of oil companies cutting back on investment and a reduction in drilling activity are setting the stage for a slowdown in oil-output growth, especially in the U.S., in the second half of the year, analysts and market experts say. Optimism that the glut could ease has supported prices. But weekly data released by the Energy Information Administration on Wednesday showed rising production in the U.S. continues to swamp the oil market, at least for now. "These supply gluts are only going to exacerbate," said Matt Smith, commodity analyst at Schneider Electric SA, an energy-consulting firm. "It's no surprise we're headed back below $50 again." The price of U.S. benchmark crude oil fell 2.4%, or $1.18, to $48.84 a barrel, a one-week low, on the New York Mercantile Exchange. Although the price is up 9.9% from its late-January nadir, it's down 54% from highs hit in June. Brent, the global benchmark, settled down 3.1%, or $1.77, at $54.66 a barrel on ICE Future Europe. U.S. crude stockpiles rose by a slightly bigger-than-expected 4.9 million barrels to 417.9 million barrels in the week ended Feb. 6, according to the EIA. The amount of oil stored by refiners, traders and other companies stands at the highest level in about 80 years, according to EIA data. Many analysts expect supplies to continue rising in the coming weeks as refineries process less crude. Many plants shut down units in the spring to perform seasonal repairs ahead of the summer-driving season, when demand for fuels such as gasoline tends to pick up. Signs of reduced activity in the U.S. shale-oil industry, coupled with spending cuts by large oil companies like Royal Dutch Shell PLC and BP PLC, have buoyed prices in recent days. On Feb. 6, the number of oil rigs in use in the U.S. fell to a three-year low of 1,140. It was the ninth straight week of declines and a sign to some investors that production will slow in the coming months. "It's an interesting push and pull...between the rig counts that are coming off extremely fast and the inventories that keep building," said Matt Sallee, portfolio manager at Tortoise Capital Advisors, which oversees about $16.9 billion in energy-related investments. Mr. Sallee expects U.S. oil-production growth to level off before midyear. Domestic oil production rose by 49,000 barrels a day to 9.2 million barrels a day in the week, the EIA said. In weekly data going back to 1983, that's an all-time high. Average monthly data last showed production at 9.2 million barrels a day in October 1973, according to the EIA. Gasoline stockpiles rose by 2 million barrels, more than the 200,000-barrel gain that analysts had expected. Gasoline futures fell 0.6%, or 0.91 cent, to $1.5432 a gallon on the Nymex. Stocks of distillates, including heating oil and diesel fuel, fell by 3.3 million barrels. Analysts had expected a 1.3-million-barrel decline. Diesel futures dropped 1% to $1.8141 a gallon on the Nymex. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum industry; Prices; Petroleum production
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Schneider Electric SA; NAICS: 335311; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1652974763
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1652974763?acc ountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Bust Threatens Houston Boom
Author: Brown, Eliot
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Feb 2015: C.1.
Abstract:
[...]just as the wave of office-space supply approaches, energy companies, including Halliburton Co., Baker Hughes Inc., Weatherford International and BP PLC, have collectively announced that more than 23,000 jobs would be cut, with many of them expected to be in Houston.
Full text: HOUSTON -- The jagged skyline of this oil-rich city is poised to be the latest victim of falling crude prices. As the energy sector boomed in recent years, developers flocked to Houston, so much so that one-sixth of all the office space under construction in the entire U.S. is in the metropolitan area of the Texas city. But now, the need for more offices is drying up, thanks to a drop in oil prices that has spun energy companies from an outlook of optimism and growth to anxiety and cutbacks. Oil prices have fallen by more than 50% since June. Office-space demand is "going to basically stop," said Walter Page, director of office research at property data firm CoStar Group Inc. "It hurts a lot more when you have a lot of construction." By the end of 2014, construction had started on about 80 buildings with about 18 million square feet of office space in the greater Houston area, according to CoStar. Many of the buildings were planned or started when oil was above $100 a barrel. On Tuesday oil futures traded around $50. The amount under construction is equal to Kansas City, Mo.'s entire downtown office market and is 16% of all U.S. office development under way. The rush of building has created thousands of jobs -- not only at building sites, but also at window manufacturers, concrete companies and restaurants that feed the workers. But just as the wave of office-space supply approaches, energy companies, including Halliburton Co., Baker Hughes Inc., Weatherford International and BP PLC, have collectively announced that more than 23,000 jobs would be cut, with many of them expected to be in Houston. Fewer workers, of course, means less need for office space. Employers have rushed to sublease space in recent months, with 5.2 million square feet of space on the market as of last month, up about 1 million square feet from mid-2014, according to brokerage firm Savills Studley. BP, for example, is trying to sublet 240,000 square feet of space at its campus in the Westlake neighborhood, which represents about 11% of BP's space at the campus, according to CoStar. A BP spokesman said the company is "consolidating" its footprint. Conditions could improve if oil prices rise. The International Energy Agency on Tuesday said oil companies' recent cutbacks in production will likely slow the growth of U.S. oil output, which in turn would lead to a rebound in prices. But the current building boom is Houston's biggest since the 1980s, when an oil bust, coupled with a rash of empty skyscrapers, made Houston a national symbol of overbuilding. Then, armed with debt from a banking sector eager to lend, developers brought a wave of building to Houston, in some years increasing the office stock by well over 10%. Vacancy rates shot up past 30% from single digits, property values plummeted and landlords defaulted on mortgages. Few are predicting a shock near that scale this time. Even if oil prices stay low, the local economy is more diversified than in the 1980s with sectors such as health care and higher education comprising a larger share of the workforce. In addition, new construction represents about 6.3% all the area's total office stock, and there is far less speculative construction done before a tenant is signed. "Everybody here in Houston is waiting to exhale," said Michael Scheurich, chief executive of general contractor Arch-Con Corp., which currently is building two midsize office projects in the area. Mr. Scheurich said his company has grown to about 80 employees from fewer than 25 in 2011 amid the construction boom. Now he is hoping the local economy will have "a soft landing." Still, cranes abound in Houston, thanks to publicly traded real-estate companies, pension funds and other interests like Swedish construction giant Skanska AB, which are funding construction without as much reliance on debt as in the 1980s. Development firm Hines is building a 48-story tower in downtown Houston "on spec," or speculatively without a tenant lined up. In the Woodlands, a growing region north of the city, Exxon Mobil is building a three-million square foot headquarters that is scheduled to replace its current home downtown. Running west from the downtown along Interstate 10, numerous midsize construction projects aimed at the "upstream" companies focused on energy extraction are being built in the so-called Energy Corridor. Analysts say this shows how the sector is highly susceptible to booms and busts because of the long lag time between when buildings are started and when they are delivered, compounded by the tendency of developers and financiers to start projects en masse, late in cycles. Developers are often victims of "herding and groupthink," said Rachel Weber, an urban planning professor at the University of Illinois at Chicago who is writing a book about office overdevelopment in Chicago. Many of those building are bracing for a sting in the short-term. It could be even more painful if oil prices stay low. It "is going to be a soft year -- it's hard not to see that," said Mike Mair, an executive vice president in charge of Houston-area development for Skanska. The company is putting the finishing touches on a new 12-story tower in the Energy Corridor that is 62% leased. Construction is under way on a nearly identical building next door for which it doesn't have any tenants. Still, Mr. Mair said he believes in the city's economic strength in the mid- and long-term, giving him confidence to finish work on the second tower. "I'm not afraid of '16 and '17," he said. Credit: By Eliot Brown
Subject: Commercial real estate; Office space; Petroleum industry; Crude oil prices
Location: Houston Texas
Company / organization: Name: CoStar Group Inc; NAICS: 511140, 518210; Name: BP PLC; NAICS: 211111, 324110, 447110
Classification: 9190: United States; 8360: Real estate; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 11, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1653025453
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1653025453?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Selloff Hits Private-Equity's KKR
Author: Dezember, Ryan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Feb 2015: C.2.
Abstract:
KKR & Co., one of private equity's biggest energy investors, reported a narrow fourth-quarter loss Tuesday as lower oil prices dented the value of some of its holdings.
Full text: KKR & Co., one of private equity's biggest energy investors, reported a narrow fourth-quarter loss Tuesday as lower oil prices dented the value of some of its holdings. The firm wrote down the value of energy investments made with its money by about $225 million, or about 24% below cost, which countered gains on two of the firm's biggest buyouts, payment processor First Data Corp. and European pharmacy chain Alliance Boots GmbH. KKR is unusual among large private-equity firms in that it invests its own money alongside and independently of the cash it invests for clients such as pension funds and endowments. The firm currently has about $11 billion of its own money invested. KKR became the latest private-equity firm to disclose that plummeting oil and natural-gas prices took a toll on the value of its holdings. Rivals Blackstone Group LP and Apollo Global Management LLC earlier reported fourth-quarter results that fell from a year earlier. Apollo's profit decline was more severe and results missed analysts' expectations, while Blackstone's profit beat forecasts. Carlyle Group LP, which last month said its energy funds lost value during the quarter, is scheduled to report results Wednesday. Echoing executives at both Blackstone and Apollo, KKR's leaders predicted opportunities to snap up energy assets on the cheap. "Our teams are very busy, working with [energy] companies and management teams that need capital and a thought partner," said Scott Nuttall, head of KKR's global capital and asset-management group. "The opportunity is immense." KKR reported a fourth-quarter loss of $583,000, down from a profit of $277.9 million, or 96 cents a share, in the same period a year earlier. Its fourth-quarter economic net income was $86.6 million, or 5 cents a share after taxes, down from $789.6 million, or $1.08 a share, a year earlier. The result missed Wall Street's estimates for the profitability measure, which includes unrealized gains as well as cash earnings. Analysts polled by Thomson Reuters anticipated economic net income of 45 cents a share. The results sent KKR's shares 2.8%lower to close at $24.27 Tuesday. The stock is up 4.6% on the year after declining 5.9% in 2014. The New York firm's private-equity portfolio appreciated 2.7% during the fourth-quarter and 12.8% in 2014. Much of the damage done by falling oil prices came before the fourth quarter, as the firm had by the start of October already written off much of the value of its stake in Samson Resources Corp., a Tulsa, Okla., oil-and-gas producer that KKR and other investors acquired for $7.2 billion in a 2011 buyout. Mr. Nuttall said KKR currently values its investment in Samson at 5 cents on the dollar. Another of KKR's megadeals turned the corner during the quarter, helping to offset some of the damage from its energy bets. KKR marked its investment in First Data up about 12% during the quarter, pushing it above cost for the first time since shortly after the $26 billion buyout in 2007. KKR also reaped cash profits from sales of its stakes in Wild Flavors GmbH, a food maker Archer Daniels Midland Co. bought for about $3 billion, and Versatel GmbH, the owner of a German fiber-optic network. While the firm notched big unrealized losses in its energy portfolio, those investments, including stakes in producing wells and drilling pacts, generated $90 million of cash during the fourth quarter. The sales and revenue from energy investments helped generate cash the firm is paying out to shareholders. KKR said it would pay a dividend of 35 cents a share for the quarter, a decrease from 48 cents a year ago. That brings the total KKR paid out in 2014 to $1.90, the firm's highest ever yearly total, eclipsing the record of $1.40 set in 2013. KKR also addressed rebates the firm made to fund investors in 2014 in response to a Securities and Exchange Commission exam. The rebates, previously reported in The Wall Street Journal, amounted to about $8 million, said Craig Larson, head of investor relations. Mr. Larson said the majority of the refunded amount related to how expenses were allocated between KKR's flagship private-equity funds and so-called co-investments made in deals alongside those funds. He said dialogue with the SEC is ongoing. "We can't comment now on what additional developments may occur on this in the future. But we look at our reserve each quarter and as of year-end believe we're adequately reserved for our legal risks," he said. Credit: By Ryan Dezember
Subject: Financial performance; Investors; Private equity; Company reports
Location: United States--US
Company / organization: Name: Kohlberg Kravis Roberts & Co LP; NAICS: 523920
Classification: 9190: United States; 3100: Capital & debt management
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.2
Publication year: 2015
Publication date: Feb 11, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1653025527
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1653025527?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Tullow Oil Suspends Dividend Amid Oil Price Fall; Africa-Focused Explorer Swings to Full-Year Loss
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
Unlike the major oil companies BP PLC and Royal Dutch Shell PLC, explorers don't have other parts of their business to fall back on when oil prices are low, such as refining and marketing.
Full text: LONDON--Tullow Oil PLC on Wednesday suspended its dividend after swinging to a loss for 2014 as the Africa-focused oil explorer was hit by the falling oil price. The loss was largely the result of impairments totaling $2.7 billion before tax, mostly stemming from the decline in the oil price. Tullow warned of the charges last month. "2014 was a difficult year for our industry and a challenging one for Tullow as our results today demonstrate," Chief Executive Aidan Heavey said in a statement. The oil price has more than halved in the past six months, hitting the exploration and production sector hard. Unlike the major oil companies BP PLC and Royal Dutch Shell PLC, explorers don't have other parts of their business to fall back on when oil prices are low, such as refining and marketing. Tullow reported underlying earnings, or loss from continuing operations before tax, of $2.05 billion for last year, below analyst expectations of $1.91 billion. The company reported a pretax profit of $313 million in 2013. Tullow reported a net loss of $1.55 billion in 2014, compared with a net profit of $169 million in 2013. Full-year revenues fell 16% to $2.21 billion, compared with $2.65 billion in 2013, hurt by the oil price decline in the second half of the year and gas-asset sales in Europe and Asia. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Net losses; Petroleum industry; Financial performance
Location: Africa
Company / organization: Name: Tullow Oil PLC; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1653028650
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1653028650?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Corporate News: Oil Drilling Slowdown Paces Crude Price Drop
Author: Gilbert, Daniel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]11 Feb 2015: B.3.
Abstract:
The U.S. Energy Information Administration found that oil production is increasing at a slower rate in four big producing regions of the U.S.; the agency estimates that U.S. producers pumped about 9.2 million barrels a day in January.
Full text: The U.S. oil boom is slowing down as drillers cut back in response to lower crude prices, according to new data set to be released on Wednesday. Companies drilled 28% fewer oil wells in January across the continental U.S. than they did last June, before oil prices started falling from more than $100 a barrel to about $50 today, according to the study by Rice University's Baker Institute for Public Policy. But the amount of new crude they can pump from wells drilled in January totals an estimated 515,000 barrels a day, only 8.5% less than from the wells drilled in June, according to data provided for the study by DrillingInfo, an analytics firm. Energy mavens around the world are watching for any sign that American oil companies are pumping less crude as a glut of petroleum has sent global prices plunging by about 50% since June. Rising U.S. production from shale fields has been a big contributor to the glut, along with tepid demand for oil in economies around the world. The new data suggest that U.S. shale producers are responding faster to the drop in prices than energy companies have in the past, which could translate into lower production and hasten a recovery in crude prices. Shale wells roar into life and then decline more quickly than conventional wells. "You've got this nimble new mode of production that can enter the market and exit the market quickly," said Jim Krane, an energy fellow at Rice University and lead author of the study. In contrast to previous oil busts, he adds, "now you have a supplier that is price-sensitive and can curtail supply quickly." The report is based on new onshore wells drilled in most states in the continental U.S., provided by DrillingInfo, and on drilling rigs tracked by Baker Hughes Inc., an oil-field services company. The DrillingInfo data include wells that have been drilled but aren't necessarily pumping oil yet; the firm estimates how much oil the wells can tap based on the average peak production of similar wells drilled nearby. The findings echo similar points made by two analyses earlier this week. The U.S. Energy Information Administration found that oil production is increasing at a slower rate in four big producing regions of the U.S.; the agency estimates that U.S. producers pumped about 9.2 million barrels a day in January. The International Energy Agency similarly projected slower growth in U.S. production as a result of lower prices. The U.S. oil price fell $2.84, to $50.02 a barrel on Tuesday, but remains 12.5% higher than its lowest point this year. The retreat in drilling isn't uniform across the U.S., and it is still difficult to determine where the cutbacks will be the harshest. In some drilling hotbeds, like the Eagle Ford Shale of South Texas, the number of new oil wells actually increased during the months when oil prices fell most steeply, from November to January, according to the Rice study. The Permian Basin, in West Texas and New Mexico, posted the sharpest decline in new oil wells, adding 15.6% less production capacity in January than in June. Most of the decline appeared to come from conventional, vertical wells, and not the ones that bore horizontally through the rock and deliver the biggest volumes of oil and gas. The Bakken formation, which has made North Dakota the second-largest oil-producing state after Texas, also experienced a downturn in new wells. But both the Bakken and the Permian are often impacted by severe winter weather that causes a slowdown. Credit: By Daniel Gilbert
Subject: Production capacity; Crude oil; Petroleum production
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: Drilling Info Inc; NAICS: 511140, 511210
Classification: 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Feb 11, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1653077005
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1653077005?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
As Oil Price Drops, Texas Lenders Watch for Fallout; Small Banks Brace for Hit to Local Businesses of Any Cutback in Crude Production
Author: Sidel, Robin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
Mr. Ruckman's community bank doesn't lend much to the energy companies whose drilling sites dot the local landscape, tapping the Eagle Ford Shale oil deposits of South Texas--but he still has reason to be concerned about the recent slump in oil prices.
Full text: KARNES CITY, Texas--Hugh B. "Trip" Ruckman III's family ties to the Karnes County National Bank date to 1901 when it started making loans to cattle ranchers and farmers in this rural community in South Texas. The mobile-home camps and sandstone-colored motels along Highway 181, where some rooms regularly cost more than high-rise hotel rooms in Houston and San Antonio, are newer additions to the local economy. So are the 18-wheelers that race down the streets and the mud-splattered pickup trucks that fill the Dairy Queen parking lot at lunchtime, their sides dotted with energy-company logos. Mr. Ruckman's community bank doesn't lend much to the energy companies whose drilling sites dot the local landscape, tapping the Eagle Ford Shale oil deposits of South Texas--but he still has reason to be concerned about the recent slump in oil prices. Some 10% of Karnes County National Bank's loans are held by small hotels, many of whose prospects are tied to the energy boom. For now, he says, occupancy rates remain high and there are few indications that oil-field workers are packing up and moving out. "I hope I don't eat my words," said Mr. Ruckman, 70 years old, who is president of the bank. Oil and natural gas are old hat in Texas, of course, but the shale revolution brought new prosperity to parts of the state--and the country--that haven't experienced an energy bust in all its gory details. Oil prices have dropped by roughly half since last summer, pressured by a glut that is outstripping demand. That has caused an unfamiliar anxiety for many bankers with loans tied to the energy boom, even if indirectly. The drilling boom that lasted most of the past decade was financed largely by private-equity firms and bond deals--not the local and regional banks that typically provided money to independent exploration firms in generations past. Yet analysts say a sustained price drop creates vulnerability for small and midsize lenders whose customers provide a range of ancillary services, from the carwashes that scrub the trucks to the hotels that house the workers. The impact of the energy swoon on those businesses is in many ways more difficult to predict. So far, many energy bankers say, the mood is cautiously optimistic that a catastrophe isn't looming. "Obviously, it's not a bed of roses, but it's not as bad as people think," said Randy Gartz, a longtime energy banker at Mutual of Omaha Bank in Houston. Mr. Gartz is among the veteran bankers with acute memories of the late 1980s, when about 700 banks and thrifts failed in Texas after oil prices dropped more than 50%. He and his partner, Mike Turner, say they are making more frequent calls to their customers in the oil-field-services business to check on the status of their contracts and get updated business projections. Bankers already have started warning customers that credit lines may be reduced in coming months, especially if prices slide further. And they are lowering their own internal projections for oil prices to see how their portfolios will perform in a worst-case scenario. At Atwood Oceanics Inc., a Houston-based company that has delayed delivery of two rigs because of the price slide, the firm's longtime bankers recently called on Mark Mey, the company's chief financial officer, when they were in town on an unrelated matter. Over sushi at a Houston restaurant, they peppered Mr. Mey with questions about the industry and his competitors. "They were seeking intelligence," said Mr. Mey of the five bankers, whom he declined to identify other than saying they work for a European bank. At Cadence Bank in Houston, clients that bankers used to call twice a year are hearing from the bank every six weeks. "Clients know that credit lines are coming down, but they want to know by how much," said Paul Murphy, chairman of the regional bank, which has more than more than $7 billion in assets. Mr. Murphy and his energy bankers say they are keeping close tabs on six or seven clients that could run into trouble. "We recognize that risk is elevated, but we're not panicked," Mr. Murphy said. Regulators also are paying attention. The Office of the Comptroller of the Currency, which regulates the largest U.S. banks and about 1,400 smaller financial institutions, conducted two reviews of banks' exposure to energy prices in 2014 and has zeroed in on about 10 with significant exposure to the oil-and-gas sector. At the same time, the Texas Department of Banking is monitoring the state's 15 banks that have assets below $1 billion and which are believed to be heavily focused on the energy industry. The department, which oversees 273 banks, so far has focused on three for closer scrutiny. Charles Cooper, commissioner of the Texas regulatory agency, said in an interview that his office is "not pushing the panic button by any means." In Karnes County, many residents have collected royalty checks that reached into six and seven figures, helping Karnes County National's deposits explode to $351 million from $80 million at the start of 2010. "They bought new cars, fixed their fences, maybe redid the kitchen and then brought the rest of the money to the bank," Mr. Ruckman, the bank president said. Even Karnes County National gets royalty checks, amounting to several thousand dollars a month, because two branches sit on top of the Eagle Ford Shale. Houston developer Bob Keener and his partners borrowed some money from Karnes County National Bank to build a 48-room hotel, the Kenedy Lodge, in March 2013 just as production was exploding. After reaching as high as $169 a night, prices and occupancy levels are down somewhat lately, Mr. Keener said. He isn't worried about having trouble paying back his loan, saying "everything is fine as far as that goes." He declined to say how much he borrowed but said about 40% of the loan remains outstanding. His banker, Mr. Ruckman, is hopeful that everything stays fine. The bank's hotel loans are "gold-plated," he said, but "as we go forward, we're keeping a real close eye on them." Ryan Tracy contributed to this article. Write to Robin Sidel at robin.sidel@wsj.com Credit: By Robin Sidel
Subject: Hotels & motels; Banking; Prices; Lines of credit; Energy industry
Location: Texas
Company / organization: Name: Dairy Queen; NAICS: 533110; Name: Mutual of Omaha Bank; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654150123
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654150123?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Pioneer Blazes a Subdued Oil Trail; Company's Projections Hit Its Stock, But Investors Are Missing the Bigger Message
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]11 Feb 2015: n/a.
Abstract:
With oil prices, despite the recent rally, down 50% in six months, Pioneer shouldn't keep its foot to the floor. [...]the underlying numbers tell a more nuanced story.
Full text: Faced with a crash, Pioneer Natural Resources has switched on cruise control. In doing so, it may be setting a new speed limit for the oil industry. Exploration and production companies are valued chiefly for growth. So Pioneer's fourth-quarter results and guidance for 2015, discussed on an investor call Wednesday, didn't sit well with investors. Output was just shy of expectations. And Pioneer, which is cutting spending, expects output to stay flat this year. The stock duly fell. The market's reaction is obtuse. With oil prices, despite the recent rally, down 50% in six months, Pioneer shouldn't keep its foot to the floor. Moreover, the underlying numbers tell a more nuanced story. Production guidance for 2015, while flat on the fourth quarter, would still represent a 10% increase on last year's overall output. And oil production, as opposed to natural gas, actually beat consensus estimates in the fourth quarter; the company expects it to rise 20% or more in 2015, year over year. All this is to be delivered despite Pioneer nearly halving capital expenditures. To get there, Pioneer is cutting rigs, but focusing remaining efforts on its most prolific resources, such as in Texas' Wolfcamp shale basin, and completing wells drilled last year. The company also targets a 20% reduction in costs compared with 2014 and said it was halfway there already. That should worry investors in oil-services stocks, up 6% this month on rising crude prices. The fees service companies charge plainly are still in the cross hairs of finance chiefs. But Pioneer's bigger message is that oil prices, even when they recover, have shifted down a gear. The company emphasized that if oil recovers sustainably this year, it will bring rigs back on and raise output further. This demonstrates how shale drilling's compressed time scale, relative to, say, offshore fields, is changing oil-market dynamics. It used to be that when oil prices dropped, the market looked to producers like Saudi Arabia to cut output to support prices, and vice versa when prices spiked. Now, it is E&P firms that can rapidly accelerate or tap the brakes. The implication is that even if, as many expect, oil prices recover meaningfully later in 2015, this will itself cap the rally as E&P companies take advantage by hedging cash flows at higher prices and raising output. Energy Department data, out Wednesday, showed oil output still rising despite rig counts tumbling. Pioneer is pointing the way to a new, and subdued, normal for oil prices. Write to Liam Denning at liam.denning@wsj.com Credit: By Liam Denning
Subject: Petroleum industry; Investments; Petroleum production
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 11, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654252564
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654252564?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Rises on Weak Dollar, Warnings From Royal Dutch Shell; Oil Gains Limited by Record-High U.S. Inventories
Author: Puko, Timothy; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
Despite a forecast of stronger crude prices in the second half of the year "the almost certain global inventory build over the remaining part of the first half of this year is likely to lead to a downward crude price correction in the short term," BNP Paribas said in a report.
Full text: Oil prices rose Thursday on several bullish factors, including a weak dollar, cold weather, a contract expiration and warnings from one of the world's biggest oil companies. Front-month West Texas Intermediate, the U.S. benchmark, settled up $2.37, or 4.9%, at $51.21 a barrel on The New York Mercantile Exchange. The front-month March contract for Brent crude settled up $2.39 cents, or 4.4%, to $57.05 a barrel on London's ICE Futures exchange. Traders are looking to book gains before the expiration of the Brent March contract on Thursday. Analysts also pointed to weakness in the U.S. dollar, which is supportive of dollar-denominated commodities such as oil. A severe cold snap and rising demand for heating fuel also pushed diesel to an eight-week high and its largest dollar gain since October 2012. That raises expectations for oil demand at a time when some investors are getting more nervous about ongoing refinery strikes, said Andrew Lebow, a broker at investment bank Jefferies. Royal Dutch Shell PLC Chief Executive Ben van Beurden said oil demand will outpace supply growth this year. In excerpted, prepared remarks released by Shell on Thursday, he warned of a rapid recovery in oil prices in the years to come if production projects get canceled. It isn't entirely clear which factors pushed prices up so far Thursday, said Peter Donovan, broker for Liquidity Energy in New York. But so many traders have bet on oil prices falling, large numbers of them can jump at once to unwind those bets by buying futures to cover the position, feeding a rally. "There are several generic reasons that are all leading to some short-covering," Mr. Donovan said. "No one wants to be sitting here holding the bag if this thing runs up." Looking at the longer term fundamentals, however, the picture hasn't changed much, analysts say. Genscape estimated a 3 million barrel addition to stockpiles at the storage hub Cushing, Okla., where the Nymex contract is priced, for the week ended Dec. 26, people familiar with the report said. That was a record. Traders did briefly pare gains on the news, but the market rose again throughout the afternoon. The Genscape data is a widely watched precursor to the U.S. Energy Information Administration's own weekly update gathered from producers and storage operators, which is published every Wednesday. U.S. crude stockpiles rose more than expected last week, reaching another record high, EIA said. The EIA also reported U.S. oil production rose by 49,000 barrels a day to 9.2 million last week, an all-time high in weekly data going back to 1983. Despite a forecast of stronger crude prices in the second half of the year "the almost certain global inventory build over the remaining part of the first half of this year is likely to lead to a downward crude price correction in the short term," BNP Paribas said in a report. Production growth will still remain substantial, increasing by 2.44 million barrels a day in coming years, according to Business Monitor International, a unit of Fitch. BMI analysts said there is a growing risk that the U.S. is approaching the so-called crude wall--a scenario in which the oil glut overwhelms limited U.S. refining capacity and triggers a crash in oil prices, unless it allows large volumes of oil exports. "The market remains in a mode of discounting bearish news and continuing to embrace what might be in the future," said Dominick Chirichella, analyst at the Energy Management Institute. He and other analysts warned that cutbacks will take months to reduce production and that the market could still fall back in the meantime. March reformulated gasoline blendstock, or RBOB, settled up 5.23 cents, or 3.4%, to $1.5955 a gallon. March diesel settled up 9.96 cents, or 5.5%, at $1.973 a gallon. Chip Cummins, Eric Yep and Andrey Ostroukh contributed to this article. Write to Timothy Puko at tim.puko@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Timothy Puko and Georgi Kantchev
Subject: Petroleum industry; Crude oil prices; Petroleum production
Location: United States--US
People: van Beurden, Ben
Company / organization: Name: ICE Futures; NAICS: 523210; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654543877
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654543877?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Drop on Record Supplies --- Latest Weekly Data Show Rising Crude Production in the U.S. Is Continuing to Swamp the Market
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Feb 2015: C.4.
Abstract:
Signs of reduced activity in the U.S. shale-oil industry, coupled with spending cuts by large oil companies such as Royal Dutch Shell PLC and BP PLC, have buoyed prices in recent days.
Full text: Oil tumbled for the second day in a row, with the U.S. benchmark slipping back below $50 a barrel, after a government report showed U.S. crude stockpiles reached a new record high. Oil prices have shown signs of stability in the past two weeks after plunging to nearly six-year lows last month amid a global supply glut. News of oil companies cutting back on investment and a reduction in drilling activity are setting the stage for a slowdown in oil-output growth, especially in the U.S., in the second half of the year, analysts and market experts say. Optimism that the glut could ease has supported prices. But weekly data released by the Energy Information Administration on Wednesday showed rising production in the U.S. continues to swamp the oil market, at least for now. "These supply gluts are only going to exacerbate," said Matt Smith, commodity analyst at Schneider Electric SA, an energy-consulting firm. "It's no surprise we're headed back below $50 again." The price of U.S. benchmark crude oil fell 2.4%, or $1.18, to $48.84 a barrel, a one-week low, on the New York Mercantile Exchange. Although the price is up 9.9% from its late-January nadir, it is off 54% from highs in June. Brent, the global benchmark, settled down $1.77, or 3.1%, at $54.66 a barrel on ICE Future Europe. U.S. crude stockpiles rose by a slightly bigger-than-expected 4.9 million barrels to 417.9 million barrels in the week ended Feb. 6, according to the EIA. The amount of oil stored by refiners, traders and other companies stands at the highest level in about 80 years, according to EIA data. Many analysts expect supplies to continue rising in coming weeks as refineries process less crude. Many plants shut down units in the spring to perform seasonal repairs ahead of the summer-driving season, when demand for fuels such as gasoline tends to pick up. Signs of reduced activity in the U.S. shale-oil industry, coupled with spending cuts by large oil companies such as Royal Dutch Shell PLC and BP PLC, have buoyed prices in recent days. On Feb. 6, the number of oil rigs in use in the U.S. fell to a three-year low of 1,140. It was the ninth week in a row of declines and a sign to some investors that production will slow in coming months. "It's an interesting push-and-pull . . . between the rig counts that are coming off extremely fast and the inventories that keep building," said Matt Sallee, portfolio manager at Tortoise Capital Advisors, which oversees about $16.9 billion in energy-related investments. Mr. Sallee expects U.S. oil-production growth to level off before midyear. Domestic oil production rose by 49,000 barrels a day to 9.2 million barrels a day in the latest week, the EIA said. In weekly data going back to 1983, that is an all-time high. Average monthly data last showed production at 9.2 million barrels a day in October 1973, according to the EIA. Gasoline stockpiles rose by two million barrels, more than the 200,000-barrel gain that analysts had expected. Gasoline futures fell 0.91 cent, or 0.6%, to $1.5432 a gallon on the Nymex. Stocks of distillates, including heating oil and diesel fuel, decreased by 3.3 million barrels. Analysts had expected a decline of 1.3 million barrels. Diesel futures dropped 1% to $1.8141 a gallon on the Nymex. Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Feb 12, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654552240
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654552240?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Texas Bankers Watch for Oil Fallout
Author: Sidel, Robin
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]12 Feb 2015: C.1.
Abstract:
Mr. Ruckman's community bank doesn't lend much to the energy companies whose drilling sites dot the local landscape, tapping the Eagle Ford Shale oil deposits of South Texas -- but he still has reason to be concerned about the recent slump in oil prices.
Full text: KARNES CITY, Texas -- Hugh B. "Trip" Ruckman III's family ties to the Karnes County National Bank date to 1901 when it started making loans to cattle ranchers and farmers in this rural community in South Texas. The mobile-home camps and sandstone-colored motels along Highway 181, where some rooms regularly cost more than high-rise hotel rooms in Houston and San Antonio, are newer additions to the local economy. So are the 18-wheelers that race down the streets and the mud-splattered pickup trucks that fill the Dairy Queen parking lot at lunchtime, their sides dotted with energy-company logos. Mr. Ruckman's community bank doesn't lend much to the energy companies whose drilling sites dot the local landscape, tapping the Eagle Ford Shale oil deposits of South Texas -- but he still has reason to be concerned about the recent slump in oil prices. Some 10% of Karnes County National Bank's loans are held by small hotels, many of whose prospects are tied to the energy boom. For now, he says, occupancy rates remain high and there are few indications that oil-field workers are moving out. "I hope I don't eat my words," said Mr. Ruckman, 70 years old, who is president of the bank. Oil and natural gas are old hat in Texas, of course, but the shale revolution brought new prosperity to parts of the state -- and the country -- that haven't experienced an energy bust in all its gory details. Oil prices have dropped by roughly half since last summer, pressured by a glut that is outstripping demand. That has caused an unfamiliar anxiety for many bankers with loans tied to the energy boom, even if indirectly. The drilling boom that lasted most of the past decade was financed largely by private-equity firms and bond deals -- not the local and regional banks that typically provided money to independent exploration firms in generations past. Yet analysts say a sustained price drop creates vulnerability for small and midsize lenders whose customers provide a range of ancillary services, from the carwashes that scrub the trucks to the hotels that house the workers. The impact of the energy swoon on those businesses is in many ways more difficult to predict. So far, many energy bankers say, the mood is cautiously optimistic that a catastrophe isn't looming. "Obviously, it's not a bed of roses, but it's not as bad as people think," said Randy Gartz, a longtime energy banker at Mutual of Omaha Bank in Houston. Mr. Gartz is among the veteran bankers with acute memories of the late 1980s, when about 700 banks and thrifts failed in Texas after oil prices dropped more than 50%. He and his partner, Mike Turner, say they are making more frequent calls to their customers in the oil-field-services business to check on the status of their contracts. Bankers already have started warning customers that credit lines may be reduced in coming months, especially if prices slide further. And they are lowering their own internal projections for oil prices to see how their portfolios will perform in a worst-case scenario. At Atwood Oceanics Inc., a Houston-based company that has delayed delivery of two rigs because of the price slide, the firm's longtime bankers recently called on Mark Mey, the company's chief financial officer, when they were in town on an unrelated matter. Over sushi at a Houston restaurant, they peppered Mr. Mey with questions about the industry. "They were seeking intelligence," said Mr. Mey. At Cadence Bank in Houston, clients that bankers used to call twice a year are hearing from the bank every six weeks. "Clients know that credit lines are coming down, but they want to know by how much," said Paul Murphy, chairman of the bank, which has more than more than $7 billion in assets. Mr. Murphy and his energy bankers say they are keeping close tabs on six or seven clients that could run into trouble. "We recognize that risk is elevated, but we're not panicked," Mr. Murphy said. Regulators also are paying attention. The Office of the Comptroller of the Currency, which regulates the largest U.S. banks and about 1,400 smaller institutions, conducted two reviews of banks' exposure to energy prices in 2014 and has zeroed in on about 10 with significant exposure to the oil-and-gas sector. At the same time, the Texas Department of Banking is monitoring the state's 15 banks that have assets below $1 billion and which are believed to be heavily focused on the energy industry. The department, which oversees 273 banks, so far has focused on three for closer scrutiny. Charles Cooper, commissioner of the Texas regulatory agency, said in an interview that his office is "not pushing the panic button by any means." In Karnes County, many residents have collected royalty checks that reached into six and seven figures, helping Karnes County National's deposits explode to $351 million from $80 million at the start of 2010. Houston developer Bob Keener and his partners borrowed some money from Karnes County National Bank to build a 48-room hotel, the Kenedy Lodge, in March 2013 just as production was exploding. After reaching as high as $169 a night, prices and occupancy levels are down somewhat lately, Mr. Keener said. He isn't worried about having trouble paying back his loan, saying "everything is fine as far as that goes." He declined to say how much he borrowed but said about 40% of the loan remains outstanding. His banker, Mr. Ruckman, is hopeful that everything stays fine. The bank's hotel loans are "gold-plated," he said, but "as we go forward, we're keeping a real close eye on them." --- Ryan Tracy contributed to this article. Credit: By Robin Sidel
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 12, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654552955
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654552955?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Malaysia's Economic Growth Speeds Up Despite Oil Rout; Fourth-Quarter GDP Rises 5.8% From Previous Year, But Pick-Up Might Be Short-Lived
Author: Ng, Jason
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
"While most economies in emerging Asia will benefit from the fall in oil prices, Malaysia is a key exception given its status as a big net energy exporter," Capital Economics economist Krystal Tan said.
Full text: KUALA LUMPUR, Malaysia--Malaysia's economy grew at a faster-than-expected clip in the fourth quarter, reflecting resilient domestic demand and private-sector investments that helped cushion slowing exports of the trade-reliant country. Gross domestic product of Asia's largest oil-and-gas exporter grew 5.8% from October through December compared with the same period last year, despite the collapse in crude prices , which are down by more than half since June. A Wall Street Journal poll of 15 economists had predicted Southeast Asia's third largest economy would expand at a median 5.0% year-over-year. On a seasonally adjusted basis, the economy expanded 2.0% from the third quarter, central bank data showed Thursday. The data are provisional and may be revised. The economy grew 5.6% year-over-year during the third quarter. Malaysia ended 2014 with a full-year growth of 6.0% compared with 4.7% a year earlier. Bank Negara Malaysia Gov. Zeti Akthar Aziz said the economy remains on a "steady growth path" driven largely by domestic demand. Moderating inflation, in part due to lower energy prices, would help lift consumption, Ms. Zeti told a news conference after the data release. Malaysia expects gross domestic product to expand 4.5%-5.5% this year, with inflation ranging between 2.5% and 3.5%. But economists cautioned of headwinds ahead. "While most economies in emerging Asia will benefit from the fall in oil prices, Malaysia is a key exception given its status as a big net energy exporter," Capital Economics economist Krystal Tan said. "With energy-related revenues set to take a hit, the government will have to further cut back on its spending to prevent its fiscal deficit from ballooning." Malaysia's government is grappling with a long-running budget deficit that has sparked criticism from global ratings firms. It has sought to reduce its reliance on the oil-and-gas sector , with total petroleum-related receipts comprising about 30% of government revenue in 2013, down from 40% in 2009. Malaysia's current-account surplus fell 20% in the fourth quarter. But the worst in the current account is yet to come, said Michael Wan, an economist at Credit Suisse. Mr. Wan said the impact from the oil rout has yet to be felt in prices of natural gas. Malaysia is the world's second largest gas exporter behind Qatar. "As such, we could very well see the current account flirting in deficit territory over the second and third quarter," Mr. Wan said. Write to Jason Ng at jason.ng@wsj.com Credit: By Jason Ng
Subject: Budget deficits; Natural gas; Economic growth; Gross Domestic Product--GDP; Petroleum industry
Location: Malaysia Southeast Asia
Company / organization: Name: Bank Negara Malaysia; NAICS: 521110; Name: Credit Suisse Group; NAICS: 522110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654569964
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654569964?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
France's Total Plans to Cut Jobs, Sell Assets After Big Loss; Oil Major Plans to Reduce Costs by $4 Billion This Year
Author: Landauro, Inti; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
The announcements came as Total swung to a net loss of $5.66 billion in the three months to end-December from a net profit of $2.23 billion in the same quarter the previous year after writing off $6.5 billion of the value of its less profitable shale oil and gas and oil sands ventures and its unprofitable European refineries.
Full text: Total SA on Thursday became the latest casualty of the oil-price swoon, reporting a $5.66 billion net loss for the latest financial quarter and promising to shed billions more in cost savings, including 2,000 layoffs by 2017. The company swung to a net loss for the three months to the end of December from a net profit of $2.23 billion in the same quarter the previous year. Total wrote off $6.5 billion of the value of its less profitable shale and oil-sands ventures, as well as its unprofitable European refineries. Total said that it intends to become profitable at an oil price of $70 a barrel; Brent crude was trading at $55.80 a barrel on London's ICE Futures exchange on Thursday morning. Still, the company proposed raising its dividend in the hopes of keeping investors from selling the stock. Chief Financial Officer Patrick de la Chevardière said in an interview Thursday said the company is preparing for a sustained period of low oil prices, sounding a more cautious note on the commodity than some of his peers. The company reported its loss a week after rival BP PLC said it had failed to turn a profit in the fourth quarter . Total's loss came from the write-down of assets that have become less valuable since oil began trading near $50, mainly on shale gas fields in the U.S., oil sands in Canada and refineries in Europe. Other oil companies have also reported lower earnings, but rivals Exxon Mobil Corp., Royal Dutch Shell PLC and Chevron Corp. managed to turn a profit. As with its rivals, Total said it would aggressively cut costs as it reduces its break-even oil price by 36% from last year's $110 a barrel. As well as the layoffs, the company said it would sell assets valued at $5.5 billion and freeze the hiring of new staff at its production, refinery and petrochemicals operations as part of a $4 billion plan to lower costs and rein in investments this year. Total Chief Executive Patrick Pouyanné said Thursday that the restructuring plan shows the company's determination to come to grips with the shift in oil markets. Mr. Pouyanné, who was holding his first corporate news conference as CEO since he succeeded the late Christophe de Margerie, insisted that he wasn't overreacting to the situation. "We don't gamble at the casino. We need a company that resists whatever the barrel price is," he said at a news conference. Before taking the CEO job, Mr. Pouyanné ran Total's beleaguered refining and petrochemicals unit, where he had conducted a cost-cutting effort. With new projects coming on stream, the company expects to raise its output by more than 8% in 2015 from 2.15 million barrels of oil equivalent in 2014. Total has proposed increasing its cash dividend, raising it by 2.5% to [euro]2.44 ($2.77) a share while offering shareholders the option of taking the dividend in the form of stock at a 10% discount to the market price. "It's not unusual. We did this in 1995," Mr. de la Chevardière said. "We need the financial flexibility while we face low oil prices, the duration of which we don't know." He said that even if oil prices only went back up to $70 a barrel, that by 2017, the company would still have enough cash flow to consider a share buyback to offset the dilution created by the scrip dividend option. Oil is currently trading at less than $60 a barrel. Excluding the write-downs and adjusting for changes in inventories, the company reported a net profit of $2.8 billion in the quarter, down from $3.84 billion in the same period a year earlier. The company's overall revenue declined 19% in the fourth quarter to $52.51 billion from $64.98 billion. Write to Inti Landauro at inti.landauro@wsj.com and Selina Williams at selina.williams@wsj.com Credit: Inti Landauro, Selina Williams
Subject: Petroleum industry; Corporate profits; Net losses; Dividends; Cost reduction
Location: Europe
People: Pouyanne, Patrick
Company / organization: Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654570330
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654570330?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Fu rther reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Husky Energy to Cut Capital Spending; Joins Other Energy Companies in Reducing Growth Plans Due to Lower Oil Prices
Author: King, Carolyn
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
Husky Energy Inc. Thursday said it was reducing its planned 2015 capital-spending program, joining a host of energy companies that have pared back growth plans in response to lower oil prices.
Full text: Husky Energy Inc. Thursday said it was reducing its planned 2015 capital-spending program, joining a host of energy companies that have pared back growth plans in response to lower oil prices. Calgary-based Husky said it now expects to spend between 3 billion Canadian dollars ($2.4 billion) and C$3.1 billion this year, down from the C$3.4 billion budget it announced in mid-December, and well below the C$5.0 billion it spent in 2014. Husky said it is targeting another up to C$600 million in operating cost savings from such areas as procurement. The integrated energy company's expected output for the year remains between 325,000 and 355,000 barrels of oil equivalent a day. It said near-term projects, including its Sunrise oil-sands project in Alberta, the South White Rose extension project offshore eastern Canada and its heavy-oil thermal projects, are on track and will add about 85,000 bet barrels a day by the end of 2016. Husky said it swung to a loss in the fourth quarter after booking a noncash impairment charge on some mature energy asset in Western Canada. Its net loss was C$603 million, compared with earnings of C$177 million a year earlier. It said its profit excluding charges was C$147 million. Major energy producers such as Husky have been hit hard by the more-than-50% drop in the price of crude oil since mid-June. Husky's Canadian peers, Suncor Energy Inc. and Imperial Oil Ltd., both reported sharp profit drops in the fourth quarter. Suncor also announced plans to cut 1,000 contract-worker jobs and reduced its 2015 spending budget. Husky maintained its quarterly dividend at 30 Canadian cents a share. Write to Carolyn King at carolyn.m.king@wsj.com Credit: By Carolyn King
Subject: Net losses; Petroleum industry; Profits
Company / organization: Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Husky Energy Inc; NAICS: 213111; Name: Imperial Oil Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654658141
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654658141?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Global Oil Demand Expected to Grow in 2015, Says Shell CEO; CEO Ben van Beurden Warns Oil Supply Won't Likely Keep Pace with Demand Growth
Author: Cummins, Chip
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
LONDON--Royal Dutch Shell PLCChief Executive Ben van Beurden sees oil demand outpacing supply growth this year, and is warning that supply may decline if oil prices stay low.
Full text: LONDON--Royal Dutch Shell PLCChief Executive Ben van Beurden sees oil demand outpacing supply growth this year, and is warning that supply may decline if oil prices stay low. In excerpted, prepared remarks released by Shell on Thursday, Mr. van Beurden said expectations for higher economic growth this year should translate into higher demand for oil. "But seeing today's prices, supply will probably not keep pace with this growth," according to his prepared remarks, which he is expected to deliver later Thursday. "It may even decline." Mr. van Beurden said a rapid recovery in oil prices could "occur if projects are postponed or even canceled. This would lead to less new supply--not so much now, but in two or three years. Combined with economic growth, the market could tighten quickly in this scenario." He said, though, that if U.S. output proves resilient in the face of today's lower prices, "with moderate economic growth, prices could stay low for longer." Write to Chip Cummins at chip.cummins@wsj.com Credit: By Chip Cummins
Subject: Petroleum industry; Supply & demand; Statistical data; Economic growth
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654662511
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654662511?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cenovus to Cut 15% of Workforce, Freeze Salaries; Low Oil Prices Forcing Canadian Oil Sands Company to Scale Back
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
Canadian oil producers have taken a big hit from a more-than-50% drop in crude oil prices since June, and Cenovus joins a number of its peers in announcing measures to combat the steep decline.
Full text: Canadian oil-sands producer Cenovus Energy Inc. said Thursday it will cut about 15% of its workforce, freeze salaries and scale back discretionary spending as it grapples with the continued slump in oil prices. Calgary, Alberta-based Cenovus, which joins a host of other Canadian oil and gas producers who have scaled back to deal with low oil prices, will continue to focus on expansion projects already under way at its Foster Creek and Christina Lake oil-sands projects. Cenovus late last month cut its planned 2015 spending by another 27% from an earlier target and slashed cash-flow projections for the year by about 49%. "These are challenging times for the oil and gas industry," Cenovus Chief Executive Brian Ferguson said in a statement Thursday. "Cenovus is taking steps to ensure we remain strong during this market downturn." Cenovus said the job cuts will occur largely in its contract workforce. The oil-sands producer announced the moves alongside a significant fourth-quarter loss and 52% slump in cash flow. Cenovus posted a fourth-quarter loss of 472 million Canadian dollars ($373 million), or 62 Canadian cents a share, compared with a loss of C$58 million, or eight Canadian cents a year earlier. It said results in the latest period were hurt by a C$497 million noncash goodwill impairment charge for its Pelican Lake operation in Northern Alberta. It said the impairment was related to lower crude prices and a slowing of the development plan at the operation. The company had an operating loss of C$590 million, or 78 Canadian cents a share, while cash flow of C$401 million was less than half the year-earlier level. Oil-sands production rose 25% to 142,000 barrels a day. Canadian oil producers have taken a big hit from a more-than-50% drop in crude oil prices since June, and Cenovus joins a number of its peers in announcing measures to combat the steep decline. Last month, Suncor Energy Inc. cut 1,000 contract-worker jobs and trimmed its 2015 budget by C$1 billion. Earlier Thursday, Husky Energy Inc. cut its planned 2015 spending budget and posted a fourth-quarter loss. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Petroleum industry; Financial performance; Cash flow; Crude oil prices
Location: Calgary Alberta Canada
Company / organization: Name: Husky Energy Inc; NAICS: 213111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Cenovus Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654662626
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Is the Exxon Tiger Ready to Pounce? Oil Giant Well-Armed With Treasury Shares as Downturn Provides Ripe Hunting
Author: Gilbert, Daniel
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
Among them is Anadarko Petroleum Corp., which has a stock-market value of $44 billion, operates in shale-rock formations across the U.S. and is in the early stages of building a massive plant to export gas from Mozambique. Another is BG Group PLC, with a $32 billion stock-market value, which is a major player in shipping natural gas globally and is exploring potentially giant oil prospects in the deep waters off the coast of Brazil.
Full text: Five years ago, an energy rout even worse than the current crude-oil plunge sent natural-gas prices down 70% in a year. That is when Exxon Mobil Corp. snapped up XTO Energy Inc., one of the biggest U.S. gas producers, for $25 billion in stock. Now the nosedive in oil prices is again creating Exxon's favorite hunting conditions, as less-well-heeled companies struggle with shrinking cash flow. With its ability to borrow cheaply--Exxon has a higher credit rating than the U.S. government--analysts say the company is capable of swallowing any rival, regulatory obstacles aside. And the company has amassed a hoard of its own shares that boost its takeover power. A blockbuster deal is far from a sure thing. Irving, Texas-based Exxon would have to go after a big target to meaningfully boost its oil and gas reserves, its inventory of fuels that it can pump at a profit. Acquiring another of the world's biggest oil companies, such as BP PLC, would create an oil company of a size without modern precedent. Already, big oil companies have struggled with managing the logistics of their largest projects, from developments in Canada's oil sands to liquefied natural-gas plants. "The idea that bigger is better I don't think holds water," said Amy Myers Jaffe, executive director of energy and sustainability at the University of California-Davis. "The megaprojects haven't panned out for shareholders." Even so, Wall Street is already speculating on which company Exxon will woo during this downturn. BP "is the obvious fit," Paul Sankey, senior analyst at Wolfe Research, wrote in a report earlier this last week. Buying London-based BP London-based, which is still dealing with the fallout of the 2010 Deepwater Horizon disaster, "would close out a damaged brand at a terrific price" and bolster Exxon's capacity to find new sources of oil and gas. Other potentially attractive targets singled out by analysts include a smaller tier of companies, which have discovered huge deposits of oil and gas but may lack the cash flow to develop them quickly. Among them is Anadarko Petroleum Corp., which has a stock-market value of $44 billion, operates in shale-rock formations across the U.S. and is in the early stages of building a massive plant to export gas from Mozambique. Another is BG Group PLC, with a $32 billion stock-market value, which is a major player in shipping natural gas globally and is exploring potentially giant oil prospects in the deep waters off the coast of Brazil. BP and BG declined to comment. An Anadarko spokesman said the company doesn't comment on rumors. Exxon declined to comment on potential acquisitions. Last week, Jeff Woodbury, the company's head of investor relations, told analysts it is "very alert to value propositions," adding that "we'll pursue only those acquisitions that we think have ultimate strategic value and are accretive to our longer-term returns." Exxon has a history of doing transformative deals during times of distress in the energy industry. It bought Mobil Corp. for about $82 billion in stock in 1999 amid a period of prolonged low oil prices. But it may be wary of another deal like XTO, which has dented its profits because U.S. natural-gas prices have remained low. Today Exxon has few peers big enough to boost its output or profits in a meaningful way. It already produces 2.3% of the world's oil, and refines 11.5% of the gasoline and other fuels in the U.S. If combined with Chevron Corp., the next largest Western oil company by stock-market value, they would supply 4% of global oil, and 17% of American refining output. Such a merger, which would reunite the two biggest pieces of the former Standard Oil empire, might not pass muster with U.S. regulators, some analysts say. Exxon has another tradition--buying up its own shares. It has spent $197 billion on buybacks since 2005, more than double what it has paid in dividends and about 65% of its investment in oil and gas projects over that time. It plans to spend $1 billion buying back its shares in the first quarter of the year, down from a rate of $3 billion a quarter since 2013. The shares go into Exxon's treasury and can be reissued to make acquisitions. Its treasury shares are worth about $353 billion. Exxon's stock rose 2% to $92.37 in 4 p.m. trading on Thursday. Buying back shares shrinks the number available to the public and can increase their value. Exxon has said it buys back shares only after funding oil-and-gas projects that offer a high return, and after paying dividends. Exxon's swollen treasury testifies to the difficulty of improving its profit margins--and, perhaps, to the rich stock-market values of rivals that have made them tough acquisition targets. The downdraft in oil prices is changing that. An index of 21 U.S.-based oil and gas producers is down about 25% from a year ago. Exxon, more resilient to lower prices, is down about 3%. "Given the financial strength of the company and given the distress of the rest of the industry, this is a situation that is tailor made for" Exxon, said J. Robinson West, a senior adviser at the Center for Strategic and International Studies, a Washington, D.C.-based research institution. But that doesn't mean it should acquire another major oil company, he adds. That "doesn't do them much good," he said. "It just makes them bigger." Write to Daniel Gilbert at daniel.gilbert@wsj.com Credit: By Daniel Gilbert
Subject: Acquisitions & mergers; Petroleum industry; Oil reserves; Cash flow; Corporate profits; Prices; Natural gas; Natural gas reserves
Location: United States--US
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: University of California-Davis; NAICS: 611310; Name: BG Group PLC; NAICS: 221210; Name: XTO Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654735621
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1 654735621?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
WSJ Survey: Economists See Cheap Oil Weighing on Capital Investment; Lower Energy Costs a Net Positive; Full-Year GDP Growth Pegged at 2.9%
Author: Madigan, Kathleen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
[...]drag, total business investment on all plant, equipment and intellectual property will increase by just 4.8% this year, the forecasters estimate, rather than the 6.3% gain they think the economy would have seen if oil prices hadn't collapsed.
Full text: Low oil prices will continue benefiting consumers and the broader U.S. economy this year, but economists surveyed by The Wall Street Journal are forming a clearer picture of one downside from cheap oil: slower business investment that offsets a slice of the economic gains. The roster of 69 forecasters--not all of whom answered every question--agree that the drop in fuel costs, especially for gasoline, is a net plus for the economic outlook. "We have had a positive shock in the form of falling oil prices," said Ian Shepherdson of Pantheon Macroeconomics, the most accurate forecaster of 2014 in the Journal survey. Cheap oil, however, is a double-edged sword for the economy given how it might affect the boom in U.S. oil and natural-gas production. As falling prices squeeze earnings, the energy sector is scaling back capital spending. So far, energy producers have sharply cut their purchases of new rigs, drilling machinery and other supplies. The economists expect the trend to continue, with a sharp pullback in capital spending at oil-drilling firms and their suppliers. Because of that drag, total business investment on all plant, equipment and intellectual property will increase by just 4.8% this year, the forecasters estimate, rather than the 6.3% gain they think the economy would have seen if oil prices hadn't collapsed. Overall capital spending in 2014 climbed 5.5%. "When companies run into bottom-line issues, they are quick to cut expenditures," said Allen Sinai of Decision Economics. Another reason to worry about capital spending this year is the rising value of the U.S. dollar. "The strong dollar will cause some exporters to reconsider their capital-spending programs," said Russell Price of Ameriprise Financial. Mr. Price warns the rising currency will hurt profit growth in 2015, creating another drag on business investment. Despite the weakness in capital spending, forecasters are optimistic about the overall U.S. economy. The average forecast says inflation-adjusted gross domestic product will grow 2.9% over the course of 2015. That would be faster than the 2.5% gain in 2014 and the second-best annual performance since the recession ended. Supporting the outlook are expectations that oil prices will rise only slowly this year, and solid job growth will lead to bigger pay raises. "Lower oil prices and income gains could unleash faster consumer spending," said Lynn Reaser of Point Loma Nazarene University. Economists in the survey expect the nation's jobless rate will fall to 5.2% by the end of the year, from January's rate of 5.7%. So far in this expansion, though, the forecasters have started each year expecting good things from the economy, only to have the unexpected--both good and bad--reshape the outlook. In four of the five full years of this economic expansion, annual GDP forecasts in the January and February surveys have been higher than the actual growth rate the year delivered. What could derail the economy in 2015? As was the case through most of 2014, the majority of economists still cite international events as the biggest potential nightmares. Slower global growth was the top potential danger, but other foreign risks included financial-market fallout if Greece exits the eurozone and an escalation of Ukraine-Russia tensions. Write to Kathleen Madigan at kathleen.madigan@wsj.com Credit: By Kathleen Madigan
Subject: Petroleum industry; Prices; American dollar; Recessions; Economic growth; Gross Domestic Product--GDP; Economists
Location: United States--US
Company / organization: Name: Ameriprise Financial Inc; NAICS: 523930; Name: Point Loma Nazarene University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654735713
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654735713?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.N. Moves to Choke Off Islamic State's Cash; Security Council Tries to Block Revenue the Militants Derive From Smuggling Oil, Antiquities and Ransoms From Kidnapping
Author: Lauria, Joe
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]12 Feb 2015: n/a.
Abstract:
The United Nations Security Council tightened sanctions on Islamic State militants in an effort to block the revenue they derive from smuggling oil, antiquities and ransoms from kidnapping.
Full text: The United Nations Security Council tightened sanctions on Islamic State militants in an effort to block the revenue they derive from smuggling oil, antiquities and ransoms from kidnapping. The unanimously adopted measure reaffirms prior U.N. bans while adding new ones. It seeks to add new names to a U.N. list of individuals that trade illicitly with Islamic State, as well as with Nusra Front, an al Qaeda-linked rebel group in Syria. It asks governments to provide the U.N. with names of such people, who would be subjected to international sanctions. Thursday's measure also prohibits trade with the militants in Syrian antiquities . A U.N. ban on trade in Iraqi antiquities has been in place since 2005. The resolution further adds man-portable surface-to-air missiles, or so-called man-pads, to an existing U.N. arms embargo on both Nusra Front and Islamic State, which controls large swaths of territory in Iraq and Syria. And it sets new requirements for nations to report to the council within 120 days when they have intercepted oil products, arms and antiquities. The resolution unites the U.S., Russia and Syria on fighting Islamic State, even as the White House is at odds with them over its contention that Syrian President Bashar al-Assad's regime must step down for its crimes against civilians. Damascus sees the accord as a vindication of its view that its paramount battle is against Islamist extremism. "This is the most comprehensive resolution addressing the issue of terrorism," Syria's U.N. Ambassador Bashar Ja'afari told reporters at the U.N. The American ambassador to the U.N., Samantha Power, told the council that the resolution was "part of a comprehensive strategy to degrade and ultimately destroy" the group. She said the move would add to the difficulty Islamic State is already experiencing due to the previous sanctions in generating funds for its operations. A U.N. report in November estimated Islamic State militants were earning between $846,000 to $1.6 million a day from illegal oil sales. Since then U.S. airstrikes on Islamic State oil installations and the drop in oil prices has cut into that revenue, Western diplomats said. Officials said there are no reliable estimates for revenue from smuggling antiquities, which consist of Greek, Roman, early Christian and Islamic artifacts. The council's measure reaffirmed a June 2014 Security Council ban on financial transactions with terrorist groups, including the payment of ransoms. It calls on all nations to follow guidelines on terrorist kidnappings. But the resolution doesn't spell out what those guidelines are. The U.S. has refused to pay ransoms for U.S. nationals who are kidnapped by terrorist groups, while several European governments have paid to get their citizens released. The November U.N. report said Islamic State was earning $96,000 to $123,000 a day in ransom payments. The council said it was concerned about ongoing financial donations to Islamic State, al Nusra, and other al-Qaeda-linked groups. The resolution calls on countries to "encourage their financial institutions to prevent these terrorist groups from accessing the international financial system." A U.S. official said the Obama administration was in touch with its Gulf Arab allies about cutting off financing for extremist groups from private donations and from Turkey on smuggled oil. "We have been having a dialogue with them on the financing in general, it is a dialogue we are always pushing our partners on to do more," the U.S. official said. "When you have U.N. language it can often help countries to give political cover to freeze assets, and cut off financing because they want to be seen to be compliant." Write to Joe Lauria at newseditor@wsj.com Credit: By Joe Lauria
Subject: Muslims; Religious fundamentalism; Kidnapping; Diplomatic & consular services; Councils; Islamism
Location: United States--US Syria
People: Power, Samantha Assad, Bashar Al
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 12, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654774764
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654774764?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
TransCanada Plans to Seek U.S. Approval for New Pipeline Project; Oil Company Wants to Build 200-Mile Pipeline from North Dakota into Canada
Author: Harder, Amy; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract:
Plans for Keystone XL call for transporting up to 830,000 barrels of oil a day, mostly from Canada's oil sands region to Steele City, Neb.
Full text: The company behind the Keystone XL pipeline plans to ask the U.S. government to permit a new and different pipeline project. Despite the yearslong fight over Keystone XL, TransCanada Corp. will apply to the U.S. State Department to build a 200-mile pipeline from North Dakota's booming oil fields across the border into Canada to connect to another proposed pipeline, according to a person briefed on the plan. In its earnings report Friday, the company will announce it is proposing the $600 million Upland Pipeline Project, which aims to transport up to 300,000 barrels a day of North Dakota crude to a connection in Saskatchewan, according to the person briefed on the plan. From there, the oil can flow on TransCanada's planned Energy East pipeline, which aims to ship up to 1.1 million barrels of oil a day nearly 3,000 miles across Canada to refineries and ports along the country's East Coast. U.S. laws restrict American oil exports, but companies are generally allowed to sell crude to Canada if they apply for a license. U.S. oil exports to Canada have been on the rise in recent years. During the first 11 months of 2014, close to 106 million barrels of oil pumped in the U.S. was exported to Canada--more than double the volume exported in 2013, according to data from the U.S. Energy Information Administration. The Upland pipeline is scheduled to go into service in 2018, subject to regulatory approvals, which includes a permit from the State Department to cross the U.S.-Canadian border, the person briefed on the plan said. The announcement indicates TransCanada isn't backing down on its oil-shipping plans despite an increasingly political fight over Keystone XL. The U.S. House cleared legislation Wednesday approving the proposed pipeline, the latest--but not the last--twist in a saga that has escalated into a broad debate on the economy, energy production and climate change. President Barack Obama has cited his administration's ongoing review of the project as the reason he is threatening to veto the legislation, which should reach his desk later this month. The State Department, which has jurisdiction over cross-border pipeline construction, has been reviewing Keystone XL since September 2008. The department is in its final stage of review, but has no deadline to make a final decision. Vetoing the legislation doesn't interfere with the State Department's process. Plans for Keystone XL call for transporting up to 830,000 barrels of oil a day, mostly from Canada's oil sands region to Steele City, Neb. From there, Keystone XL would connect with existing pipelines that could move the oil south to refineries along the Gulf Coast. As proposed, up to 100,000 barrels of that crude oil could come from North Dakota, though it isn't clear whether TransCanada's new Upland Pipeline Project changes those dynamics. If completed, the entire Keystone XL Pipeline system would span 1,700 miles and cross six U.S. states. The years of delay and increased permitting costs have doubled Keystone XL's cost to $10 billion. So far, TransCanada has spent $3 billion on the project. The company's move comes at a tenuous moment for North Dakota's oil patch, where prices have crashed and oil companies are slowing down drilling efforts. In recent years, refineries along the east coast of the U.S. and Canada have opted to buy North Dakota crude instead of importing pricier foreign oil from countries like Nigeria. Much of the oil pumped in North Dakota moves to the Atlantic seaboard on trains because few pipelines exist to take it that far. As of November--the latest data available--oil trains carried roughly 60% of the crude leaving the region, according the North Dakota Pipeline Authority. But the plunge in oil prices has made foreign crude oil much cheaper, and some refiners have recently imported more foreign crude. Tom Nimbley, chief executive of PBF Energy Inc., which operates refineries in Delaware and New Jersey, said North Dakota crude will to make its way east, but it isn't as popular as it once was. PBF has been buying more South American oil instead this year, he added. Some small pipelines have been built to move crude out of North Dakota in recent years, and a few larger ones are proposed. It is cheaper to transport oil on a pipeline than in trains, but building new lines can take years and is an expensive and politically charged process, even when they don't cross an international border. Phillips 66, one of the biggest refiners in the U.S., and Energy Transfer Partners, a Dallas-based pipeline company, have proposed a Bakken pipeline that aims ship oil from North Dakota to Texas by way of Illinois. But regulatory obstacles have delayed plans by Enbridge Energy Partners of Canada, which wants to build a $2.6 billion, 600-mile pipeline system to deliver North Dakota crude to Wisconsin and other points in the Midwest and on the East Coast. Ben Dummett contributed to this article Write to Amy Harder at amy.harder@wsj.com and Alison Sider at alison.sider@wsj.com Credit: By Amy Harder and Alison Sider
Subject: Pipelines; Petroleum refineries; Petroleum industry; Crude oil; Legislation
Location: United States--US Canada North Dakota
People: Obama, Barack
Company / organization: Name: Energy East Corp; NAICS: 551112, 221111; Name: Department of State; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654787861
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654787861?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Energy Sector Draws Investors in Distressed Securities; Wilbur Ross, Blackstone's GSO Capital Raising Funds for Oil and Gas
Author: Wirz, Matt
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract:
A quarter of bond investors polled by Bank of America last month held fewer energy bonds than the benchmark index they track, the largest proportion since the survey began in 2005. Since June 30, 91 U.S. energy companies with market capitalizations exceeding $100 million have lost more than half their stock-market value, said Howard Silverblatt, an analyst for S&PDow Jones Indices.
Full text: The oil slump is drawing interest from some of the savviest bargain hunters on Wall Street. Veteran hedge-fund manager Wilbur Ross, Blackstone Group LP's GSO Capital Partners and Apollo Global Management LLC are among those raising funds to buy the battered stocks, bonds and loans of energy firms following a 54% decline in New York crude prices since June. More traditional investors like Western Asset Management Co. and Seix Investment Advisors LLC also have started funds to help large clients such as endowments and pension funds to place bets on the ailing energy industry. Oil's plunge to six-year lows has spurred an exodus from the securities of companies that explore for, produce, transport and refine oil and gas. The carnage is creating an opening for distressed investors, who snap up cheap stocks and bonds of troubled companies, seeking to profit when prices rebound or to use the investments to take the companies over in bankruptcy. Mr. Ross has used the strategy to build businesses in the steel, automotive and textile industries and is now starting an energy-focused fund, a person familiar with the matter said. Fueling the fundraising rush: Bargain investments have been hard to find in recent years, as low interest rates and a U.S. economic rebound have helped pump up many major stock indexes and bond prices to records. "We sold our last material private investment 18 months ago and we've been waiting for an opportunity ever since," said Clint Carlson, whose Carlson Capital LP hedge fund manages $9 billion in Dallas. The oil-price plunge has hammered revenues for energy producers and the companies that work with them, as well as investor sentiment. A quarter of bond investors polled by Bank of America last month held fewer energy bonds than the benchmark index they track, the largest proportion since the survey began in 2005. Since June 30, 91 U.S. energy companies with market capitalizations exceeding $100 million have lost more than half their stock-market value, said Howard Silverblatt, an analyst for S&PDow Jones Indices. In the junk-bond market, there were 111 energy-company bonds that traded for less than 80 cents on the dollar in February, compared with six in July, according to data provider MarketAxess. Bonds typically trade close to 100 cents on the dollar--the face amount the company must pay at maturity--and prices below 80 cents reflect risk that the borrower may default. Bonds now trading below that threshold have a face value of $57 billion and market value of about $34 billion. Investors are pursuing diverging strategies in the wake of the slump. Bearish fund managers are using a technique called short selling to profit from the drop in stock and bond prices. Some funds have started purchasing securities of higher-quality companies they believe have been unfairly beaten down and will survive the downturn. Others are waiting for prices to fall further before buying bonds of firms that are likely to default, aiming to swap the debt for ownership stakes in a strategy called "loan-to-own." GSO is targeting between $500 million and $1 billion for its new fund focused on debt of distressed energy companies, and Seix is aiming for about $500 million for a comparable fund, people familiar with the matter said. Ironically, the greatest worry for some fund managers is that too many other investors will jump on the energy trade, pushing prices back up before they can exploit the oil-related selloff. "The sector traded down very quickly" and could bounce sharply, said Michael Buchanan, the head of global credit at Western Asset Management. "That's why we're looking to move quickly." Western Asset, which manages about $134 billion of bond and loan investments, has launched a fund to buy debt of energy companies rated below investment grade in the next three to six months, he said. Some investors, like Mr. Carlson and Halcyon Asset Management, are focusing on energy stocks for now because equity valuations of stronger companies have been hit harder than their bond prices. Jim McGinness, manager of Halcyon's energy fund, said he saw a bargain in shares of Devon Energy Corp., for example, which fell 32% from July to January. The company's bonds declined 6% over the same period. Halcyon expects to build up its roughly $100 million energy fund to about $500 million by the end of 2015, as the firm's European clients have started clamoring to invest in the energy industry, a person familiar with the matter said. Five years ago, Mr. Carlson's fund made a 39% return on a $1 billion bet on distressed mortgage bonds. Now, the firm is launching three funds to bet on the securities of energy companies hit by falling oil prices. One of the funds, which can buy energy-company securities or bet against them, has started investing, but Mr. Carlson is waiting to ramp up the other two, which will buy stocks and bonds for the long term, because he expects most prices to fall further. The firm has 12 analysts and fund managers covering energy and power companies who are working full-bore assessing new investments, he said. "The last time we made a big investment was in 2009 in [mortgage-backed] bonds," said Mr. Carlson. "This is the next opportunity." Write to Matt Wirz at matthieu.wirz@wsj.com Credit: By Matt Wirz
Subject: Investment advisors; Corporate profits; Prices; Asset management; Stocks
Location: New York
Company / organization: Name: Seix Investment Advisors; NAICS: 523920; Name: Western Asset Management Co; NAICS: 523930; Name: Apollo Global Management LLC; NAICS: 523920; Name: Bank of America Corp; NAICS: 522110, 551111; Name: GSO Capital Partners LP; NAICS: 525990; Name: Blackstone Group LP; NAICS: 523110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654789639
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654789639?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Prices Gain on Hopes for European Demand; WTI, Brent Rise for Third Week in a Row, Largest Three-Week Percentage Gains in Nearly Four Years
Author: Iosebashvili, Ira; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract: None available.
Full text: Oil prices rose, with Brent climbing above $60 a barrel for the first time this year, as improving economic data from Europe boosted hopes for an increase in the demand for crude. Brent, the global benchmark, jumped 3.8% to $61.52 a barrel on ICE Future Europe, its highest close since Dec. 23. The price of U.S. benchmark crude closed up 3.1% at $52.78 a barrel on the New York Mercantile Exchange. Both benchmarks rose for the third week in a row, posting their largest three-week percentage gains in nearly four years. Brent prices have risen 26% and Nymex crude has gained 16% since Jan. 23. The gains reflect investors' expectations that a global glut of oil will be shrinking soon, as energy companies cut production and economic growth spurs greater demand for gasoline and other crude products. Germany led an acceleration in eurozone economic growth in the final three months of 2014, data from the European Union's statistics agency showed Friday. The combined gross domestic product of the 18 eurozone countries grew 0.3% in the fourth quarter, beating analysts' estimates and offering oil bulls hope that demand from the region could increase. Oil prices also received a boost from reports that more energy companies will cut spending and trim jobs, an indication that they may be preparing to curtail production at a time when global oil supplies are outpacing demand. "We are preparing the company to face a long period of low oil prices," Patrick de la Chevardière, chief financial officer at French oil major Total SA, said Thursday. Barclays estimates that company announcements this year indicate oil companies that combined account for nearly half of the world's oil-and-gas spending intend to spend 16% less on exploration and production in 2015. In addition, the number of drilling rigs seeking oil in the U.S. fell for a 10th week in a row to a three-year low of 1,056. The drop has yet to translate into a fall in oil production. The Energy Information Administration on Wednesday said the U.S. produced 9.2 million barrels of crude a day in the week ended Feb. 6, the highest since the government began tracking weekly oil output. The production numbers have weighed on oil bulls' recent enthusiasm, market watchers said. Oil prices have been up for nine of the past 12 sessions. Data showing that the number of active U.S. oil rigs fell by 84 in the week ended Feb. 13 failed to push oil to new gains on the day, as they had in previous weeks. "Ultimately, you will see a drift to the upside, but it's not something that's going to happen in the next week or so," said Robert Yawger, director of the futures division at Mizuho Securities USA. "There's plenty of supply out there." U.S. oil prices fell for seven consecutive months but are up 9.4% in February, rising on expectations of tighter supplies and a wave of cold weather in the Northeast. Some analysts believe the glut of supply will likely limit any further price gains in oil. "With declining rig counts in the U.S. unlikely to have much impact on production just yet, and seasonal demand weak, the rally in the oil price may falter soon," analysts at Capital Economics said in a note to clients. Nymex reformulated gasoline blendstock for March delivery, the benchmark contract, rose 1.9% to $1.6262 a gallon, its highest settlement since Dec. 10. Diesel for March changed hands at $1.9714 a gallon, up 3%. Write to Ira Iosebashvili at ira.iosebashvili@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Ira Iosebashvili and Georgi Kantchev
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654861945
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654861945?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Is the Exxon Tiger Ready to Pounce?
Author: Gilbert, Daniel
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Feb 2015: B.1.
Abstract:
Among them is Anadarko Petroleum Corp., which has a stock-market value of $44 billion, operates in shale-rock formations across the U.S. and is in the early stages of building a massive plant to export gas from Mozambique. Another is BG Group PLC, with a $32 billion stock-market value, which is a major player in shipping natural gas globally and is exploring potentially giant oil prospects in the deep waters off the coast of Brazil.
Full text: Five years ago, an energy rout even worse than the current crude-oil plunge sent natural-gas prices down 70% in a year. That is when Exxon Mobil Corp. snapped up XTO Energy Inc., one of the biggest U.S. gas producers, for $25 billion in stock. Now the nosedive in oil prices is again creating Exxon's favorite hunting conditions, as less-well-heeled companies struggle with shrinking cash flow. With its ability to borrow cheaply -- Exxon has a higher credit rating than the U.S. government -- analysts say the company is capable of swallowing any rival, regulatory obstacles aside. And the company has amassed a hoard of its own shares that boost its takeover power. A blockbuster deal is far from a sure thing. Irving, Texas-based Exxon would have to go after a big target to meaningfully boost its oil and gas reserves, its inventory of fuels that it can pump at a profit. Acquiring another of the world's biggest oil companies, such as BP PLC, would create an oil company of a size without modern precedent. Already, big oil companies have struggled with managing the logistics of their largest projects, from developments in Canada's oil sands to liquefied natural-gas plants. "The idea that bigger is better I don't think holds water," said Amy Myers Jaffe, executive director of energy and sustainability at the University of California-Davis. "The megaprojects haven't panned out for shareholders." Even so, Wall Street is already speculating on which company Exxon will woo during this downturn. BP "is the obvious fit," Paul Sankey, senior analyst at Wolfe Research, wrote in a report earlier this last week. Buying London-based BP, which is still dealing with the fallout of the 2010 Deepwater Horizon disaster, "would close out a damaged brand at a terrific price" and bolster Exxon's capacity to find new sources of oil and gas. Other potentially attractive targets singled out by analysts include a smaller tier of companies, which have discovered huge deposits of oil and gas but may lack the cash flow to develop them quickly. Among them is Anadarko Petroleum Corp., which has a stock-market value of $44 billion, operates in shale-rock formations across the U.S. and is in the early stages of building a massive plant to export gas from Mozambique. Another is BG Group PLC, with a $32 billion stock-market value, which is a major player in shipping natural gas globally and is exploring potentially giant oil prospects in the deep waters off the coast of Brazil. BP and BG declined to comment. An Anadarko spokesman said the company doesn't comment on rumors. Exxon declined to comment on potential acquisitions. Last week, Jeff Woodbury, the company's head of investor relations, told analysts it is "very alert to value propositions," adding that "we'll pursue only those acquisitions that we think have ultimate strategic value and are accretive to our longer-term returns." Exxon has a history of doing transformative deals during times of distress in the energy industry. It bought Mobil Corp. for about $82 billion in stock in 1999 amid a period of prolonged low oil prices. But it may be wary of another deal like XTO, which has dented its profits because U.S. natural-gas prices have remained low. Today Exxon has few peers big enough to boost its output or profits in a meaningful way. It already produces 2.3% of the world's oil, and refines 11.5% of the gasoline and other fuels in the U.S. If combined with Chevron Corp., the next largest Western oil company by stock-market value, they would supply 4% of global oil, and 17% of American refining output. Such a merger, which would reunite the two biggest pieces of the former Standard Oil empire, might not pass muster with U.S. regulators, some analysts say. Exxon has another tradition -- buying up its own shares. It has spent $197 billion on buybacks since 2005, more than double what it has paid in dividends and about 65% of its investment in oil and gas projects over that time. It plans to spend $1 billion buying back its shares in the first quarter of the year, down from a rate of $3 billion a quarter since 2013. The shares go into Exxon's treasury and can be reissued to make acquisitions. Its treasury shares are worth about $353 billion. Exxon's stock rose 2% to $92.37 in 4 p.m. trading. Buying back shares shrinks the number available to the public and can increase their value. Exxon has said it buys back shares only after funding oil-and-gas projects that offer a high return, and after paying dividends. Exxon's swollen treasury testifies to the difficulty of improving its profit margins -- and, perhaps, to the rich stock-market values of rivals. The downdraft in oil prices is changing that. An index of 21 U.S.-based oil and gas producers is down about 25% from a year ago. Exxon, more resilient to lower prices, is down about 3%. "Given the financial strength of the company and given the distress of the rest of the industry, this is a situation that is tailor made for" Exxon, said J. Robinson West, a senior adviser at the Center for Strategic and International Studies, a Washington, D.C.-based research institution. But that doesn't mean it should acquire another major oil company, he adds. That "doesn't do them much good," he said. "It just makes them bigger." Credit: By Daniel Gilbert
Subject: Acquisitions & mergers; Petroleum industry; Oil reserves; Cash flow; Corporate profits; Prices; Natural gas; Natural gas reserves
Location: United States--US
Company / organization: Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 9190: United States; 8510: Petroleum industry; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Feb 13, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654868272
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News -- WSJ Survey: Drag on Growth: Oil-Patch Slowdown
Author: Madigan, Kathleen
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]13 Feb 2015: A.2.
Abstract:
[...]drag, total business investment on all plant, equipment and intellectual property will increase by just 4.8% this year, the forecasters estimate, rather than the 6.3% gain they think the economy would have seen if oil prices hadn't collapsed.
Full text: Low oil prices will continue benefiting consumers and the broader U.S. economy this year, but economists surveyed by The Wall Street Journal are forming a clearer picture of one downside from cheap oil: slower business investment that offsets a slice of the economic gains. The roster of 69 forecasters -- not all of whom answered every question -- agree that the drop in fuel costs, especially for gasoline, is a net plus for the economic outlook. "We have had a positive shock in the form of falling oil prices," said Ian Shepherdson of Pantheon Macroeconomics, the most accurate forecaster of 2014 in the Journal survey. Cheap oil, however, is a double-edged sword for the economy, given how it might affect the boom in U.S. oil and natural-gas production. As falling prices squeeze earnings, the energy sector is scaling back capital spending. So far, energy producers have sharply cut their purchases of new rigs, drilling machinery and other supplies. The economists expect the trend to continue, with a sharp pullback in capital spending at oil-drilling firms and their suppliers. Because of that drag, total business investment on all plant, equipment and intellectual property will increase by just 4.8% this year, the forecasters estimate, rather than the 6.3% gain they think the economy would have seen if oil prices hadn't collapsed. Overall capital spending in 2014 climbed 5.5%. "When companies run into bottom-line issues, they are quick to cut expenditures," said Allen Sinai of Decision Economics. Despite the weakness in capital spending, forecasters are optimistic about the overall U.S. economy. The average forecast says inflation-adjusted gross domestic product will grow 2.9% over the course of 2015. That would be faster than the 2.5% gain in 2014 and the second-best annual performance since the recession ended. Supporting the outlook are expectations that oil prices will rise only slowly this year, and solid job growth will lead to bigger pay raises. "Lower oil prices and income gains could unleash faster consumer spending," said Lynn Reaser of Point Loma Nazarene University. Economists in the survey expect the nation's jobless rate will fall to 5.2% by the end of the year, from January's rate of 5.7%. What could derail the economy in 2015? Slower global growth was the top potential danger, but other foreign risks included financial-market fallout if Greece exits from the eurozone and an escalation of Ukraine-Russia tensions. Credit: By Kathleen Madigan
Subject: Petroleum industry; Recessions; Gross Domestic Product--GDP; Economists; Economic growth
Location: United States--US
Classification: 9190: United States; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Feb 13, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654868375
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654868375?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Giant Oil Field Spells Promise for Statoil; Johan Sverdrup Field Could Be Profitable Even at Low Oil Prices
Author: Hovland, Kjetil Malkenes
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract: None available.
Full text: OSLO--One of Norway's biggest-ever oil projects edged closer to production Friday, a field of rare size and potential that officials said could be profitable even if crude prices fall further. The Johan Sverdrup field in the North Sea will start pumping oil by 2019 under a plan presented by Statoil ASA and its partners to the Norwegian government on Friday. The field is among a handful of "elephants"--fields exceeding one billion barrels of recoverable resources--found globally each year. It is estimated to hold between 1.7 billion and 3 billion barrels. "This is a monster," C. Ashley Heppenstall, chief executive of Lundin Petroleum AB, one of the project's partners, told The Wall Street Journal. "In a $50 oil price environment, Johan Sverdrup is probably one of the very few projects which will go ahead, globally." Even as oil companies including Statoil slash their capital spending as crude prices flounder near 5½-year lows, Johan Sverdrup has demonstrated potential for big profits, analysts said. Statoil has said Johan Sverdrup would be the only major project to get the go-ahead this year because of lower oil prices and spending cutbacks . "This plan represents the most extensive development of any oil field on the Norwegian continental shelf since the big giants in the 1980s," Statoil Chief Executive Eldar Sætre told an Oslo news conference Friday. "The field has robust economics with a break-even price at below $40 per barrel." Statoil's move comes as oil companies are pulling back from more expensive projects, in particular American shale oil. The number of drilling rigs in the U.S. has fallen in recent months as the price of oil halved to less than $50 a barrel from June to January, before recovering some of the losses. Statoil said the field's crude could be profitable even if the oil price were to fall to $40 a barrel. The Brent crude benchmark was trading at about $61 on Friday afternoon, up about 3.1% on the day. Norwegian oil projects usually require prices at between $40 and $70 a barrel to make a profit. Statoil last week said 14 other planned projects, including assets in Norway, Tanzania and the U.S., risk delays at current oil prices. Johan Sverdrup's potential stems from the high quality of its oil and its location in shallow waters near existing infrastructure, as well as its sheer size. Discovered in 2010, Johan Sverdrup will be a cornerstone of Norway's oil production, contributing about 40% of the country's total crude output in the 2020s, Statoil said. Spending in the project's first phase is set to total 117 billion Norwegian kroner ($15.35 billion). Energy research firm Wood Mackenzie estimated that Johan Sverdrup would produce more crude oil than the entire U.K. oil sector by 2025, and contribute 10% of Statoil's global crude production--or 5% of the company's combined oil and gas output--by 2020. Norway's Parliament is expected to approve the plan this spring. In an unusual move, four out of the five owners asked the government to decide the final size of each partner's stake in the field, which stretches over three licenses. The move came after protests from Det Norske Oljeselskap ASA on the size of its stake. "We cannot sign an agreement," said Det Norske Chief Executive Karl Johnny Hersvik. The government wasn't happy about the disagreement. "If you're a player on the Norwegian shelf and [are] allowed to produce our energy resources...you also have a responsibility to find good solutions," said Tord Lien, Norway's minister of petroleum and energy. The current proposal says Statoil should get roughly 40% ownership, Lundin 22%, Det Norske 12%, Maersk Oil 8% and Petoro 18%. Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com Credit: By Kjetil Malkenes Hovland
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654869165
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654869165?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
ITT Profit Beats Views, But it Warns of Lower Sales in 2015; Company Faces Headwinds From Oil-and-Gas Market, Currencies
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract:
ITT Corp. said growth in global oil-and-gas project pumps drove stronger-than-expected results in its fourth quarter, though it reported weakness in its motion-technologies segment and warned sales would be down this year.
Full text: ITT Corp. said growth in global oil-and-gas project pumps drove stronger-than-expected results in its fourth quarter, though it reported weakness in its motion-technologies segment and warned sales would be down this year. Chief Executive Denise Ramos said ITT continues to face a difficult external environment with headwinds from the global oil-and-gas market and from foreign exchange. For 2015, the company expects per-share earnings of about $2.55 to $2.65, with total revenue down 1% to 3%. Analysts polled by Thomson Reuters had called for earnings of $2.61 and sales to increase 1%. The company manufactures components for markets such as energy infrastructure, electronics, aerospace and transportation. After spinning off its water and defense businesses in 2011, ITT has continued to realign its portfolio of businesses. Industrial-process revenue jumped 15% in the fourth quarter, driven by growth in global oil-and-gas project pumps, as well as North American chemical and mining pumps. However, revenue in the motion-technologies segment--which designs braking technologies and shock absorbers--fell 13%, due to aftermarket restocking. However, the segment did see market gains in China. Sales in the interconnect solutions segment fell 10%, as weakness in defense and nonstrategic connectors offset growth in the oil-and-gas connector segments. In all, ITT reported a profit of $33.7 million, or 36 cents a share, up from $11.2 million, or 12 cents a share, a year earlier. Excluding restructuring costs, tax-related adjustments and other items, earnings were 59 cents, up from 49 cents. Revenue rose 2% to $660 million. Analysts polled by Thomson Reuters had predicted earnings of 57 cents on revenue of $648 million. Shares of ITT have declined about 3% this year through Thursday's close. Credit: By Angela Chen
Subject: Financial performance
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654915475
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654915475?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Import Prices Fell 2.8% in January; Oil's Plunge, Dollar's Strength Keep Inflation in Check
Author: Sparshott, Jeffrey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract:
The price index for personal consumption expenditures, the central bank's preferred inflation measure, was up just 0.7% from a year earlier in December.
Full text: WASHINGTON--Cheaper oil, a stronger dollar and sluggish global growth are pushing down the price of goods imported into the U.S., keeping overall inflation low and complicating the Federal Reserve's plans to start raising interest rates later this year. Import prices fell 2.8% from December, the Labor Department said Friday, the biggest decrease more than six years, when the U.S. was still mired in recession. Prices were down 8% compared with a year earlier, the biggest 12-month drop since September 2009. Import prices have declined for seven straight months, sinking alongside a sharp drop in the cost of oil. Crude prices are down by roughly half since June, though they've leveled off somewhat since mid-January. While falling prices for commodities and other imported goods have been a boon for most American consumers--leading to cheaper gasoline, for example--they also are softening demand for American-made goods and keeping inflation well below the Fed's 2% target. The price index for personal consumption expenditures, the central bank's preferred inflation measure, was up just 0.7% from a year earlier in December. Other measures of inflation, including consumer- and producer-price figures out later this month, also are expected to reflect cheaper oil and sluggish overseas growth. Inflation remains slow even after stripping out volatile energy and food costs. "With expectations of continued dollar strength and lower commodity prices, import prices...should weigh further on domestic goods inflation in the months ahead," said Sam Bullard, senior economist at Wells Fargo. Friday's report said petroleum import prices tumbled 17.7% in January from the previous month, and were down 40.1% from January 2014. While the U.S. is a major source of the rising global oil output that has pushed prices lower, the country still imports millions of barrels every day. But other factors, including the relative strength of the dollar and tepid growth overseas, also are tamping down the cost of overseas goods. Excluding petroleum, import prices declined 0.7% from the previous month, the largest decrease since March 2009, and are down 1.2% from a year earlier. The price of imports from major trade partners, including Canada, the European Union, Mexico, Japan and China, all fell. Europe has been especially weak. For all of 2014, the eurozone's economy expanded 0.9%. The dynamics have created a dilemma for Fed officials, who must balance strong job gains against low inflation. Last month, officials signaled they wouldn't raise the central bank's benchmark interest rate from near zero before this summer. U.S. exporters also are facing new challenges with limited overseas demand and products made relatively more expensive because of a weaker euro and other currencies. Export prices tumbled 2% from a month earlier, the biggest fall since October 2011. Industrial supplies, which include petroleum-related products, were the biggest drag. Some companies have been able to take advantage of falling costs. "One of the interesting things that's been a benefit for us, a lot of our raw materials and parts and components that we use in our treatment systems do come from international markets," said Rich Cavagnaro, president of Adedge Water Technologies, a Buford, Ga., manufacturer of water-treatment systems. "We're certainly not seeing any price increases...from vendors. So on one hand it's helping us keep competitive in our markets." Adedge saw overseas sales come to a crawl for a short while last year but eventually started to pick up as the dollar stabilized. This year, Mr. Cavagnaro expects exports to account for about half of its business, up from 40% in 2014 and zero as recently as 2010. The company isn't reducing prices or cutting profits, though it has altered some designs to offer customers scaled down, less expensive options for systems that can cost $500,000 to more than $1 million. Write to Jeffrey Sparshott at jeffrey.sparshott@wsj.com Credit: By Jeffrey Sparshott
Subject: Central banks; Expansion; Price increases
Location: United States--US
Company / organization: Name: Wells Fargo & Co; NAICS: 522110, 551111; Name: European Union; NAICS: 926110, 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654939057
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654939057?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
EU Opens In-Depth Probe into Siemens Purchase of Dresser-Rand; German Firm's $7.6 Billion Takeover of U.S. Oil-Equipment Maker Raises Competition Concerns
Author: Alessi, Christopher; Norman, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract:
BRUSSELS--European Union competition authorities said Friday they are opening an in-depth probe into Siemens AG's planned purchase of U.S. oil equipment maker Dresser-Rand Group Inc., even as the two companies said they expect the transaction to close by summer 2015.
Full text: BRUSSELS--European Union competition authorities said Friday they are opening an in-depth probe into Siemens AG's planned purchase of U.S. oil equipment maker Dresser-Rand Group Inc., even as the two companies said they expect the transaction to close by summer 2015. The launch of the second-phase investigation raises concerns the $7.6 billion deal could squeeze the number of suppliers in several markets. EU authorities said both companies produce turbo compressors as well as engines that drive these compressors. Together, the parts make up so-called turbo compressor trains, which are used mainly in the oil and gas distribution sector. "For turbo compressor trains driven by aero-derivative gas turbines, the commission has concerns that the proposed transaction may reduce competition for both components," the EU's antitrust unit said. An initial probe revealed that the main suppliers of the products are Siemens, along with a division of Rolls Royce Holdings PLC that it owns; Dresser-Rand; and General Electric, the commission said. The EU added there were also "possible competition concerns" in the market for small steam turbines of less than 5 Megawatts. "This may lead to less product variety and ultimately higher prices." the EU said. Siemens and Dresser-Rand both released statements saying they expect the deal to close this summer, if not earlier. Regulatory authorities in the U.S., Brazil, Canada, Russia, and South Korea have already approved the acquisition, Dresser-Rand said. Analysts said that both companies likely had been anticipating the EU investigation, which is why the closing date was already scheduled for this summer. Siemens announced plans to acquire the Houston-based company last September, months after it bought Rolls-Royce's civilian energy operations for $1.3 billion. The two deals are part of Siemens Chief Executive Joe Kaeser's strategy to shift the industrial conglomerate's focus more squarely into energy and benefit from the U.S. shale gas boom. Siemens manufactures gas turbines and supplies equipment, like compressors, for companies that extract natural gas. Dresser-Rand produces compressors, turbines, and other rotating equipment. The overlap between Siemens' and Dresser-Rand's industrial businesses in Europe is under 25%, according to analysts. The EU now has 90 working days, until June 19, to make a final decision on whether the deal is in line with European merger regulations. Write to Christopher Alessi at christopher.alessi@wsj.com and Laurence Norman at laurence.norman@wsj.com Credit: By Christopher Alessi And Laurence Norman
Subject: Acquisitions & mergers; Turbines; Competition; Natural gas
Location: United States--US
Company / organization: Name: General Electric Co; NAICS: 334512, 334519, 332510, 334290
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654967051
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654967051?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Dollar Falls on Weak U.S. Data; Consumer Spending Remains Lackluster Despite Drop in Oil Prices
Author: Ramage, James
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract: None available.
Full text: The dollar edged lower against the yen Friday as investors' views on U.S. consumer spending and economic growth have darkened, pushing back market expectations for higher interest rates by midyear. The U.S. currency fell 0.3% to ¥118.79 in late-afternoon trade, marking its second straight decline after dropping 1.1% on Thursday. The WSJ Dollar Index, which compares the dollar against a basket of widely traded currencies, declined 0.2% to a one-week low of 85.34. Investors soured on the dollar after the University of Michigan's preliminary February consumer sentiment index slid to a final January reading of 93.6 from 98.1. Economists had predicted the index, which measures U.S. consumer opinion on the economy, would inch up to a reading of 98.3. "The University of Michigan index really was not good at all," said Simon Derrick, chief market strategist at BNY Mellon. "It adds a little bit to the interest-rate expectations you've seen in the past couple of days, moderating slightly where people expect rates to be by year-end. That translates into a weaker dollar." Over the past two days, growth and consumption numbers have begun to dent investors' perceptions that stronger U.S. data would move the Federal Reserve to raise interest rates from near zero around midyear, and before rival central banks would. Higher rates in the U.S. make the dollar more attractive to investors as they boost returns on assets denominated in the currency. U.S. retail sales unexpectedly fell 0.8% last month after decreasing 0.9% in December, indicating that consumer spending has started slowly in 2015 even as plunging oil prices have padded shoppers' wallets. And two weeks ago, the Commerce Department reported that U.S. gross domestic product grew at a 2.6% pace in the last three months of 2014. To be sure, recent numbers showing robust job growth portray a U.S. labor market that has improved markedly, a segment of the economy the Fed monitors closely in considering when to increase U.S. rates. Fed funds futures, which investors use to bet on central-bank policy, showed Friday that investors and traders see a 41% likelihood of a rate increase in July, according to data from CME Group Inc. That compares with a 47% probability on Wednesday. In other trade, the euro traded flat against the dollar, at $1.1399. Write to James Ramage at james.ramage@wsj.com Credit: By James Ramage
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654973239
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654973239?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Two Libyan Oil Fields Attacked; Fresh Wave of Violence Targets Country's Vital Energy Sector
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]13 Feb 2015: n/a.
Abstract: None available.
Full text: Two Libyan oil fields were attacked on Friday, Libyan oil officials said, in a fresh wave of violence targeting the North African country's vital energy sector. The Libyan oil officials said guards repelled gunmen who assaulted the Bahi oil field operated by Waha Oil Co., a joint venture between the state-owned National Oil Co. and U.S. companies ConocoPhillips, Marathon Oil Corp. and Hess Corp. Meanwhile, the neighboring Mabruk oil field, operated by a Libyan joint venture with France's Total SA, was stormed, officials said. "Smoke is coming out of the Mabruk field," one official said. No one claimed responsibility for Friday's attacks. Mabruk was also assaulted on Feb. 3 in what Libyan officials described as a coordinated terrorist attack. Nine guards were killed and three workers were taken hostage, officials said. A group claiming to represent Islamic State took responsibility for that attack on Mabruk. Libya's oil production plunged by nearly a third from October to January as the country's oil fields were dragged into the country's escalating civil war. The latest attacks have stirred fears that the country's potentially lucrative energy sector is now a terrorism target. Write to Benoît Faucon at benoit.faucon@wsj.com Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 13, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1654976229
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1654976229?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Extends Gains; Brent Rises Above $60 --- Boost Comes From Encouraging Economic Data Out of Europe, Signals That Energy Companies Plan to Curtail Output
Author: Iosebashvili, Ira; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]14 Feb 2015: B.5.
Abstract:
The gains reflect investors' expectations that a global glut of oil will be shrinking soon, as energy companies cut production and economic growth spurs greater demand for gasoline and other crude products.
Full text: Oil prices rose, with Brent climbing above $60 a barrel for the first time this year, as improving economic data from Europe boosted hopes for an increase in the demand for crude. Brent, the global benchmark, jumped 3.8% to $61.52 a barrel on ICE Future Europe, its highest close since Dec. 23. The price of U.S. benchmark crude closed up 3.1% at $52.78 a barrel on the New York Mercantile Exchange. Both benchmarks rose for the third week in a row, posting their largest three-week percentage gains in nearly four years. Brent prices have risen 26% and Nymex crude has gained 16% since Jan. 23. The gains reflect investors' expectations that a global glut of oil will be shrinking soon, as energy companies cut production and economic growth spurs greater demand for gasoline and other crude products. Germany led an acceleration in eurozone economic growth in the final three months of 2014, data from the European Union's statistics agency showed Friday. The combined gross domestic product of the 18 eurozone countries grew 0.3% in the fourth quarter, beating analysts' estimates and offering oil bulls hope that demand from the region could increase. Oil prices also received a boost from reports that more energy companies will cut spending and trim jobs, an indication that they may be preparing to curtail production at a time when global oil supplies are outpacing demand. "We are preparing the company to face a long period of low oil prices," Patrick de la Chevardiere, chief financial officer at French oil major Total SA, said Thursday. Barclays estimates that company announcements this year indicate oil companies that combined account for nearly half of the world's oil-and-gas spending intend to spend 16% less on exploration and production in 2015. In addition, the number of drilling rigs seeking oil in the U.S. fell for a 10th week in a row to a three-year low of 1,056. The drop has yet to translate into a fall in oil production. The Energy Information Administration on Wednesday said the U.S. produced 9.2 million barrels of crude a day in the week ended Feb. 6, the highest since the government began tracking weekly oil output. The production numbers have weighed on oil bulls' recent enthusiasm, market watchers said. Oil prices have been up for nine of the past 12 sessions. Data showing that the number of active U.S. oil rigs fell by 84 in the week ended Feb. 13 failed to push oil to new gains on the day, as they had in previous weeks. "Ultimately, you will see a drift to the upside, but it's not something that's going to happen in the next week or so," said Robert Yawger, director of the futures division at Mizuho Securities USA. "There's plenty of supply out there." U.S. oil prices fell for seven consecutive months but are up 9.4% in February, rising on expectations of tighter supplies and a wave of cold weather in the Northeast. Some analysts believe the glut of supply will likely limit any further price gains in oil. "With declining rig counts in the U.S. unlikely to have much impact on production just yet, and seasonal demand weak, the rally in the oil price may falter soon," analysts at Capital Economics said in a note to clients. Nymex reformulated gasoline blendstock for March delivery, the benchmark contract, rose 1.9% to $1.6262 a gallon, its highest settlement since Dec. 10. Credit: By Ira Iosebashvili and Georgi Kantchev
Subject: Commodity prices; Crude oil
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Feb 14, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655064987
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655064987?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Blast Halts Flows at Libya's Largest Oil Field; Cause of Explosion Is Being Investigated, Says National Oil Co.
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]14 Feb 2015: n/a.
Abstract: None available.
Full text: A pipeline explosion has stopped flows from Libya's largest oil field, the nation's oil company said Saturday, warning it may have to stop all of its operations if attacks continue. The blast came after gunmen assaulted a U.S.-Libyan oil field Friday and less than two weeks after gunmen claiming to represent Islamic State killed nine guards and kidnapped at least three workers at a nearby Libyan-French facility. The explosion affected the pipeline from Sarir, until now the country's highest-producing oil field at about 200,000 barrels a day, said a spokesman for the state-owned National Oil Co. The field is operated by an NOC subsidiary. Libya's production level fell to about 325,000 barrels a day in January from almost 900,000 barrels in October. Production has been dented by an armed conflict between two rival governments and now oil officials fear foreign terrorist groups are eyeing the country's resources. The NOC spokesman said the fire--the cause of which was still being investigated--was still raging Saturday afternoon and that it could take a week before the pipeline restarts. He said, however, that exports from the Hariga terminal--which gets its oil from the pipeline--would continue using oil in storage. The Sarir oil field is located in central Libya, 500 kilometers (310 miles) from the capital, Tripoli, and in the same oil basin as the Makruk and Bahi oil fields that were attacked in recent days. Separately, NOC said an assault Friday on the Bahi field--operated by Waha Oil Co., a joint venture with U.S. companies ConocoPhillips, Hess Corp. and Marathon Oil Corp.--was carried out by the same attackers who allegedly killed nine guards last week at the nearby Mabruk field . That project is run by a partnership with France's Total SA. "The recurrence of such incidents would lead to the evacuation of technical manpower from the oil fields" run by the Waha Oil Co., NOC said on its website. Oil companies are facing difficulty securing workers and services as the sector becomes a target a violence. The number of "oil installations guards who are actually [in the] fields is not enough to protect them" despite the total number of guards on the payroll amounting to over 25,000, NOC added. A Libyan official said the vast majority of the guards either stay at home or may not even exist. Current production levels in Libya are no more than 25% of those in 2012. "If these incidents continue, the National Oil Co. would have to stop all operations in all oil fields," NOC added. Summer Said contributed to this article. Write to Benoît Faucon at benoit.faucon@wsj.com Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 14, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655105485
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655105485?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Train Carrying Crude Oil Derails in Ontario; Canadian National Has Deployed Firefighting, Environmental Crews to Scene
Author: King, Carolyn; Trichur, Rita
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Feb 2015: n/a.
Abstract:
A train carrying crude oil and operated by Canadian National Railway Co. derailed near the town of Timmins in northern Ontario just before midnight on Saturday, causing a fire but no reported injuries.
Full text: A train carrying crude oil and operated by Canadian National Railway Co. derailed near the town of Timmins in northern Ontario just before midnight on Saturday, causing a fire but no reported injuries. The train derailed in a remote wooded area, according to a spokesman for Montreal-based CN, Canada's largest railroad company. He said the railway company had deployed firefighting and environmental crews to the scene. The cause of the incident wasn't yet known, he said. "Our emergency crews continue to conduct a full site assessment to determine the number of rail cars derailed and involved in the fire, and if any product has been spilled," said CN spokesman Patrick Waldron in an emailed statement on Sunday afternoon. "Seventy-one cars of the 100-car train have been safely moved away from the derailment site. Early site assessments indicate that at total of 29 cars are involved in the incident. That same assessment indicates that seven cars of those 29 are involved in the fire," he added. Canada's transportation safety agency said separately that it had sent a team of investigators to the site of the derailment. It is believed that all of the train's 100 cars were carrying oil, said Rob Johnston, a spokesman for the Transportation Safety Board of Canada. The area did not require an evacuation, he added. The accident, however, disrupted passenger-rail service. VIA Rail said it was canceling trains running between Toronto and Winnipeg until the rail line was passable. "VIA Rail will provide alternate transportation to customers already en route or scheduled to board the train today, for those passengers travelling between Toronto and Winnipeg, in both directions," said VIA, a government-run company, in a release. The CN spokesman said the train was traveling eastbound and that CN was working to determine the cause of the derailment. Still, he noted the train "was visually inspected four times and passed over a wayside safety detector approximately 20 miles before the derailment with no issues identified." Added Mr. Waldron: "The track was last inspected visually Saturday morning, and with rail flaw detector and geometry test car within the last week." The transportation of oil by rail has soared in recent years amid the boom in North American oil production. The practice has come under intense scrutiny since an oil train derailed and exploded in a small town in Quebec in 2013, killing 47 people. There have been numerous other, non-deadly incidents since that one, which led Canadian and U.S. regulators to tighten multiple rules around the practice. Write to Carolyn King at carolyn.m.king@wsj.com and Rita Trichur at rita.trichur@wsj.com Credit: By Carolyn King And Rita Trichur
Subject: Railroad transportation; Aircraft accidents & safety; Railroad accidents & safety; Petroleum production
Location: Canada
Company / organization: Name: Canadian National Railway Co; NAICS: 926120, 482111; Name: VIA Rail Canada Inc; NAICS: 482111, 485999
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 15, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655189063
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655189063?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Libya Pipeline Explosion Called Sabotage; Fire at Country's Highest-Producing Oil field Is Contained
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]15 Feb 2015: n/a.
Abstract: None available.
Full text: Libyan oil officials have blamed saboteurs for blowing up a pipeline and stopping flows from the country's largest oil field. The fire from the Saturday explosion was extinguished on Sunday, the state-owned National Oil Co. said. The blast affected the pipeline from Sarir, until now the country's highest-producing oil field at 185,000 barrels a day, said the company on its website over the weekend. The blast came after gunmen assaulted a U.S.-Libyan oil field Friday and less than two weeks after gunmen claiming to represent Islamic State killed nine guards and kidnapped at least three workers at a nearby Libyan-French facility. The field attacked on Saturday is operated by an NOC subsidiary. Libya's production level fell to about 325,000 barrels a day in January from almost 900,000 barrels in October. Production has been dented by an armed conflict between two rival governments and now oil officials fear foreign terrorist groups are eyeing the country's resources. National Oil Co. officials said they may have to halt operations if attacks continue. Write to Benoît Faucon at benoit.faucon@wsj.com Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 15, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655196851
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655196851?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Edge Higher; Trading remains volatile as investors bet on an end to low prices
Author: Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Feb 2015: n/a.
Abstract:
According to Adam Longson, head of energy research at Morgan Stanley, strong refinery demand over the next couple of months as well as adequate global oil storage could help delay or prevent Brent from falling to the $20-$30 price level in the second quarter.
Full text: Oil prices edged up in volatile trade on Monday as investors continued to bet that the seven-month-long rout in prices is bottoming out. Brent, the global benchmark, has registered gains in the last three weeks and is up more than 30% from its mid-January low. But analysts caution that the combination of ample supplies and tepid demand that led to oil's dramatic slump last year shows little signs of abating. Brent for April delivery rose 1.1% to $62.20 a barrel on London's ICE Futures exchange after swinging between gains and losses earlier in the session. On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $53 a barrel, up 0.4% in electronic trading. U.S. markets are closed Monday for the Presidents Day public holiday, leading to less trade and more volatility, traders said. A weakness in the U.S. dollar helped support oil prices on Monday. The Wall Street Journal dollar index which tracks the greenback against a basket of global currencies fell 0.2%. Oil, a dollar-denominated commodity, becomes more attractive to holders of foreign currencies as the dollar depreciates. According to Adam Longson, head of energy research at Morgan Stanley, strong refinery demand over the next couple of months as well as adequate global oil storage could help delay or prevent Brent from falling to the $20-$30 price level in the second quarter. Some analysts, however, remain skeptical about the sustainability of the recent rally. Oil ended higher last week, with Brent gaining 4.8% and U.S. oil rising 2.1% on strong economic data from Europe and more cuts in the number of oil drilling rigs in the U.S. "The gains come at an odd time given that our crude oil balances suggest that the crude oversupply is only set to reach its peak in April and U.S. production continues to grow despite all the talk of spending cuts and lower rig rates," JBC Energy said in a note to clients. The latest oil rig count data released by Baker Hughes on Friday showed U.S. drillers idled 84 rigs last week to a three-year low of 1,056. The decline in the rig count, however, has yet to translate to a slowdown in oil output. The U.S. was producing 9.2 million barrels a day at the beginning of February, the highest since the government began tracking weekly oil output, the Energy Information Administration said last week. On Monday, Japan, one of the world's biggest oil consumers, said its economy has pulled out of recession in the final months of 2014, yet the rebound was smaller than expected. Gross domestic product grew at an annualized 2.2% in the fourth quarter, well below economists' expectations for a 3.6% rise. "We see the latest price rise as speculative, premature and unsustainable," Commerzbank wrote in a note. "A premature price increase could slow the necessary process of market "adjustment" and closure of production capacities in North America." Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 1.6% to $1.6527 a gallon, while ICE gasoil for March changed hands at $590 a metric ton, up $6.50 from Friday's settlement. Eric Yep contributed to this article. Write to Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Georgi Kantchev
Subject: Petroleum industry; Recessions; Crude oil prices
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: ICE Futures; NAICS: 523210; Name: Morgan Stanley; NAICS: 523110, 523120, 523920; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655219381
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655219381?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Taiwan Raises Growth Forecast for 2015; Though Lower Oil Prices Have Hurt Some Exports, Electronics Remain a Bright Spot
Author: Liu, Fanny
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Feb 2015: n/a.
Abstract:
Most Taiwanese-owned factories onshore and in China remain key suppliers of components, from microprocessors to casings to camera-lens, for mobile devices from tech titans such as Apple Inc. and Xiaomi Inc. Domestic employment and wages started rebounding last year as trade improved.
Full text: TAIPEI--Taiwan's government slightly raised its economic growth forecast for this year, but added that lower crude-oil prices have hurt some exports and offset growth in electronics shipments. Gross domestic product is forecast to expand 3.78% in 2015, the strongest in three years and up from previous forecast of 3.50%, the government said Monday. The economy grew 3.74% in 2014, it added, after raising fourth-quarter growth to 3.35% on year from 3.17%. As oil prices hover around multiyear lows, sluggish overseas demand for chemicals and fuel such as gasoline--which account for about a fifth of Taiwan's exports--likely will continue to offset growth in electronics this year, the government said. Exports are now expected to grow only 1.02% this year, compared with 2.74% last year and a previous estimate of 3.56%. On the other hand, a lower oil price also benefits Taiwan as the island imports almost all of its energy needs. The government now expects imports to drop 2.07% this year, compared with its previous estimate for a 3.43% growth. ANZ says a trade surplus would give the central bank room to stick with its accommodative monetary policy throughout this year. Rates have been consistently low for more than three years, and Standard Chartered said the central bank likely would stand pat on interest rates at least through September. The government expects electronics exports to hold up this year as the U.S.'s economic recovery feeds demand for gadgets. Most Taiwanese-owned factories onshore and in China remain key suppliers of components, from microprocessors to casings to camera-lens, for mobile devices from tech titans such as Apple Inc. and Xiaomi Inc. Domestic employment and wages started rebounding last year as trade improved. Household consumption is now expected to increase 3.12% this year, up from the government's previous estimate of 2.74%. Private investments will also grow 5.98% this year, compared with an earlier estimate of 5.59%. Inflation will remain benign this year as oil prices retreat. Taiwan's consumer-price index is forecast to edge up only 0.26% in 2015, down from 0.91% previously estimated. Write to Fanny Liu at fanny.liu@wsj.com Credit: By Fanny Liu
Subject: International trade; Consumer Price Index; Economic growth; Gross Domestic Product--GDP
Location: Taiwan
Company / organization: Name: Apple Inc; NAICS: 511210, 334111, 334220
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 16, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655229830
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655229830?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Europe's Oil Companies Get a Boost From Their Refineries; Refiners have benefited from lower costs for crude and a stronger appetite for their products
Author: Kent, Sarah; Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Feb 2015: n/a.
Abstract: None available.
Full text: LONDON--Amid the steepest downturn in crude prices in years, Europe's large oil companies are getting a boost from a previously unprofitable source: their refining businesses. It is a surprising, if likely temporary, shift in the fortunes of an industry in the midst of a broad contraction. Weak European demand for refined products and increasing competition from the Middle East, Asia and U.S. had hammered the Continent's refiners, resulting in a wave of bankruptcies and closures in recent years. But as oil prices have slumped, refiners have benefited from lower costs for crude. Meanwhile, Europeans have--for now--become hungrier for the refined products they make, such as oil for heating homes in the winter and lower-priced gasoline. In an otherwise gloomy earnings season, many oil companies' downstream businesses reported sharp increases in revenue at the end of last year, thanks to their refineries. From French oil major Total SA to Anglo-Dutch crude giant Royal Dutch Shell PLC, Europe's big oil companies recorded improved bottom lines amid strong refining results in the fourth quarter. "It's a buffer," said Oswald Clint, an oil analyst at research and brokerage firm Sanford C. Bernstein. Integrated oil companies--which explore for crude, pump it, refine it and then sell it to consumers--were left with a "nice umbrella of profit," he said. Though Total reported a net loss of $5.66 billion for the fourth quarter, earnings from the company's refining and chemicals division more than doubled compared with a year earlier. Earnings from Shell's downstream segment, which includes its refining business, more than tripled in the fourth quarter . And Statoil SA of Norway said refineries were one of the main reasons for a 38% increase in adjusted earnings at its marketing, processing and renewable-energy division in the fourth quarter. The respite isn't expected to last long. Demand for refined products is seasonal, and the appetite for some products such as heating oil might diminish in the spring. Overall, Europe's refining sector remains under pressure from anemic demand, fueled by high taxes and energy-efficiency laws. The region's demand for refined products declined almost 2% in the past year, according to data from the International Energy Agency, and is expected to continue to contract. The industry is also facing competition from newer, more sophisticated export-oriented refineries--including two sizable plants that opened in the Middle East earlier this year--and plants in the U.S. that have benefited from comparatively cheap crude oil in recent years thanks to the shale-led surge in North American output. When crude prices stabilize, the refinery situation could snap back quickly to the old days of hardship. Europe had lost more than two million barrels of a day of refining capacity since the financial crisis of 2008, according to the IEA. "This is very much a temporary thing," said Marcel van Poecke, managing director of Carlyle International Energy Partners, an energy-focused fund that has invested in refineries in Switzerland and Germany. Despite the strong performance of its refining segment last quarter, Total intends to halve the capacity at its 207,000-barrel-a-day Lindsey refinery in the U.K. this year and will announce a new plan for its refining activities in France this spring. The company said in its fourth-quarter report that refining over capacity remained an issue in Europe. "About 10% of capacity needs to come out of the European industry," Total Chief Financial Officer Patrick de La Chevardière said in an interview. Another question mark is weakening demand for refined products. The IEA expects that Europe's demand for oil will decline 4% between 2014 and the end of the decade, and better energy efficiency and environmental laws could force it down further. "You could be chasing a moving target," Mr. de La Chevardière said. Last year alone, Europe lost 245,000 barrels a day of refining capacity, according to the IEA. Wood Mackenzie estimates that at least 800,000 to one million barrels a day more of refining capacity will need to close in Europe over the next five years, based purely on weakening demand. "When you're looking at a day's worth of cloud, if you even see a hint of blue sky it's hooray," said Damian Kennaby, director of research at Colorado-based consultancy IHS Inc. However, the recent slump in oil prices has only provided Europe's refiners with some breathing space. "It's not happy days are here again," he added. Write to Sarah Kent at sarah.kent@wsj.com and Selina Williams at selina.williams@wsj.com Credit: By Sarah Kent and Selina Williams
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 16, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655288378
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655288378?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Black Swans on the Horizon; Saudi Arabia may be targeting oil consumers, not just rival producers
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Feb 2015: n/a.
Abstract:
[...]a cooling Chinese economy and the impact of lower oil prices on the economies of oil-producing countries eats into growth from emerging markets.
Full text: Next week sees the one-year anniversary of Uber's ride-sharing service arriving in Riyadh. Disruption is creeping up on Saudi Arabia and the global oil market on which it relies. So far, this has centered on supply: North America's shale boom has upended expectations of ever-increasing dependence on Middle Eastern crude. But Saudi Arabia's oil minister, Ali al-Naimi, is also worried about the other side of the equation. At a conference last month, he asked: "Is there a black swan that we don't know about which will come by 2050 and we will have no demand?" Against the backdrop of oil's recent plunge, Mr. al-Naimi was thinking of potentially disruptive trends including new technology and efforts to cut carbon emissions. This might seem overdone. Last week, the International Energy Agency released medium-term forecasts showing global oil consumption rising by 6.6 million barrels a day by 2020. Beneath the headline, though, the story is changing. Compared with 2014's forecast, the agency cut one million barrels a day on average from estimates for the next five years. That may not sound like much, but consider that excess supply weighing heavily on prices now is estimated to be only around 1.5 million barrels a day. Perhaps more importantly, the mix of demand is changing, too. Three years ago, the IEA projected global demand would grow by 3.86 million barrels a day between 2015 and 2017. Of that, 79% came from so-called BRIC countries--Brazil, Russia, India and China--and the Middle East. The latest forecast cut that growth estimate and now only 63% is set to come from those regions. The IEA sees the U.S. playing a bigger role. From 2008 through 2014, its annual medium-term forecasts always projected a five-year decline in U.S. oil consumption. Now, U.S. demand is seen rising by 380,000 barrels a day by 2019. This makes sense given a recovering U.S. economy and Americans' predilection for bigger vehicles when gas is cheaper. Meanwhile, a cooling Chinese economy and the impact of lower oil prices on the economies of oil-producing countries eats into growth from emerging markets. The shift should worry oil producers. The U.S. response to lower gas prices won't match that of the late 1980s and 1990s. Then, the prime working- and driving-age population was still growing strongly and hybrid and electric vehicles were largely unavailable. The IEA still expects U.S. demand to peak in 2019. Oil intensity in terms of barrels per dollar of gross domestic product is set to continue falling in the U.S., and at an even faster pace in China. At 1.16%, compound annual growth of global demand in the IEA's latest medium-term forecast is the weakest since 2009. Big Oil struggles to conceive of a world where demand growth slows to a trickle or stops. Exxon Mobil sees global demand hitting about 117 million barrels a day in 2040. Yet back in 2007 it saw that level being reached in 2030. And even Exxon can be blindsided. Its strategy in this century's first decade implicitly assumed relatively cheap oil and the U.S. needing ever-rising imports of oil and natural gas. That turned out to be utterly wrong. Similarly, prevailing assumptions such as improvements in batteries for electric vehicles advancing very slowly or that everyone in emerging markets will own a gas guzzler (rather than, say, using something like Uber) may prove myopic. New technologies, whether mobile phones, flat-screen televisions, or even shale fracking, are nascent until, suddenly, they aren't and rapidly replace what came before. Multidecade oil projects requiring high break-even prices--such as Canada's oil sands--look especially vulnerable if demand patterns change. Oil's sheer volatility, along with its geopolitical and environmental baggage, provides powerful incentives to use less of it. Saudi Arabia's current strategy appears aimed at making rival producers sweat. Equally, it may represent a concerted effort to court consumers faced with a small but rapidly growing set of alternative choices. Write to Liam Denning at liam.denning@wsj.com Credit: By Liam Denning
Subject: Petroleum industry; Supply & demand; Oil consumption; Electric vehicles; Natural gas; Economic growth; Gross Domestic Product--GDP; Emerging markets; Ride sharing services
Location: United States--US China Riyadh Saudi Arabia North America Saudi Arabia
People: Naimi, Ali I
Company / organization: Name: International Energy Agency; NAICS: 928120
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 16, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655291963
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Tanker Derails In West Virginia, Triggering Evacuations; At least one tanker falls into Kanawha River, governor declares state of emergency
Author: Maher, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]16 Feb 2015: n/a.
Abstract:
At least one tanker car, and possibly more, fell into the river, prompting concerns about potential contamination of water-treatment facilities that serve two small downstream communities, said Lawrence Messina, a spokesman for the West Virginia Department of Military Affairs and Public Safety.
Full text: State police evacuated residents of Mount Carbon, W.V., a small town near the capital of Charleston Monday, after a train carrying crude oil derailed, causing a house to catch fire and oil to leak into the Kanawha River. At least one tanker car, and possibly more, fell into the river, prompting concerns about potential contamination of water-treatment facilities that serve two small downstream communities, said Lawrence Messina, a spokesman for the West Virginia Department of Military Affairs and Public Safety. Lt. Michael Baylous, a spokesman for the state police, said residents within a half mile of the scene were told to evacuate until further notice. A shelter had been set up at a nearby elementary school. He said the train caught fire before destroying a nearby home. West Virginia Gov. Earl Ray Tomblin declared a state of emergency in Fayette County and neighboring Kanawha County Monday evening, saying he was doing so to ensure that affected residents had access to any resources they might need. Gary Sease, a spokesman for CSX Corp., which operated the train, said at least one railcar appeared to have ruptured and caught fire. He said one person was being treated for "potential inhalation" but no other injuries were reported. Mr. Sease said the company was working with the Red Cross and other relief organizations to address the needs of residents who had been evacuated, including providing shelter amid unusually cold temperatures. He said the company was trying to help put out the fire, determine how many cars had derailed and deploy environmental monitoring, including in the river. The train consisted of two locomotives and 109 railcars and was traveling from North Dakota to Yorktown, Va., Mr. Sease said. It wasn't clear what caused the derailment. State officials believe the train derailed at about 1:30 p.m. Monday along the Kanawha River about 30 miles from Charleston, near Mount Carbon, W.Va., which has about 400 residents. State health officials said the intakes for water systems that serve Montgomery, W.V., and Cedar Grove, W.Va., would be shut as a precaution. One facility is operated by West Virginia American Water, whose treatment plant was contaminated early last year by a chemical spill on the Elk River near Charleston that disrupted water service for 300,000 residents. "We're obviously very mindful of that, and the Department of Health and Human Resources is responding because of the potential threat to drinking water," Mr. Messina said. Laura Jordan, a spokeswoman for West Virginia American Water, said the Montgomery water system serves about 2,000 customers. The company has asked residents to conserve water. Under normal use, the system has enough water to keep pipes pressurized for about 12 hours, she said. Ms. Jordan said the water company doesn't believe the oil spill has affected its water plant, but it is working with state officials to determine when its water intake can be reopened. Each week, about three to four trains carrying crude oil travel through Fayette County where the accident occurred, according to a Wall Street Journal analysis late last year of records submitted by railroads to state officials. Write to Kris Maher at kris.maher@wsj.com Credit: By Kris Maher
Subject: Water utilities; Railroad accidents & safety; Rivers
Location: Kanawha River
Company / organization: Name: West Virginia-American Water Co; NAICS: 221310; Name: CSX Corp; NAICS: 482111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 16, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655311508
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655311508?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Tanker Derails In West Virginia, Triggering Evacuations; At least one tanker falls into Kanawha River, governor declares state of emergency
Author: Maher, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
Each week, about three to four trains carrying crude oil travel through Fayette County where the accident occurred, according to a Wall Street Journal analysis late last year of records submitted by railroads to state officials.
Full text: A train carrying crude oil derailed and burst into a fireball in rural West Virginia on Monday, forcing residents to evacuate and sending oil leaking into a river. At least one tanker car, and possibly more, fell into the Kanawha River, some 30 miles from the state capital of Charleston. That prompted concerns about potential contamination of water-treatment facilities that serve two small downstream communities, according to Lawrence Messina, a spokesman for the West Virginia Department of Military Affairs and Public Safety. At least 14 tankers caught fire, according to Jennifer Sayre, Kanawha County manager. Lt. Michael Baylous, a spokesman for the state police, said residents within a half mile of the scene, in Mount Carbon, were told to evacuate until further notice. A shelter had been set up at a nearby elementary school. He said the train caught fire before destroying a nearby home. West Virginia Gov. Earl Ray Tomblin declared a state of emergency in Fayette County and neighboring Kanawha County Monday evening, saying he was doing so to ensure that affected residents had access to any resources they might need. Gary Sease, a spokesman for CSX Corp., which operated the train, said one person was being treated for "potential inhalation" but that no other injuries were reported. He said the company was working with the Red Cross and other relief organizations to address the needs of residents who had been evacuated, including providing shelter amid unusually cold temperatures. The train consisted of two locomotives and 109 rail cars and was traveling to Yorktown, Va., from North Dakota, Mr. Sease said. He said the company was working to help put out the fire, determine how many cars had derailed and deploy environmental monitoring, including in the river. It wasn't clear what caused the derailment. State officials believe the train derailed at about 1:30 p.m. Monday near Mount Carbon, which has about 400 residents. State health officials said the intakes for water systems that serve Montgomery and Cedar Grove, W.Va., would be shut as a precaution. One facility is operated by West Virginia American Water, whose treatment plant was contaminated early last year by a chemical spill on the Elk River near Charleston that disrupted water service for 300,000 residents. "We're obviously very mindful of that, and the Department of Health and Human Resources is responding because of the potential threat to drinking water," Mr. Messina said. Laura Jordan, a spokeswoman for West Virginia American Water, said the Montgomery water system serves about 2,000 customers. The company has asked residents to conserve water. Under normal use, the system has enough water to keep pipes pressurized for about 12 hours, she said. Ms. Jordan said the water company didn't believe the oil spill affected its water plant, but it was working with state officials to determine when its water intake could be reopened. Each week, about three to four trains carrying crude oil travel through Fayette County where the accident occurred, according to a Wall Street Journal analysis late last year of records submitted by railroads to state officials. Write to Kris Maher at kris.maher@wsj.com Credit: By Kris Maher
Subject: Water utilities; Railroad accidents & safety
Location: Kanawha River West Virginia
Company / organization: Name: West Virginia-American Water Co; NAICS: 221310; Name: CSX Corp; NAICS: 482111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655362809
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655362809?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. News: Derailment Spurs Evacuations --- Train carrying crude oil falls into West Virginia river, prompting concern over water supply; state of emergency declared
Author: Maher, Kris
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]17 Feb 2015: A.3.
Abstract:
Ms. Jordan said the water company didn't believe the oil spill affected its water plant, but it was working with state officials to determine when its water intake could be reopened.
Full text: A train carrying crude oil derailed and burst into a fireball in rural West Virginia on Monday, forcing residents to evacuate and sending oil leaking into a river. At least one tanker car, and possibly more, fell into the Kanawha River, some 30 miles from the state capital of Charleston. That prompted concerns about potential contamination of water-treatment facilities that serve two small downstream communities, according to Lawrence Messina, a spokesman for the West Virginia Department of Military Affairs and Public Safety. At least 14 tankers caught fire, according to Jennifer Sayre, Kanawha County manager. Lt. Michael Baylous, a spokesman for state police, said residents within a half mile of the scene, in Mount Carbon, were told to evacuate until further notice. A shelter had been set up at a nearby elementary school. He said the train caught fire before destroying a nearby home. West Virginia Gov. Earl Ray Tomblin declared a state of emergency in Fayette County and neighboring Kanawha County Monday evening, saying he was doing so to ensure that affected residents had access to any resources they might need. Gary Sease, a spokesman for CSX Corp., which operated the train, said one person was being treated for "potential inhalation" but that no other injuries were reported. He said the company was working to contain oil found in a creek that runs parallel to CSX tracks, and was working with the Red Cross and other relief organizations. The train consisted of two locomotives and 109 railcars and was traveling to Yorktown, Va., from North Dakota, Mr. Sease said. He said the company was working to help put out the fire, determine how many cars had derailed and deploy environmental monitoring, including in the river. It wasn't clear what caused the derailment. State officials believe the train derailed at about 1:30 p.m. Monday near Mount Carbon, which has about 400 residents. State health officials said the intakes for water systems that serve Montgomery and Cedar Grove would be shut as a precaution. One facility is operated by West Virginia American Water, whose treatment plant was contaminated early last year by a chemical spill near Charleston that disrupted water service for 300,000 residents. "We're obviously very mindful of that, and the Department of Health and Human Resources is responding because of the potential threat to drinking water," Mr. Messina said. Laura Jordan, a spokeswoman for West Virginia American Water, said the Montgomery water system serves about 2,000 customers. The company has asked residents to conserve water. Under normal use, the system has enough water to keep pipes pressurized for about 12 hours, she said. Ms. Jordan said the water company didn't believe the oil spill affected its water plant, but it was working with state officials to determine when its water intake could be reopened. Credit: By Kris Maher
Subject: Water utilities; Water treatment; Evacuations & rescues; Railroad accidents & safety
Location: Kanawha River West Virginia
Company / organization: Name: West Virginia-American Water Co; NAICS: 221310; Name: CSX Corp; NAICS: 482111
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.3
Publication year: 2015
Publication date: Feb 17, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655470897
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655470897?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Settle Higher; Analysts expect the global market to stay oversupplied through the first half of the year
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
[...]oil exports from the south of Iraq totaled 1.5 million barrels a day in the first 10 days of February, which is 900,000 barrels a day lower than in January, and less than half of the country's target for this month, Commerzbank said in a note.
Full text: NEW YORK--Oil prices gained Tuesday, reversing earlier losses, as traders weighed concerns about Iraqi and Libyan production against an oversupplied market. Light, sweet crude for March delivery settled up 75 cents, or 1.4%, at $53.53 a barrel on the New York Mercantile Exchange, the highest settlement since Dec. 30. Brent, the global benchmark, rose $1.13, or 1.8%, to $62.53 a barrel on ICE Futures Europe. Oil prices have plunged since June as ample global supply growth outweighed tepid demand, and many analysts expect the market to stay oversupplied through the first half of the year. However, recent violence and bad weather has affected output from Libya and Iraq, two major oil producers. Egyptian airstrikes against Islamic State targets in Libya have added to the turmoil in the country, already reeling from sabotage of its oil infrastructure amid the armed conflict between two rival governments claiming to run Libya. JBC Energy estimates that the Libyan oil output has fallen to as low as 150,000 barrels a day, down from almost 900,000 barrels in October. In Iraq, one of the biggest Middle Eastern oil producers, bad weather has hit crude exports. As a result, oil exports from the south of Iraq totaled 1.5 million barrels a day in the first 10 days of February, which is 900,000 barrels a day lower than in January, and less than half of the country's target for this month, Commerzbank said in a note. In the U.S., traders remained focused on a growing glut of oil. Stockpiles have risen for five straight weeks to a record high of 417.9 million barrels as of Feb. 6, according to weekly data from the U.S. Energy Information Administration dating back to 1982. In Cushing, Okla., a key storage hub and the delivery point for the Nymex contract, supplies have climbed for 10 straight weeks. "The U.S. is absorbing the bulk of the surplus," said Christopher Main, analyst at Citigroup Inc. "All the crude has basically wound up in the U.S. market." Demand for U.S. crude typically falls in the early spring as refiners shut units for seasonal maintenance. The Nymex crude-oil options contracts for March expired at settlement Tuesday, adding further volatility to the day's price moves as traders closed out positions, analysts said. Gasoline futures fell 3.61 cents, or 2.2%, to $1.5901 a gallon. Diesel futures gained 0.60 cent, or 0.3%, to $1.9774 a gallon, the highest settlement since Dec. 23. Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman And Georgi Kantchev
Subject: Petroleum industry; Crude oil prices; Price increases; Futures
Location: United States--US Libya Iraq
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210; Name: Citigroup Inc; NAICS: 551111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655504281
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655504281?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
China Considering Mergers Among Its Big State Oil Companies; Government economic advisers are conducting a feasibility study of options for consolidation
Author: Wei, Lingling; Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
BEIJING--China is considering forging megamergers among its big state oil companies, seeking to create new national champions able to take on the likes of Exxon Mobil Corp. and produce greater efficiencies at a time of low prices. Late last year, the government announced a plan to merge the country's top two state-owned railcar makers with a goal of making the combined company capable of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies--CNPC, Sinopec, Cnooc and Sinochem--have long dominated every phase of the industry; for years each had a geographic or business area of specialty.
Full text: BEIJING--China is considering forging megamergers among its big state oil companies, seeking to create new national champions able to take on the likes of Exxon Mobil Corp. and produce greater efficiencies at a time of low prices. At the request of China's leadership, government economic advisers are conducting a feasibility study of options for consolidation, according to officials with knowledge of the research. One involves potentially combining the country's largest oil companies, China National Petroleum Corp., or CNPC, and its main domestic rival, China Petrochemical Corp., or Sinopec, the officials said. Other options look at merging two other major energy companies, China National Offshore Oil Corp., or Cnooc, and Sinochem Group. No timetable has been set for a decision on whether or when to proceed with the various proposed mergers, said the officials. Spokespeople for the four Chinese oil companies and the State-owned Assets Supervision and Administration Commission, which oversees the largest state enterprises, declined to comment or didn't respond to queries. The possible mergers would be the latest consolidation of state companies blessed by the government as it tries to regear a slowing economy for a new phase of growth. As part of that effort, President Xi Jinping, now more than two years in office, is trying to revamp major state firms to make them more competitive globally. Though the government has taken some tentative steps to allow more private and foreign capital to flow into infrastructure, resources, banking and other areas long the preserve of state firms, Mr. Xi has said state companies remain an "important pillar of the national economy." The government "must ensure they thrive," Mr. Xi said in remarks in August. Bigger and stronger state companies, according to officials and scholars familiar with the leadership's thinking, are viewed by Mr. Xi as key to China's reclaiming its prominence in the world. Mergers could also boost efficiencies in an economy increasingly burdened by excess capacity--a problem that has caused Chinese manufacturers to compete against one other by cutting prices. Late last year, the government announced a plan to merge the country's top two state-owned railcar makers with a goal of making the combined company capable of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies--CNPC, Sinopec, Cnooc and Sinochem--have long dominated every phase of the industry; for years each had a geographic or business area of specialty. For instance, CNPC focused on exploration and production, and Sinopec on refining. Over the past 15 years, in response to earlier reform plans to spur competition, they' have expanded into the others' turf, creating overlapping operations that span exploration, refining to running gas pumps. "They're increasingly fighting among each other," said one of the officials with knowledge of the consolidation plan. "That has led to lots of waste and inefficiency." With international oil prices having halved in less than a year, those problems have become more pronounced, giving reform new urgency. Combining and then streamlining the operations of the major Chinese oil producers could help reduce waste caused by redundant staff and projects, the officials said. A combined enterprise could then focus on building up a better-funded company to compete around the world. Low oil prices have spurred talk of new deals activity across the globe, as stronger companies engage in opportunistic buying of weaker firms. Among big deals last year, Spain's Repsol SA agreed to acquire Canadian oil-and-gas producer Talisman Energy Inc. for $8.3 billion. "We want to create a big Chinese brand to better compete overseas," the Chinese official said. "We want our own Exxon Mobil." The potential shake-up would cap what has been a tumultuous period for China's oil industry. Chinese oil giants--in particular CNPC--have been the focus of an antigraft campaign championed by President Xi. Leading industry executives have been detained for suspected graft, and added scrutiny has helped spur a huge pullback in new investment by wary executives. A decision to consolidate China's oil sector by making big state firms even bigger could end up tamping competition at home and stymie market-oriented reforms, some analysts said. It is unclear whether a possible consolidation would be followed by reforms, such as lowering barriers that have marginalized independent oil-and-gas producers. "If you are focused on the foreign market, you certainly want to consolidate because it's more competitive abroad," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "But if just for the domestic market it's better to have more competition, because competition leads to efficiency." Beijing has started inviting private capital into the oil industry. Sinopec last year sold a nearly 30% stake in its retail sales-and-marketing unit to a group of 25 investors, mostly Chinese. But none of the initiatives involves selling a controlling stake to the private sector. A bigger challenge is whether the government would allow the combined entities to improve performance by reducing their huge workforces or shedding assets, said Philip Andrews-Speed, an expert on energy governance in China at the National University of Singapore. "That will be the test of whether this is old state-ism ... or are they really looking for better performance," he said. PetroChina Co., the listed arm of CNPC, has nearly 550,000 employees world-wide, more than seven times as big as Exxon Mobil Corp. The Chinese company delivered revenue of $361 billion in 2013, compared with more than $420 billion in sales and other revenue at Exxon. These days, all of China's big oil companies have been under pressure from prices and from the government to cut costs and focus on improving returns. For example, Cnooc Ltd., the listed unit of China National Offshore Oil, says it will cut capital spending by as much as 35% in 2015 as a result of falling global oil prices. Expenditures at PetroChina and Sinopec are also expected to fall this year. Marrying CNPC and Sinopec would create one of the world's biggest companies. A combined entity at least in the short run could control a vast majority of China's onshore oil-and-gas production and would hold total assets of hundreds of billions of dollars. In the case of Cnooc, a merger with Sinochem, would give it more refining operations, giving it more sources of revenue that over time could help shield it against oil-market volatility. Cnooc is regarded by analysts as the most vulnerable to the oil-and-gas price drop, in part because it expanded aggressively abroad, buying assets including Canadian oil-sands operator Nexen Inc. for $15.1 billion in 2013 when prices were high. Write to Lingling Wei at lingling.wei@wsj.com and Brian Spegele at brian.spegele@wsj.com Credit: By Lingling Wei And Brian Spegele
Subject: Petroleum industry; Competition; Feasibility studies; Reforms
Location: China
Company / organization: Name: China Petrochemical Corp; NAICS: 324110; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: Bombardier Inc; NAICS: 336411, 336510, 336999, 551112; Name: Siemens AG; NAICS: 334517, 334210, 334220; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655511834
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655511834?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Train That Derailed in West Virginia Had Modern Tanker Cars Hailed as Safe; Incident near Mount Carbon ratchets up debate over rule changes that could call for expanded safeguards for crude-oil trains
Author: Gold, Russell; Maher, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
A CSX Corp. train with more than 100 tanker cars en route from North Dakota to Yorktown, Va., derailed Monday afternoon along the Kanawha River about 30 miles outside the state capital of Charleston, causing explosions that sent fireballs hundreds of feet into the air, burned at least one home and sent crude oil into the river.
Full text: The crude-oil train that derailed and exploded in West Virginia on Monday consisted of modern tanker cars the rail industry has hailed as safe, ratcheting up the debate over proposed federal rules that could require even stronger safeguards. The derailment near Mount Carbon, a small community outside the state capital of Charleston, launched fireballs into the sky, leaked crude into a creek and fueled fires that were still burning Tuesday. One person was treated for possible respiratory problems and released, according to CSX Corp., which operated the train, and one home burned to the ground. Several hundred people were evacuated and many were unable to return to their homes Tuesday. State officials initially said at least one tanker car had fallen into the Kanawha River, but Tuesday they said that no longer appeared to be the case. The amount of crude oil moving on the nation's railroads has skyrocketed in recent years. In 2009, U.S. railroads transported about 21,000 barrels of oil a day. Today they carry more than 50 times that amount, according to federal data, as fracking-fueled oil production in North Dakota outpaced pipeline capacity and trains became the easiest way to get crude to refineries. At the same time, a spate of crude-oil explosions has frightened people who live along tracks and caught the attention of regulators. In the most serious incident, a train derailed in Lac-Mégantic, Quebec, killing 47 people. Federal regulators last year proposed rule changes to make crude-oil transport by rail safer. The White House is considering the changes, according to a Federal Railroad Administration spokesman, and is expected to issue final rules in coming months. One proposed version of the rules required using the same CPC-1232 tanker cars that exploded in West Virginia. Another version would require a stronger tank car. Tank-car manufacturers support requiring thicker shells and other protections, but the oil industry worries that implementing changes too quickly could slow the U.S. energy boom. "We think we can reduce the magnitude of these incidents, in part with a safer tank car," said Jack Isselmann, a senior vice president of Greenbrier Cos., an Oregon-based tanker-car maker. But he said orders were slow because leasing companies were waiting for the final federal rule, expected to set standards for new tank cars as well as a timetable for retrofits. The train that derailed was traveling from North Dakota to Yorktown, Va., a CSX spokesman said. Most of the oil carried by rail originates in North Dakota, but the exact routes aren't disclosed. Rail companies including CSX have filed lawsuits to prevent states from publicizing them. However, a Wall Street Journal analysis of state data created a detailed picture of how crude oil moves through this new virtual pipeline. The train that derailed came through Chicago, then headed south through Ohio and into West Virginia. It was scheduled to cross Virginia and deliver about 70,000 barrels of crude to a terminal in Yorktown. In April, a CSX train on the same route derailed in Lynchburg, Va. Monday's derailment and explosions terrified local residents. Morris Bounds Jr., a 44-year-old general contractor, said he was sitting in his living room in Mount Carbon when he heard a series of booms that shook the ground like an earthquake. His father, who lives 400 yards away, called and frantically told him a train had derailed next to his house. Mr. Bounds hopped in his pickup truck and sped toward his father's home. Before he got there, he saw his father running barefoot through the snow. Behind him, flames were leaping from spilled-over tanker cars, and his father's home was already burning. "It was like a horror movie trying to get to him," Mr. Bounds said. "I had seen cars piled up and flames shooting through them. He was just running for his life." Mr. Bounds said he was relieved his mother wasn't in the house. She is recovering from heart surgery and was readmitted to the hospital with the flu, Mr. Bounds said, adding that he believed had she been in the house, she would have died. He said she was glad to be alive but upset at having lost all her possessions. Within a minute or so of driving away, the two men saw the tankers begin to explode, sending shock waves through the air and huge balls of flames that rose against the mountains. "Everything they owned was there," he said of his parents' home. But, he added: "I got him out of there safely." Write to Russell Gold at russell.gold@wsj.com and Kris Maher at kris.maher@wsj.com Credit: By Russell Gold and Kris Maher
Subject: Crude oil
Location: Kanawha River West Virginia North Dakota
Company / organization: Name: West Virginia-American Water Co; NAICS: 221310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655543634
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655543634?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Dragon Oil Eyes Acquisitions in 2015 -- CEO; Dubai-based Dragon has $1.98 billion in cash and no debt
Author: Williams, Selina
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
The increase would make it the fifth largest U.K.-listed oil company by output, close behind Tullow Oil PLC . Even before oil prices fell, share prices in London's once-popular exploration and production sector were declining as investors had tired of disappointing drilling results and concerns regarding whether small firms can finance big projects when they do find oil.
Full text: LONDON--Cash-rich Dubai-based oil producer Dragon Oil PLC is hoping to make acquisitions this year amid signs that deal-making activity could be stirring in London's overcrowded oil exploration and production sector despite continued volatility in oil prices. Dragon, which is listed in both London and Dublin, has long sought to diversify beyond its current reliance on Turkmenistan where it has one, albeit successful, producing offshore oil and gas asset. "We're still looking and hoping that we can do something this year," Dragon Chief Executive Abdul Jaleel Al Khalifa said in an interview Tuesday. The decline in oil prices , which have fallen around 50% since last June and are currently trading around $62 a barrel in London, have made many other companies available now, he added, but declined to give any names. Dragon, which has $1.98 billion in cash and cash equivalents and no debt, wants to acquire around 30,000 to 50,000 barrels a day production, either by buying a company and or assets in countries including Algeria, Egypt, Kazakhstan and South East Asia, Mr. Khalifa said. Such a deal could take Dragon's net daily oil production, which was around 44,000 barrels a day in 2014, up to around 95,000 barrels a day. The increase would make it the fifth largest U.K.-listed oil company by output, close behind Tullow Oil PLC . Even before oil prices fell, share prices in London's once-popular exploration and production sector were declining as investors had tired of disappointing drilling results and concerns regarding whether small firms can finance big projects when they do find oil. Still, despite consolidation potential among the sector's more than 100 companies, volatility in the oil market has meant that mooted transactions have been thin on the ground. Last December, Dragon pulled out of talks with Irish minnow Petroceltic International PLC, citing the steep decline in oil prices and uncertainty about long-term prices for crude. Mr. Khalifa said he couldn't rule out another approach for Petroceltic, which has assets in Kurdistan. Earlier Tuesday, Dragon reported a 27% rise in net profit for 2014 to $650.53 million and said it exited the year with gross production at 92,008 barrels a day. The company forecast production growth of around 10% or higher this year to take gross production up to 100,000 barrels a day by the end of the year. Dragon has lifting costs of around $6 to $8 a barrel at its Cheleken oil field in the Caspian Sea offshore Turkmenistan. Including operating costs, capital expenditure, tax and marketing, Dragon breaks even at a $60 a barrel oil price, Mr. Khalifa said. Dragon also has exploration blocks in the Philippines, North Africa and Iraq. Write to Selina Williams at selina.williams@wsj.com Credit: By Selina Williams
Subject: Petroleum industry; Oil exploration; Energy policy; Prices; Petroleum production
Location: Turkmenistan
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: News
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655543845
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655543845?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Beijing's Step Back With Big Oil; Merging China's National Oil Companies Would Be Retrograde Move
Author: Denning, Liam
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
Beijing is considering mergers for its state-controlled oil giants, such as China National Petroleum Corp., or CNPC, The Wall Street Journal reported Tuesday.
Full text: If Exxon Mobil didn't exist, would you invent it? China may be in the "yes" camp--which is a curiously retro position in today's oil industry. Beijing is considering mergers for its state-controlled oil giants, such as China National Petroleum Corp., or CNPC, The Wall Street Journal reported Tuesday. PetroChina, CNPC's listed arm, alone is worth north of $300 billion. Energy bankers will no doubt turn misty-eyed at the prospect of a late-1990s-style round of megamergers, exemplified by Exxon's takeover of Mobil. But the world has moved on. While investors have sought refuge in Big Oil stocks amid the recent slump in prices, Small Oil has been much more in favor in recent years. Marathon Oil and ConocoPhillips split into separate upstream and downstream firms in 2011 and 2012, respectively. The resulting entities have, in terms of growth in combined market value, far outstripped Exxon and PetroChina. One reason is simply that smaller companies offer a better chance of growth. The supermajors have, in general, struggled to increase their output: Exxon's oil production last year was the lowest since the merger with Mobil. Supesized deals can merely compound the issue that keeps Big Oil executives up at night: how to replace all those millions of barrels that get pumped out of the ground each day. And when it comes to the industry's biggest development, the shale boom, this has been the preserve of many smaller exploration-and-production companies scrapping it out to become the nimblest, most productive operators. That is why Exxon eventually felt the need to pay top dollar for XTO Energy in 2010. It is also why China, estimated to hold the world's biggest combined oil and gas shale reserves, would risk hindering rather than helping its national champions by forcing them to merge. Write to Liam Denning at liam.denning@wsj.com Credit: By Liam Denning
Subject: Petroleum industry; Acquisitions & mergers; Petroleum production
Location: Beijing China China
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: XTO Energy Inc; NAICS: 211111; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655567969
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655567969?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Muddies U.S. Economic Picture; Cheap Energy Provides a Mixed Blessing
Author: Lahart, Justin
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
[...]any energy-related decline in industrial production probably won't hurt the economy nearly as much as lower energy prices will help consumers.
Full text: U.S. industrial output is about to run out of energy. The same can't be said for the U.S. economy. The Federal Reserve on Wednesday will release January figures on industrial production--the combined output of U.S. manufacturing, utility and mining sectors--and economists expect a gain of 0.4% from a month earlier. A pickup in manufacturing employment and hours, as well as auto-industry production schedules, suggest factory activity increased. There was a warm-weather downdraft in utility production in December that probably at least partially reversed itself last month. The problem area is mining. Although it conjures images of headlamps, pickaxes and coal-smeared faces, the sector is dominated by the oil-and-gas-extraction in dustries. Due to the shale boom, these have been major contributors to industrial output in recent years. In December, they accounted for 13.7% of total industrial production versus 7.8% a decade earlier. The sharp decline in oil prices and the drumbeat of energy companies laying off workers and cutting back spending ought to weigh on oil and gas output. But it could take some time for this to completely show up. That is because even as drilling activity slows, the productive capacity of existing wells won't go away. These will continue to flow. But when the turn does come, its effect could be profound. Consider that when oil prices turned sharply lower in 1986, oil-and-gas-industry extraction fell by as much as 7.4%, dragging overall industrial production lower. And that was at a time when the industry's share of total output was a little more than half today's level. Despite the increase in oil production the U.S. has seen, it is still a net importer of petroleum products. As a result, any energy-related decline in industrial production probably won't hurt the economy nearly as much as lower energy prices will help consumers. But the negative impact will be more immediately visible. And it will be more readily apparent in many of the statistics used to measure how the economy is faring. So it may be only in retrospect that the benefits become clear. Investors trying to gauge the economy may be better off concentrating on how they feel about what they are paying for gasoline. Write to Justin Lahart at justin.lahart@wsj.com Credit: By Justin Lahart
Subject: Economic recovery; Petroleum industry; Industrial production; Petroleum production; Energy industry
Location: United States--US
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655575788
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655575788?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Woodside Profit Jumps After Pumping More Oil; Large oil field restarts after being idled for almost a year
Author: Ross, Kelly
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
SYDNEY--Woodside Petroleum Ltd. reported a 38% increase in annual profit after one of its biggest oil fields came back online following a prolonged technical outage, and it enjoyed higher commodity prices for a large part of the year.
Full text: SYDNEY--Woodside Petroleum Ltd. reported a 38% increase in annual profit after one of its biggest oil fields came back online following a prolonged technical outage, and it enjoyed higher commodity prices for a large part of the year. Australia's biggest oil-and-natural-gas producer by output behind BHP Billiton Ltd. said net profit for the year through December rose to US$2.41 billion. Underlying net profit, which strips out nonrecurring items, rose 42% to US$2.42 billion, falling short of the $2.61 billion average of six analyst forecasts compiled by The Wall Street Journal. The Vincent oil production and storage facility, which operates above an oil field off the coast of Western Australia, restarted in November 2013, after being idled for almost a year. A routine inspection in Singapore had uncovered damage to its water-storage tanks. The resumption of oil output at Vincent, combined with a full year of reliable production from Woodside's North West Shelf and Pluto gas-export projects in Western Australia, helped drive revenue 26% higher. Woodside benefited from a higher average oil price in 2014, although revenue began to tail off in the latter part of the year as oil prices took a tumble. The company declared a final dividend of US$1.44 a share, up from $1.03 a year earlier, and said it expected to maintain its current policy of paying 80% of earnings out as dividends for the foreseeable future. Write to Ross Kelly at ross.kelly@wsj.com Credit: By Ross Kelly
Subject: Petroleum industry; Profits; Petroleum production
Location: United States--US Singapore Western Australia Australia
Company / organization: Name: BHP Billiton; NAICS: 211111, 212231, 212234; Name: Woodside Petroleum Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655587349
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655587349?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cenovus Energy Plans Share Offering; Canadian oil sands producer looks to raise $1.2 billion to fund growth projects
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract:
The move signals the oil sands producer's ability to tap financial markets for capital despite the recent drop in global crude oil prices.
Full text: CALGARY--Cenovus Energy Inc. said Tuesday that it plans to raise at least 1.5 billion Canadian dollars ($1.21 billion) through a share offering to help fund its growth projects. The move signals the oil sands producer's ability to tap financial markets for capital despite the recent drop in global crude oil prices. The Calgary-based company said it would use the funds to partially finance its 2015 budget, which calls for spending C$1.8 billion to C$2.0 billion on mid-construction and existing oil sands projects. Late last month, it joined a host of Canadian oil sands producers by slashing its annual spending plan 27% from an initial target. That foreshadowed Cenovus' report last week of a net loss in the fourth quarter and a 53% slump in cash flow. The company said it would cut about 15% of its workforce, freeze salaries and scale back discretionary spending to cope with a 50% decline in oil prices from last summer's highs of around $100 a barrel. However, Cenovus said it would continue expansion projects already under way at its core Foster Creek and Christina Lake projects in northern Alberta's oil sands. It expects to produce up to 212,000 barrels of oil a day this year, up from 203,493 barrels per day in 2014 and 179,275 barrels a day in 2013. The financing, which Cenovus said could raise up to C$1.73 billion by issuing a maximum of 77.6 million shares, is in the form of a so-called bought deal, in which the underwriters assume all the risk of an issue by agreeing to buy the securities at a set price and then reselling them to other investors. The syndicate underwriting the deal is led by RBC Capital Markets and TD Securities Inc. and is expected to close on or around March 3, the company said. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Petroleum industry; Oil sands; Budgets; Crude oil prices
Company / organization: Name: Cenovus Energy Inc; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655596489
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655596489?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pemex Fights Fuel Thieves With New Tactic; Oil giant will stop moving engine-ready fuels through pipelines
Author: Iliff, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]17 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Petróleos Mexicanos is trying a new tactic to deter fuel thieves who tap into its pipelines and steal hundreds of millions of dollars in refined products each year: the pipelines will no longer carry gasoline or diesel that is ready for use. Pemex, as Mexico's national oil company is commonly known, said Tuesday the gasoline and diesel it transports will lack additives that make the fuels usable for cars, trucks and industrial plants. Those additives will be mixed in at dozens of distribution centers located across Mexico. Pemex is currently the sole supplier of gasoline and diesel in the country. That will change beginning in 2017 under an energy overhaul signed into law last year that will permit new service-station brands and the purchase of fuels on the open market. Mexico consumes nearly 1.2 million barrels a day of gasoline and diesel fuel. The country imports about half of its gasoline needs. The new antitheft measure will be accompanied by an advertising campaign to discourage motorists from buying fuels that might be spurious, such as those sold outside of Pemex service-station franchises and at unauthorized distributors along highways and in small towns where detection becomes more difficult. "It is recommended that consumers make sure the fuels they are using come from Pemex terminals, and not to acquire gasoline and diesel outside of service stations and authorized distributors," Pemex said in a statement, warning that unfinished fuels can cause engine damage. Pemex's unfinished gasoline and diesel will have a different color than the finished versions of the products, making the work of inspectors easier. George Baker, a Houston-based oil analyst who follows Pemex, said there still could be problems if motorists unwittingly buy unfinished fuels at Pemex service-station franchises, which have been known to buy fuels from the black market to save money or are pressured by organized crime. "Cars are breaking down and now we're going to track down where they bought their gasoline?" he said. "How's that going to work out?" Still, Mr. Baker applauded Pemex for trying a novel approach. "Even if it doesn't perfectly solve all of Pemex's problems, it is making it more difficult for the narcos," said Mr. Baker, referring to organized-crime groups that deal in drugs as well as stolen petroleum products. "It's disrupting their business and their income, and that's what you want to do." Pemex estimates that pipeline theft of all of its products, including crude oil, costs up to $1 billion a year. The company is investing in technology to better monitor pipelines, but officials have said the task is daunting because of the sheer expanse of the national pipeline network. The company is launching a pilot project in limited areas and will soon know how the public reacts to its plan. Write to Laurence Iliff at laurence.iliff@wsj.com Credit: By Laurence Iliff
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 17, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655596673
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655596673?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Considering Mergers Among Its Big State Oil Companies; Government economic advisers are conducting a feasibility study of options for consolidation
Author: Wei, Lingling; Spegele, Brian
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Last year, the government announced a plan to merge the top two state-owned railcar makers with a goal of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies--CNPC, Sinopec, Cnooc and Sinochem--have long dominated every phase of the industry; for years each had a geographic or business area of specialty. Among big deals last year, Spain's Repsol SA agreed to acquire Canadian oil-and-gas producer Talisman Energy Inc. for $8.3 billion.
Full text: BEIJING--China's leadership is exploring ways to consolidate the country's oil industry, creating new national champions able to take on the likes of Exxon MobilCorp. and operate more efficiently as prices slide. One option being studied by a team of advisers involves combining China National Petroleum Corp., or CNPC, and its main domestic rival, China Petrochemical Corp., or Sinopec, according to officials with knowledge of the research. Other options include merging two other major energy companies, China National Offshore Oil Corp., or Cnooc, and Sinochem Group. No timetable has been set for a decision on whether or when to proceed with any merger, said the officials. Spokespersons for the four Chinese oil companies and the State-owned Assets Supervision and Administration Commission, which oversees the largest state enterprises, declined to comment or didn't respond to queries. The possible mergers would be the latest consolidation of state companies as the government tries to regear a slowing economy. As part of that effort, President Xi Jinping, now more than two years in office, is trying to revamp major state firms to make them more competitive globally. Though the government has taken some tentative steps to allow more private and foreign capital to flow into infrastructure, resources, banking and other areas that were long the preserve of state firms, Mr. Xi has said they remain an "important pillar of the national economy." The government "must ensure they thrive," Mr. Xi said in remarks in August. Bigger and stronger state companies, according to officials and scholars familiar with the leadership's thinking, are viewed by Mr. Xi as key to China's asserting its prominence in the world. Mergers could also boost efficiencies in an economy increasingly burdened by excess capacity--a problem that has caused Chinese manufacturers to compete against one other by cutting prices. Last year, the government announced a plan to merge the top two state-owned railcar makers with a goal of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies--CNPC, Sinopec, Cnooc and Sinochem--have long dominated every phase of the industry; for years each had a geographic or business area of specialty. For instance, CNPC focused on exploration and production, and Sinopec on refining. Over the past 15 years, in response to earlier reform plans to spur competition, they have expanded into the others' turf, creating overlapping operations that span exploration, refining and running gas pumps. "They're increasingly fighting among each other," said one of the officials with knowledge of the consolidation plan. "That has led to lots of waste and inefficiency." With international oil prices having halved since last June, those problems have become more pronounced, giving reform new urgency. Combining and then streamlining the operations of the major Chinese oil producers could help reduce waste caused by redundant staff and projects, the officials said. Low oil prices have spurred talk of new deals activity across the globe, as stronger companies engage in opportunistic buying of weaker firms. Among big deals last year, Spain's Repsol SA agreed to acquire Canadian oil-and-gas producer Talisman Energy Inc. for $8.3 billion. "We want to create a big Chinese brand to better compete overseas," the Chinese official said. "We want our own ExxonMobil." A shake-up would cap what has been a tumultuous period for China's oil industry. Chinese oil giants--particularly CNPC--have been the focus of an anticorruption campaign championed by President Xi. Leading industry executives have been detained for suspected graft, and added scrutiny has caused a huge pullback in new investment by wary executives. A decision to consolidate China's oil sector by making big state firms even bigger could end up tamping competition at home and stymieing market-oriented reforms, some analysts said. "If you are focused on the foreign market, you certainly want to consolidate because it's more competitive abroad," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "But if just for the domestic market it's better to have more competition, because competition leads to efficiency." Beijing has started inviting private capital into the oil industry. Sinopec last year said it would sell a nearly 30% stake in its retail sales-and-marketing unit to a group of 25 investors, mostly Chinese. But none of the initiatives involves selling a controlling stake to the private sector. A bigger challenge is whether the government would allow the combined entities to improve performance by reducing their huge workforces or shedding assets, said Philip Andrews-Speed, an expert on energy governance in China at the National University of Singapore. "That will be the test of whether this is old statism...or are they really looking for better performance," he said. PetroChina Co., the listed arm of CNPC, has nearly 550,000 employees world-wide, a workforce more than seven times as large as ExxonMobil's. The Chinese company delivered revenue of $361 billion in 2013, compared with more than $420 billion at Exxon. These days, all of China's big oil companies have been under pressure from prices and from the government to cut costs and focus on improving returns. For example, Cnooc Ltd., the listed unit of China National Offshore Oil, says it will cut capital spending by as much as 35% in 2015 as a result of falling global oil prices. Expenditures at PetroChina and Sinopec are also expected to fall this year. Merging CNPC and Sinopec would create one of the world's biggest companies. A combined entity--at least in the short run--could control a vast majority of China's onshore oil-and-gas production and would hold total assets of hundreds of billions of dollars. In the case of Cnooc, a merger with Sinochem would give it more refining operations, providing it with more sources of revenue that over time could help shield it against oil-market volatility. Cnooc is regarded by analysts as the most vulnerable to the oil-and-gas price drop, in part because it expanded aggressively abroad, buying assets including Canadian oil-sands operator Nexen Inc. for $15.1 billion in 2013, when prices were high. Write to Lingling Wei at lingling.wei@wsj.com and Brian Spegele at brian.spegele@wsj.com Credit: By Lingling Wei and Brian Spegele
Subject: Petroleum industry; Energy economics; Energy industry
Location: China
Company / organization: Name: China Petrochemical Corp; NAICS: 324110; Name: Bombardier Inc; NAICS: 336411, 336510, 336999, 551112; Name: Siemens AG; NAICS: 334517, 334210, 334220; Name: CNOOC Ltd; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655601083
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655601083?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Big Investors Place Energy Bets (For and Against); Buffett, Soros sell off Exxon Mobil stakes; Paulson wagers on Talisman
Author: Das, Anupreeta; Benoit, David
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
[...]Point held five million shares worth about $359 million as of Dec. 31, according to a regulatory filing.
Full text: Major investors made striking bets with their energy holdings in the fourth quarter amid a collapse in the price of oil. Warren Buffett's Berkshire Hathaway Inc. and George Soros's Soros Fund Management sold off all their shares in Exxon Mobil Corp. as of Dec. 31, while hedge-fund manager John Paulson made a new bet with 70 million shares in Talisman Energy Inc. valued at $549.1 million. The disclosures were made Tuesday in a regulatory filing required of investors who manage more than $100 million. Oil prices have plunged from north of $100 a barrel in June to roughly half that level now, the victim of a growing surplus brought on by booming U.S. production and weaker-than-expected demand. The volatility in prices has given investors opportunities to bet on further declines or a sharp rebound. Berkshire sold about 41 million shares of Exxon, having initially disclosed its ownership of the stock in the third quarter of 2013 and adding to it slightly in later quarters. The nearly $4 billion position made Berkshire one of Exxon's largest shareholders. Exxon, the biggest U.S. oil company, said earlier this month it was looking for ways to cut costs as profit fell during the fourth quarter. The Omaha, Neb., conglomerate also sold off a small position in ConocoPhillips and cut its stake in National Oilwell Varco Inc., an oil-and-gas drilling- equipment maker, by about 18%. However, it increased stakes in two other energy-sector companies, Phillips 66 and Canadian oil-sands company Suncor Energy Inc. Mr. Paulson, who made his name during the 2008 financial crisis betting against the housing market, wasn't entirely bullish on energy. He exited from Athalon Energy and pared back his holdings in Oasis Petroleum Inc. even as his ownership of Whiting Petroleum Corp. rose nearly 44% due to its December acquisition of another company where Mr. Paulson had a 26 million-share stake. Others who took similar steps away from energy include New York hedge fund Jana Partners LLC and David Einhorn's Greenlight Capital Inc., according to filings Tuesday and last Friday. Greenlight sold out of BP PLCAnadarko Petroleum Corp. and National Oilwell Varco, while Jana Partners exited from stakes in oil-and-gas producer Apache Corp. and other companies where it had been pushing changes. It had called for Apache to sell its international assets and concentrate on drilling in the U.S. Daniel Loeb's Third Point LLC exited some of its energy holdings even as it also loaded up on other names. One of its biggest new positions was in refinery company Phillips 66. Third Point held five million shares worth about $359 million as of Dec. 31, according to a regulatory filing. And Third Point also took new positions in Rice Midstream Partners LP and Cobalt International Energy Inc. "We are looking to add exposure during market dislocations," Third Point said in a letter to investors earlier this month. Write to Anupreeta Das at anupreeta.das@wsj.com and David Benoit at david.benoit@wsj.com Credit: By Anupreeta Das And David Benoit
Subject: Petroleum industry; Acquisitions & mergers; Investments
Location: United States--US
People: Buffett, Warren Soros, George
Company / organization: Name: Greenlight Capital Inc; NAICS: 523120; Name: Oasis Petroleum Inc; NAICS: 211111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Talisman Energy Inc; NAICS: 211111; Name: National Oilwell Varco Inc; NAICS: 333132; Name: Third Point LLC; NAICS: 523920; Name: Apache Corp; NAICS: 324110, 211111, 213112; Name: Jana Partners LLC; NAICS: 523930; Name: Whiting Petroleum Corp; NAICS: 211111; Name: Soros Fund Management; NAICS: 523930; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655606665
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655606665?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
At Work: Oil Patch Woes Heighten Business School's Appeal
Author: Anonymous
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
The energy industry cut 20,193 jobs last month, says outplacement firm Challenger, Gray & Christmas Inc. Some 18% of North American oil and gas companies plan to freeze or cut pay in the near future, and 32% of them plan to ease up on efforts to poach talent from rivals, according to a recent survey by consulting firm Mercer LLC.
Full text: One byproduct of plunging oil prices: More young professionals in the energy sector are considering an M.B.A., say leaders at several business schools. The M.B.A. market is countercyclical. When times are good in a given business sector, applications from that sector tend to fall. When a sector, or the economy in general, is troubled, applications go up. The energy industry cut 20,193 jobs last month, says outplacement firm Challenger, Gray & Christmas Inc. Some 18% of North American oil and gas companies plan to freeze or cut pay in the near future, and 32% of them plan to ease up on efforts to poach talent from rivals, according to a recent survey by consulting firm Mercer LLC. Admissions season is still under way, so schools can't yet tally the energy-industry refugees. Plus, the oil-price drop is fairly new, so plenty of would-be them might wait for next year to apply. But Duke's Fuqua School of Business, Rice University's Jones Graduate School of Business and the University of Texas at Austin's McCombs School of Business--all known for their strong programs in energy management--say they have received an increasing number of applications from energy-sector candidates to their two-year full-time M.B.A. programs. In an interview with The Wall Street Journal earlier this year, Harvard Business School Dean Nitin Nohria said he was surprised by a "sudden jump" in applications from energy-industry employees. The number of energy professionals applying for M.B.A.s is "up since the first of the year," says Gladney Darroh, president and chief executive of Piper Morgan Associates Personnel Consultants, an energy headhunting firm in Houston. Workers calling him about job openings often say they are planning to apply to b-school, he said, adding that they "no longer feel like they're bulletproof" in their industry. M.B.A. grads can expect a salary bump on their return to the working world. The expected median starting salary for the M.B.A. class of 2014 was $95,000 in the U.S.0, says the Graduate Management Admission Council, a $45,000 premium over that of new bachelor's degree holders. Lindsay Gellman
Subject: MBA programs & graduates; Business schools; Colleges & universities; Natural gas utilities
Company / organization: Name: Graduate Management Admission Council; NAICS: 813920; Name: University of Texas; NAICS: 611310; Name: Rice University; NAICS: 611310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655606668
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655606668?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Asian Shares Rise as Greece Tensions Ease; Hong Kong energy stocks rally on merger hopes in China's oil sector
Author: Deng, Chao
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
China's leadership is exploring ways to consolidate the country's oil industry, including possibly merging China National Petroleum Corp. and its main domestic rival China Petrochemical Corp., The Wall Street Journal reported .
Full text: Stocks in Asia rose Wednesday, as fears eased over Greece leaving the eurozone while Hong Kong energy stocks rallied on hopes of a possible megamerger in China's oil sector. The Nikkei Stock Average was up 1.2%, Australia's S&P/ASX 200 gained 1.0% and the Hang Seng ended up 0.2%, ahead of the Lunar New Year on Thursday. Hong Kong extended four consecutive days of gains in a shortened trading day while the Shanghai market was closed for a week-long holiday. PetroChina Co. and Sinopec were most heavily traded, leading the energy sector up 2.7% amid thin turnover. China's leadership is exploring ways to consolidate the country's oil industry, including possibly merging China National Petroleum Corp. and its main domestic rival China Petrochemical Corp., The Wall Street Journal reported . With Asia light on data, investors turned to cues from abroad. The S&P 500 eked out a record finish , after reports that Greece would seek an extension of its rescue deal from its eurozone creditors. "Overseas markets are stable even as uncertainty remains over Greece and Ukraine," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. The U.S. dollar was lower against the yen in Asian trade Wednesday, with investors sitting on the sidelines ahead of Bank of Japan Gov. Haruhiko Kuroda's post-policy board meeting news conference. Though the central bank stood pat on its policy earlier Wednesday, most market watchers expect it to consider new stimulus later in the year, as lower oil prices push inflation further below its 2% target. In Singapore, commodities trader Noble Group was up 1.9%, after publishing a further rejection of allegations of accounting irregularities . The firm said Iceberg Research didn't contact it for clarification before publishing a research report that doubted how much Noble's stakes in associate firms were worth. Noble's shares lost 5.4% Tuesday and 7.9% Monday. In Australia, Toll Holdings Ltd. jumped 47.2%, after the company received a takeover offer from Japan Post Holdings, which values Toll at 9.04 Australian dollars ($7.07) a share--a 49% premium on Tuesday's A$6.08 closing price. Gregor Stuart Hunter contributed to this article. Write to Chao Deng at Chao.Deng@wsj.com Credit: By Chao Deng
Subject: Petroleum industry; Investments; Eurozone
Location: Australia Greece Asia China Hong Kong
Company / organization: Name: China Petrochemical Corp; NAICS: 324110; Name: China National Petroleum Corp; NAICS: 21 1111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655612039
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Crude Oil Advances On Output Worries
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Feb 2015: C.4.
Abstract:
[...]oil exports from the south of Iraq totaled 1.5 million barrels a day in the first 10 days of February, which is 900,000 barrels a day lower than in January and less than half of the country's target for this month, Commerzbank said in a note.
Full text: Oil prices gained, as traders weighed concerns about Iraqi and Libyan production against an oversupplied market. Light, sweet crude for March delivery rose 75 cents, or 1.4%, to settle at $53.53 a barrel on the New York Mercantile Exchange, the highest settlement price since Dec. 30. Brent, the global benchmark, rose $1.13, or 1.8%, to $62.53 on ICE Futures Europe. Oil prices have plunged more than 50% since June as ample global supply growth outweighed tepid demand. Many analysts expect the market to stay oversupplied through the first half of the year. However, recent violence and bad weather has affected output from Libya and Iraq, two major oil producers. Egyptian airstrikes against Islamic State targets in Libya have added to the turmoil in the country, already reeling from sabotage of its oil infrastructure amid the armed conflict between two rival governments claiming to run Libya. JBC Energy estimates that the Libyan oil output has fallen to as low as 150,000 barrels a day, down from almost 900,000 barrels in October. In Iraq, one of the biggest Middle Eastern oil producers, bad weather has hit crude exports. As a result, oil exports from the south of Iraq totaled 1.5 million barrels a day in the first 10 days of February, which is 900,000 barrels a day lower than in January and less than half of the country's target for this month, Commerzbank said in a note. In the U.S., traders remained focused on a glut of oil. Stockpiles have risen for five weeks in a row to a record of 417.9 million barrels as of Feb. 6, according to weekly data from the U.S. Energy Information Administration dating back to 1982. In Cushing, Okla., a storage hub and the delivery point for the Nymex contract, supplies have climbed for 10 consecutive weeks. Credit: By Nicole Friedman and Georgi Kantchev
Subject: Petroleum industry; Crude oil; Commodity prices
Location: United States--US Libya Iraq
Company / organization: Name: New York Mercantile Exchange; NAICS: 523210
Classification: 3400: Investment analysis & personal finance; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Feb 18, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655668429
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655668429?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News: Oil Train Had Modern Cars
Author: Gold, Russell; Maher, Kris
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Feb 2015: A.3.
Abstract:
The crude-oil train that derailed and exploded in West Virginia on Monday consisted of modern tanker cars the rail industry has hailed as safe, ratcheting up the debate over proposed federal rules that could require even stronger safeguards.
Full text: The crude-oil train that derailed and exploded in West Virginia on Monday consisted of modern tanker cars the rail industry has hailed as safe, ratcheting up the debate over proposed federal rules that could require even stronger safeguards. The derailment near a small community outside Charleston launched fireballs into the sky, leaked crude into a creek and fueled fires that were still burning Tuesday. One person was treated for possible respiratory problems and released, said CSX Corp., which operated the train, and one home burned to the ground. Several hundred people were evacuated and many were unable to return home Tuesday. The incident comes as the amount of crude moving by rail has skyrocketed. In 2009, U.S. railroads transported about 21,000 barrels of oil a day. Today they carry 50 times as much, according to federal data, as fracking-fueled oil production in North Dakota outpaced pipeline capacity and trains became the easiest way to get crude to refineries. At the same time, a spate of crude-oil explosions has frightened people who live along tracks as well as regulators. In the most serious incident, a train derailed in Lac-Megantic, Quebec, killing 47 people. Federal regulators last year proposed rule changes to make transport by rail safer. The White House is considering the changes, according to a Federal Railroad Administration spokesman, and is expected to issue final rules in coming months. One proposed version of the rules required using the same CPC-1232 tanker cars that exploded in West Virginia. Another version would require a stronger tank car. Tank-car manufacturers support requiring thicker shells and other protections, but the oil industry worries that implementing changes too quickly could slow the U.S. energy boom. "We think we can reduce the magnitude of these incidents, in part with a safer tank car," said Jack Isselmann, a senior vice president at Greenbrier Cos., an Oregon-based tanker-car maker. But he said orders were slow because leasing companies were waiting for the final federal rule. The train that derailed was traveling from North Dakota to Yorktown, Va., a CSX spokesman said. Most of the oil carried by rail originates in North Dakota, but exact routes aren't disclosed. However, a Wall Street Journal analysis of state data created a detailed picture of the transport. The train that derailed came through Chicago, then headed through Ohio and into West Virginia. It was to cross Virginia and deliver the crude to a terminal in Yorktown. Morris Bounds Jr., 44 years old, said he was sitting in his living room in Mount Carbon when he heard booms. He got a frantic call from his father who lives nearby, saying a train had derailed next to his house. Mr. Bounds hopped in his truck and sped over, seeing his father running barefoot through the snow as the home burned. "It was like a horror movie trying to get to him," Mr. Bounds said. "I had seen cars piled up and flames shooting through them. He was just running for his life." Credit: By Russell Gold and Kris Maher
Subject: Oil spills; Explosions; Evacuations & rescues; Railroad accidents & safety; Petroleum industry
Location: United States--US Charleston West Virginia North Dakota Lac-Megantic Quebec Canada
Company / organization: Name: Greenbrier Cos; NAICS: 336510; Name: CSX Corp; NAICS: 482111
Classification: 8350: Transportation & travel industry; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.3
Publication year: 2015
Publication date: Feb 18, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655668644
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655668644?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Eni Falls Deeper Into Red on Lower Oil Price; Italian oil and gas group increases dividend to [euro]1.12 a share
Author: Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Showing similar strain to its bigger European rivals like Royal Dutch Shell NV, BP PLC, and Total SA, Eni said it marked down the value of its oil and product inventories by [euro]860 million and booked asset impairments and other after-tax charges of [euro]1.94 billion.
Full text: MILAN--Eni SpA has reported a wider net loss in the fourth quarter as the sharp drop in crude oil prices played havoc with the Italian oil and gas group's performance, knocking revenue lower and triggering hefty write-downs. Eni said its net loss widened to [euro]2.34 billion ($2.67 billion) in the three months to end-December, compared with a net loss of [euro]647 million in same period the previous year, on a 10% drop in revenue to [euro]26.83 billion. Adjusted profit, which strips out special items, dropped by two-thirds to [euro]464 million, below a consensus analysts' forecast [euro]614 million. Showing similar strain to its bigger European rivals like Royal Dutch Shell NV, BP PLC, and Total SA, Eni said it marked down the value of its oil and product inventories by [euro]860 million and booked asset impairments and other after-tax charges of [euro]1.94 billion. However, Eni said on Wednesday that it has declared a slightly higher yearly dividend of [euro]1.12 a share, up from [euro]1.10 a share in 2013. Production in the fourth quarter rose 4.5% to 1.65 million barrels of oil and equivalent natural gas volumes a day. Eni said it expects production to increase this year as new projects come online in Angola, Congo, the U.K., the U.S. and Norway. For the full year, Eni said net profit fell by 74% to [euro]1.33 billion from [euro]5.16 billion in 2013. Write to Eric Sylvers at eric.sylvers@wsj.com Credit: By Eric Sylvers
Subject: Petroleum industry; Euro; Net losses; Financial performance
Company / organization: Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Eni SpA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655669424
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655669424?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Global Finance: Buffett, Soros Sell Off Shares In Exxon
Author: Das, Anupreeta; Benoit, David
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Feb 2015: C.3.
Abstract:
[...]Point held five million shares worth about $359 million as of Dec. 31, according to a regulatory filing.
Full text: Major investors made striking bets with their energy holdings in the fourth quarter amid a collapse in the price of oil. Warren Buffett's Berkshire Hathaway Inc. and George Soros's Soros Fund Management sold off all their shares in Exxon Mobil Corp. as of Dec. 31, while hedge-fund manager John Paulson made a new bet with 70 million shares in Talisman Energy Inc. valued at $549.1 million. The disclosures were made Tuesday in a regulatory filing required of investors who manage more than $100 million. Oil prices have plunged from north of $100 a barrel in June to roughly half that level now, the victim of a growing surplus brought on by booming U.S. production and weaker-than-expected demand. The volatility in prices has given investors opportunities to bet on further declines or a sharp rebound. Berkshire sold about 41 million shares of Exxon, having initially disclosed its ownership of the stock in the third quarter of 2013 and adding to it slightly in later quarters. The nearly $4 billion position made Berkshire one of Exxon's largest shareholders. Exxon, the biggest U.S. oil company, said earlier this month it was looking for ways to cut costs as profit fell during the fourth quarter. The Omaha, Neb., conglomerate also sold off a small position in ConocoPhillips and cut its stake in National Oilwell Varco Inc., an oil-and-gas drilling- equipment maker, by about 18%. However, it increased stakes in two other energy-sector companies, Phillips 66 and Canadian oil-sands company Suncor Energy Inc. Mr. Paulson, who made his name during the 2008 financial crisis betting against the housing market, wasn't entirely bullish on energy. He exited from Athalon Energy and pared back his holdings in Oasis Petroleum Inc. even as his ownership of Whiting Petroleum Corp. rose nearly 44% due to its December acquisition of another company where Mr. Paulson had a 26 million-share stake. Others who took similar steps away from energy include New York hedge fund Jana Partners LLC and David Einhorn's Greenlight Capital Inc., according to filings Tuesday and last Friday. Greenlight sold out of BP PLC, Anadarko Petroleum Corp. and National Oilwell Varco, while Jana Partners exited from stakes in oil-and-gas producer Apache Corp. and other companies where it had been pushing changes. It had called for Apache to sell its international assets and concentrate on drilling in the U.S. Daniel Loeb's Third Point LLC exited some of its energy holdings even as it also loaded up on other names. One of its biggest new positions was in refinery company Phillips 66. Third Point held five million shares worth about $359 million as of Dec. 31, according to a regulatory filing. Credit: By Anupreeta Das and David Benoit
Subject: Petroleum industry; Investment policy; Statistical data
Location: United States--US
People: Buffett, Warren Soros, George Paulson, John
Company / organization: Name: Greenlight Capital Inc; NAICS: 523120; Name: Oasis Petroleum Inc; NAICS: 211111; Name: Suncor Energy Inc; NAICS: 211111, 213112; Name: Talisman Energy Inc; NAICS: 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: National Oilwell Varco Inc; NAICS: 333132; Name: Third Point LLC; NAICS: 523920; Name: Apache Corp; NAICS: 324110, 211111, 213112; Name: Anadarko Petroleum Corp; NAICS: 211111; Name: Jana Partners LLC; NAICS: 523930; Name: Whiting Petroleum Corp; NAICS: 211111; Name: Soros Fund Management; NAICS: 523930; Name: Berkshire Hathaway Inc; NAICS: 442210, 445292, 511110, 511130, 524126, 335210; Name: Exxon Mobil Corp; NAICS: 211111, 447110
Classification: 3400: Investment analysis & personal finance; 8130: Investment services; 8510: Petroleum industry; 9190: United States
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.3
Publication year: 2015
Publication date: Feb 18, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655688768
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655688768?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China Weighs Megamergers For State Oil Companies
Author: Wei, Lingling; Spegele, Brian
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 Feb 2015: A.1.
Abstract:
Last year, the government announced a plan to merge the top two state-owned railcar makers with a goal of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies -- CNPC, Sinopec, Cnooc and Sinochem -- have long dominated every phase of the industry; for years each had a geographic or business area of specialty. Among big deals last year, Spain's Repsol SA agreed to acquire Canadian oil-and-gas producer Talisman Energy Inc. for $8.3 billion.
Full text: BEIJING -- China's leadership is exploring ways to consolidate the country's oil industry, creating new national champions able to take on the likes of Exxon MobilCorp. and operate more efficiently as prices slide. One option being studied by a team of advisers involves combining China National Petroleum Corp., or CNPC, and its main domestic rival, China Petrochemical Corp., or Sinopec, according to officials with knowledge of the research. Other options include merging two other major energy companies, China National Offshore Oil Corp., or Cnooc, and Sinochem Group. No timetable has been set for a decision on whether or when to proceed with any merger, said the officials. Spokespersons for the four Chinese oil companies and the State-owned Assets Supervision and Administration Commission, which oversees the largest state enterprises, declined to comment or didn't respond to queries. The possible mergers would be the latest consolidation of state companies as the government tries to regear a slowing economy. As part of that effort, President Xi Jinping, now more than two years in office, is trying to revamp major state firms to make them more competitive globally. Though the government has taken some tentative steps to allow more private and foreign capital to flow into infrastructure, resources, banking and other areas that were long the preserve of state firms, Mr. Xi has said they remain an "important pillar of the national economy." The government "must ensure they thrive," Mr. Xi said in remarks in August. Bigger and stronger state companies, according to officials and scholars familiar with the leadership's thinking, are viewed by Mr. Xi as key to China's asserting its prominence in the world. Mergers could also boost efficiencies in an economy increasingly burdened by excess capacity -- a problem that has caused Chinese manufacturers to compete against one other by cutting prices. Last year, the government announced a plan to merge the top two state-owned railcar makers with a goal of competing with Siemens AG in Germany and Canada's Bombardier Inc. The four oil companies -- CNPC, Sinopec, Cnooc and Sinochem -- have long dominated every phase of the industry; for years each had a geographic or business area of specialty. For instance, CNPC focused on exploration and production, and Sinopec on refining. Over the past 15 years, in response to earlier reform plans to spur competition, they have expanded into the others' turf, creating overlapping operations that span exploration, refining and running gas pumps. "They're increasingly fighting among each other," said one of the officials with knowledge of the consolidation plan. "That has led to lots of waste and inefficiency." With international oil prices having halved since last June, those problems have become more pronounced, giving reform new urgency. Combining and then streamlining the operations of the major Chinese oil producers could help reduce waste caused by redundant staff and projects, the officials said. Low oil prices have spurred talk of new deals activity across the globe, as stronger companies engage in opportunistic buying of weaker firms. Among big deals last year, Spain's Repsol SA agreed to acquire Canadian oil-and-gas producer Talisman Energy Inc. for $8.3 billion. "We want to create a big Chinese brand to better compete overseas," the Chinese official said. "We want our own ExxonMobil." A shake-up would cap what has been a tumultuous period for China's oil industry. Chinese oil giants -- particularly CNPC -- have been the focus of an anticorruption campaign championed by President Xi. Leading industry executives have been detained for suspected graft, and added scrutiny has caused a huge pullback in new investment by wary executives. A decision to consolidate China's oil sector by making big state firms even bigger could end up tamping competition at home and stymieing market-oriented reforms, some analysts said. "If you are focused on the foreign market, you certainly want to consolidate because it's more competitive abroad," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. "But if just for the domestic market it's better to have more competition, because competition leads to efficiency." Beijing has started inviting private capital into the oil industry. Sinopec last year said it would sell a nearly 30% stake in its retail sales-and-marketing unit to a group of 25 investors, mostly Chinese. But none of the initiatives involves selling a controlling stake to the private sector. A bigger challenge is whether the government would allow the combined entities to improve performance by reducing their huge workforces or shedding assets, said Philip Andrews-Speed, an expert on energy governance in China at the National University of Singapore. "That will be the test of whether this is old statism . . . or are they really looking for better performance," he said. PetroChina Co., the listed arm of CNPC, has nearly 550,000 employees world-wide, a workforce more than seven times as large as ExxonMobil's. The Chinese company delivered revenue of $361 billion in 2013, compared with more than $420 billion at Exxon. These days, all of China's big oil companies have been under pressure from prices and from the government to cut costs and focus on improving returns. For example, Cnooc Ltd., the listed unit of China National Offshore Oil, says it will cut capital spending by as much as 35% in 2015 as a result of falling global oil prices. Expenditures at PetroChina and Sinopec are also expected to fall this year. Merging CNPC and Sinopec would create one of the world's biggest companies. A combined entity -- at least in the short run -- could control a vast majority of China's onshore oil-and-gas production and would hold total assets of hundreds of billions of dollars. In the case of Cnooc, a merger with Sinochem would give it more refining operations, providing it with more sources of revenue that over time could help shield it against oil-market volatility. Cnooc is regarded by analysts as the most vulnerable to the oil-and-gas price drop, in part because it expanded aggressively abroad, buying assets including Canadian oil-sands operator Nexen Inc. for $15.1 billion in 2013, when prices were high. Credit: By Lingling Wei and Brian Spegele
Subject: Petroleum industry; Energy economics; Energy industry; Acquisitions & mergers; Competition
Location: China
Company / organization: Name: Bombardier Inc; NAICS: 336411, 336510, 336999, 551112; Name: Siemens AG; NAICS: 334517, 334210, 334220; Name: Exxon Mobil Corp; NAICS: 211111, 447110; Name: China Petrochemical Corp; NAICS: 324110; Name: CNOOC Ltd; NAICS: 211111; Name: China National Petroleum Corp; NAICS: 211111; Name: Sinochem Co Ltd; NAICS: 324110
Classification: 2330: Acquisitions & mergers; 8510: Petroleum industry; 9179: Asia & the Pacific
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.1
Publication year: 2015
Publication date: Feb 18, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655689052
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655689052?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Prices Fall After Recent Gains; Issue of global oversupply back in focus as analysts question sustainability of 2015 rally
Author: Friedman, Nicole; Kantchev, Georgi
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
According to analysts at Commerzbank, the increase of stocks in the U.S. is weighing on the U.S. benchmark, while Brent is profiting from increased supply risks due to turmoil in Libya.
Full text: Oil prices fell on Wednesday as investors looked ahead to U.S. inventory data, which are expected to show that stockpiles hit a record last week. Crude futures have rallied in recent weeks, with Brent, the global price benchmark, gaining more than 30% from its January low. But analysts have questioned the sustainability of the rally as the global supply of crude remains robust and demand is still lackluster. Light, sweet crude for March delivery slid $1.39, or 2.6%, to settle at $52.14 a barrel on the New York Mercantile Exchange. Brent crude fell $2, or 3.2%, to $60.53 a barrel on London's ICE Futures exchange. Ample global oil supplies have sent prices plunging since June. In recent weeks, U.S. oil supplies have hit records, according to weekly U.S. Energy Information Administration data going back to 1982. The market is "focused on the U.S.," said Andy Lebow, senior vice president for energy at Jefferies LLC. While there have been some signs of increased Asian demand, he said, some of that may be traders putting crude into storage with plans to sell it later. "It's probably way too premature to say whether or not these low prices are stimulating end-user demand," Mr. Lebow said. Demand for crude oil typically falls in the early spring as refiners shut units for seasonal maintenance. The EIA is set to release its data for the week ended Feb. 13 on Thursday at 11 a.m. EST. Analysts surveyed by The Wall Street Journal expect the agency to report that oil inventories rose by 3.7 million barrels in the week, while gasoline supplies rose by 500,000 barrels and stocks of distillates, including heating oil and diesel fuel, fell by 2 million barrels. The American Petroleum Institute, an industry group, said late Wednesday that its own data for the same week showed a 14.3 million-barrel increase in crude stocks, according to industry sources. The API also reported that gasoline supplies rose by 1.3 million barrels and distillate stocks fell by 2.7 million barrels. Oil prices extended their losses in late trading on the news. "The oil market is still fundamentally oversupplied and prices will start to struggle as we enter the second quarter," said Steve Sawyer, analyst at Facts Global Energy. Meanwhile, the price differential between the Brent and the U.S. benchmark has widened in the past month, with Brent trading at a premium of about $9 to U.S. crude. In January, U.S. prices briefly traded above Brent. According to analysts at Commerzbank, the increase of stocks in the U.S. is weighing on the U.S. benchmark, while Brent is profiting from increased supply risks due to turmoil in Libya. Gasoline futures fell 1.65 cents, or 1%, to $1.5736 a gallon. Diesel futures slid 1.8 cents, or 0.9%, to $1.9594 a gallon. Write to Nicole Friedman at nicole.friedman@wsj.com and Georgi Kantchev at georgi.kantchev@wsj.com Credit: By Nicole Friedman And Georgi Kantchev
Subject: Petroleum industry; Stocks; Futures; Crude oil prices; Supplies
Location: United States--US
Company / organization: Name: Jefferies LLC; NAICS: 523110; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: American Petroleum Institute; NAICS: 813910, 541820
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655696314
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655696314?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
China's Big Oil Logic Doesn't Add Up
Author: Bhattacharya, Abheek
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
A better argument for consolidation would be slashing costs in the face of lower oil prices, the way Exxon Mobil cut 7% of its combined workforce in the three years after the 1999 merger which created the company.
Full text: China doesn't think the heights of its oil industry are commanding enough. It is contemplating a megamerger of state oil giants, The Wall Street Journal reports , but these plans could give investors a case of vertigo. One option Beijing is exploring is putting its biggest oil company, China National Petroleum Corp, or CNPC, together with its second biggest, China Petrochemical Corp, or Sinopec Group. It is not clear if this merger would involve only CNPC and Sinopec's listed arms, PetroChina and China Petroleum and Chemical respectively, or combine the parents themselves. The idea is to build a national champion that rivals Exxon Mobil, according to the Journal. That doesn't make much commercial sense . If the plan is to increase firepower to compete for international assets, CNPC alone is more than capable of taking on the Western supermajors. It is already 70% bigger than Exxon, with $600 billion in assets at the end of 2013, and even listed unit PetroChina is 10% larger. CNPC held $33 billion in net cash as of 2013, compared with $17 billion net debt at Exxon as of September. Major Chinese oil companies conduct overseas deals usually at the parent level. Perhaps the rationale is to prevent the two from bidding against each other for overseas assets. But Beijing has recently coordinated its wards' overseas bids abroad to avoid such a situation anyway, notes Sanford C. Bernstein's Neil Beveridge. A better argument for consolidation would be slashing costs in the face of lower oil prices, the way Exxon Mobil cut 7% of its combined workforce in the three years after the 1999 merger which created the company. The problem is it is hard to see Chinese state firms being as rigorous. If anything, Chinese officials in a previous era thought that two national oil companies, instead of one, would foster discipline through competition. That is the key reason they began allowing CNPC, which used to only explore and produce energy, and Sinopec, which only refined it, to begin encroaching on each other's turf in 1998. Investors may wonder if the motivation behind any merger is purely political. Authorities are investigating CNPC and Sinopec for graft, partly because of infighting among rival power centers in the Communist Party. Perhaps Beijing thinks it can more closely scrutinize a combined entity. For minority shareholders, that amplifies the risk of interference. The second mooted idea is combining Cnooc, which only explores and produces energy offshore, with refining and chemicals company Sinochem. This is a natural fit, since an integrated entity with more stable refining profits could better weather a volatile oil price. Yet China still regulates prices of refined products to some extent, hurting a future combination. Cnooc has performed better than its rivals partly because it has no consumer-facing business subject to controls, helping it return an average 15% on assets during the past five years, double PetroChina's return. The prices at which these potential deals are struck would matter. But investors should also be asking hard questions about the logic behind such mergers. If Beijing lets its oil giants fire redundant workers and close inefficient refineries, it is a big marker of reform. But if it is setting up a bigger monopoly for political reasons, that is another sign of dizzying state control. Write to Abheek Bhattacharya at abheek.bhattacharya@wsj.com Credit: By Abheek Bhattacharya
Subject: Acquisitions & mergers; Petroleum industry; Prices
Location: China Beijing China
Company / organization: Name: CNOOC Ltd; NAICS: 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111; Name: China Petrochemical Corp; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655696595
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655696595?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eni's Earnings Are Latest Victim of Falling Oil Prices; Italian energy giant says it will ramp up oil output, a sign that global oversupply won't ease
Author: Sylvers, Eric
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Industry participants are struggling to find a response to lower oil prices with Exxon Mobil Corp. preserving cash by reducing its spending on a share-buyback program.
Full text: MILAN--Eni SpA on Wednesday joined the ranks of large energy companies upended by falling crude prices, posting a fourth-quarter net loss of $2.67 billion. The Italian oil and natural-gas company said it would ramp up oil production in 2015, another sign that the world's oversupply of petroleum won't recede quickly. Oil companies, such as Total SA, and the Organization of the Petroleum Exporting Countries have said they would maintain or increase production despite crude prices that have fallen by half in recent months. Crude prices, trading at roughly $61 a barrel in London on Wednesday, remain comfortably above the company's break-even point of between $40 a barrel and $45 a barrel, the range at which its projects are profitable. But the oil-price collapse has forced Eni to write down the value of its oil and product inventories by [euro]860 million ($982 million) and book asset impairments and other after-tax charges of [euro]1.94 billion. It also resulted in a 60% drop in fourth-quarter operating profit at the company's exploration and production business. Overall, that amounted to a net loss of [euro]2.34 billion, while revenue declined 10% in the quarter to [euro]26.83 billion. The mounting losses come as Eni has increasingly focused on its core business of exploring for oil and gas, where it has one of the best recent track records in the industry. Eni has had particular success in prospecting in risky countries, especially in Africa where it is the largest Western producer of oil and gas. Eni last year said it would trim exposure to Africa , where it has faced difficulties including in the past few years in Libya, as it sells stakes in some of its recent finds and rebalances toward more stable developed countries. Chief Executive Claudio Descalzi said Wednesday on a call with analysts that Eni is producing about 300,000 barrels a day in Libya, compared with about 240,000 a day last year. Last month, Mr. Descalzi said things were improving in Libya, though since then oil fields have come under siege as the country's civil war intensifies and militants with ties to Islamic State have taken advantage of the power vacuum. Eni has evacuated all of its nonlocal personnel from its sites in Libya except for those working on offshore platforms. "We are constantly monitoring the situation [in Libya], which remains very volatile," Mr. Descalzi said. Eni last month--following in the footsteps of bigger rivals Royal Dutch Shell PLC, BP PLC and Chevron Corp.--said it would cut capital expenditures by as much as 15% in a bid to make up for lower revenue. Eni on Wednesday repeated its plan to cut spending. Industry participants are struggling to find a response to lower oil prices with Exxon Mobil Corp. preserving cash by reducing its spending on a share-buyback program. Many oil executives have said they are preparing for a sustained period of low oil prices. Brent, the global benchmark, has staged a modest rebound after dropping by more than half between June and January, to below $50 a barrel. Few analysts, though, expect it to reach $100 a barrel again soon. Every $1 drop in the price of Brent leads to a loss for Eni of about [euro]300 million in operating profit over the span of a year. Eni said it would increase its dividend, paying [euro]1.12 a share for the year, two European cents more than in 2013. The slight increase had been expected by many analysts, though some investors had feared a cut. The company's share price, helped by the dividend news and by operating profit having beaten analysts' expectations, rose 3.4% in Milan to close at [euro]16.25. Adjusted net profit, a closely watched figure that strips out one-time items and the change in the value of the company's inventories, dropped by two-thirds in the quarter to [euro]464 million. A higher tax rate, lower results from some investments and a large devaluation of stakes Eni holds in two companies to cover outstanding convertible bonds contributed to the decline. Production in the fourth quarter rose 4.5% to 1.65 million barrels of oil and equivalent natural-gas volumes a day. Eni said it expects production in 2015 to rise as new projects come online or are ramped up in Angola, Congo, the U.K., the U.S. and Norway. For the full year, Eni said its net profit fell 74% to [euro]1.33 billion from [euro]5.16 billion in 2013. Write to Eric Sylvers at eric.sylvers@wsj.com Credit: By Eric Sylvers
Subject: Petroleum industry; Net losses; Financial performance; Stock prices; Corporate profits; Capital expenditures; Natural gas; Crude oil prices; Petroleum production
Location: Libya Africa
People: Descalzi, Claudio
Company / organization: Name: Chevron Corp; NAICS: 324110, 211111; Name: BP PLC; NAICS: 447110, 324110, 211111; Name: Eni SpA; NAICS: 324110, 211111; Name: Royal Dutch Shell PLC; NAICS: 324110, 213112, 221210; Name: Total SA; NAICS: 447190, 324110, 211111; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655713477
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Cheaper Oil Drags Down Business Inflation, but Long Deflationary Period Unlikely; The producer-price index declined 0.8% last month, putting the gauge at the flatline for the 12-month period
Author: Leubsdorf, Ben
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Japan struggled for decades to overcome deflation , and worries about slowing inflation in the eurozone helped prompt the European Central Bank to unveil an aggressive bond-buying program last month .
Full text: U.S. inflation gauges are sliding toward negative territory for the first time in more than five years. But the oil-fueled tumble in prices is far from the kind of growth-sapping episodes of deflation that tend to worry economists. A Labor Department report Wednesday showed broad weakness in prices for everything from medical services to food. The producer-price index for final demand, which measures prices that businesses receive for their goods and services, fell a seasonally adjusted 0.8% in January from the prior month. The index was flat from a year earlier, slipping from 1.1% annual growth in December. Annual measures of consumer-price inflation could turn negative in coming months, one consequence of the tumble in prices at gas pumps. High inflation can damage an economy, but so can deflation when it signals underlying economic weakness. A broad and sustained decline in consumer prices, as seen in the Great Depression, can generate a downward spiral of lower spending, job losses and further price cuts. Some economists worry even more about deflation because it's harder to combat with traditional monetary-policy tools The Federal Reserve has said the ongoing inflation slowdown is likely transitory, driven by falling prices for energy products like gasoline. A number of officials at the central bank's Jan. 27-28 policy meeting said "the fall in energy prices should not leave an enduring imprint on aggregate inflation," according to minutes released Wednesday . Few economists see a risk of persistent deflation that would push down wages and prices for a prolonged period. "It's absolutely not going to happen," Pantheon Macroeconomics chief economist Ian Shepherdson said. "You need to have a broad decline in prices, and at the moment we absolutely do not have that by any stretch of the imagination." Several broad gauges of U.S. consumer prices saw year-over-year declines in 2009, at the tail end of the last recession, before bouncing back into the black. But deflation worries were among the reasons the Fed bought trillions of dollars of bonds in recent years. Japan struggled for decades to overcome deflation , and worries about slowing inflation in the eurozone helped prompt the European Central Bank to unveil an aggressive bond-buying program last month . U.S. inflation has undershot the Fed's 2% annual target for nearly three years. Still, the latest slowdown largely reflects the plunge in global oil prices since last June. Prices for energy goods tumbled 10.3% in January from the prior month, and the gasoline index sank 24% from December, according to Wednesday's PPI report. Food prices fell a more modest 1.1%, and prices excluding food and energy ticked down 0.1%. A drop in prices for many health-care services may have reflected a cut in Medicaid payments to physicians, according to economists at BNP Paribas. Two closely watched broad gauges of consumer prices could follow the PPI gauge down in the coming weeks. The Labor Department's consumer-price index rose just 0.8% in December , with the January reading due out Feb. 26. The Commerce Department's personal consumption expenditures price index--the Fed's preferred inflation gauge--posted annual growth of just 0.7% in December . January data is expected in early March. Economists will be looking for evidence of downward pressure on prices apart from those tied to energy. If underlying inflation measures continue to soften, "it does open the door to the possibility that there's more going on than simply weak energy prices," Bank of America Merrill Lynch economist Michael Hanson said. While a negative annual reading for a gauge like the CPI would be "a deflationary number," Mr. Hanson said, it probably wouldn't mean deflation "the way central bankers think about it."Ben Bernanke, in a 2002 speech during his first tour at the central bank, said "deflation per se occurs only when price declines are so widespread that broad-based indexes of prices...register ongoing declines." Price declines in a specific sector "are generally not a problem for the economy as a whole," he said. Janet Yellen, Mr. Bernanke's successor as Fed chief, said in December that falling energy prices will push down inflation gauges "and may even spill over, to some extent, to core inflation." But, she said, "we see these developments as transitory." Write to Ben Leubsdorf at ben.leubsdorf@wsj.com Credit: By Ben Leubsdorf
Subject: Inflation; Central banks; Recessions; Consumer Price Index; Price cuts
Location: United States--US
Company / organization: Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Economy
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655730962
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655730962?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Eni Struggles to Stand Tall Amid Oil's Fall; Italian Energy Company Needs to Show Flexibility to Withstand Lower Oil Prices
Author: Thomas, Helen
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
After working capital, Eni's operating cash flow was [euro]12 billion in 2014; its capital investment was [euro]12.2 billion.
Full text: When oil falls down a well, Eni is apt to lose its balance. The Italian oil and gas producer cut its dividend in 2009 when oil plummeted during the financial crisis. It has been at the forefront of concerns about investors' payouts in the recent oil rout . So far, the company has done a decent job of toughing it out, maintaining its dividend on Wednesday. But Eni needs to show flexibility to withstand oil prices that could stay lower for longer. Eni's operations have improved. Renegotiation of long-term gas contracts meant the company's gas and power business was in the black last year, reversing heavy losses. Oil's fillip to refiners helped its downstream business. Its balance sheet progress is more debatable. True, net debt fell [euro]2.1 billion ($2.4 billion), or 13%, in the fourth quarter. But a good chunk of Eni's record quarterly cash flow haul is owed to working capital movements: Eni expects it can further improve on this front from its gas and power business, but the rate and sustainability is hard to predict. And a fall in its net debt-to-equity ratio to 22%, while leaving Eni with headroom for a tough 2015, was partly due to the strong U.S. dollar. Without a currency boost to its equity, through subsidiaries that report in dollars, leverage would have been 24%, only slightly down on last year. Keeping debt under control remains the challenge. After working capital, Eni's operating cash flow was [euro]12 billion in 2014; its capital investment was [euro]12.2 billion. Asset sales helped bridge the gap but Eni's dividend of [euro]4 billion is effectively uncovered by cash flows. Were oil prices this year to average $60 a barrel, versus 2014's $100, that suggests another [euro]5.5 billion hit to Eni's cash flow--a substantial hole to fill. Eni says it can cut capital expenditure by [euro]2 billion this year, without affecting production growth. But more cutting may be needed, while Eni's ability to sell stakes in its exploration finds remains key. Angst around Eni's dividend appears to have subsided this year . Its yield has fallen and contracted relative to the sector. However, that owes something to the lift upcoming European Central Bank bond buying has given to southern European stocks. Eni still needs to show it has a firm footing. Write to Helen Thomas at helen.thomas@wsj.com Credit: By Helen Thomas
Subject: Cash flow; Capital expenditures; Petroleum industry; Cash flow statements
Company / organization: Name: European Central Bank; NAICS: 521110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655750733
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655750733?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Pemex to Postpone Some Deep-Water Exploration, CEO Says; Chief Executive Lozoya cites drop in oil prices, budget cuts
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Mexican state-owned oil company Petróleos Mexicanos will likely postpone some unstarted deep-water exploration projects as a result of the drop in oil prices and its recently announced budget cuts, Chief Executive Emilio Lozoya said Wednesday. In an interview with Mexico's Radio Fórmula, Mr. Lozoya said Pemex is aiming to keep to a minimum the impact the cuts will have on exploration and production. However, some exploration projects in deep waters of the Gulf of Mexico could be delayed, he added. Pemex will make around half of the $8.3 billion in federal government budget cuts this year. The cuts will include delays in a number of refinery upgrades, reductions in spending, and some layoffs. "There are exploration projects in some deep-water fields, not all of them, but the higher-risk ones where if we haven't started they will be postponed," Mr. Lozoya said. He didn't specify any fields. Before the government opened bidding of oil and gas blocks to private companies under new energy laws passed last year, Pemex was assigned about 83% of the country's proven and probable reserves, and about a fifth of prospective, or undiscovered reserves. They include areas where Pemex is already producing oil and gas, and a number of deep-water deposits. Pemex has made some deep-water discoveries, but doesn't have any commercial production from the fields. The drop in oil prices and budget cuts are an opportunity to lower costs, Mr. Lozoya said, adding that with oil at $100 a barrel, costs for large plants and deep-water projects almost doubled in the past four years. The new energy laws also allow Pemex, for the first time, to form joint ventures with private firms to develop projects, which could lower the state company's capital needs. Mr. Lozoya said Pemex has average crude oil production costs of $23 per barrel, which makes its projects highly profitable even with oil currently around $50 per barrel. Therefore, Pemex expects to be able to bring on board private partners, who would put up capital, he added. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655756766
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655756766?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Pemex Fights Fuel Thieves With New Tactic; Oil giant will stop moving engine-ready fuels through pipelines
Author: Iliff, Laurence
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--Petróleos Mexicanos is trying a new tactic to deter fuel thieves who tap into its pipelines and steal hundreds of millions of dollars in refined products each year: the pipelines will no longer carry gasoline or diesel that is ready for use. Pemex, as Mexico's national oil company is commonly known, said Tuesday the gasoline and diesel it transports will lack additives that make the fuels usable for cars, trucks and industrial plants. Those additives will be mixed in at dozens of distribution centers located across Mexico. Emilio Lozoya, the company's chief executive, said Wednesday that the theft is costing Pemex about $1.1 billion a year as well as creating an environmental hazard, as the illegal tapping often results in gasoline and diesel spilling to the ground, sometimes near populated areas. "It's a very serious problem for the company but above all it's a grave problem for the nation," he said in a radio interview. "The resources that they are illegally extracting belong to the Mexican state." Pemex is currently the sole supplier of gasoline and diesel in the country, which consumes nearly 1.2 million barrels a day of the fuels. The monopoly will change beginning in 2017 under an energy overhaul signed into law last year that will permit new service-station brands and the purchase of fuels on the open market. Currently Mexico imports about half of its gasoline needs. The new antitheft measure will be accompanied by an advertising campaign to discourage motorists from buying fuel that might be spurious, such as that sold outside of Pemex service stations and at unauthorized distributors along highways and in small towns where detection becomes more difficult. "It is recommended that consumers make sure the fuels they are using come from Pemex terminals, and not to acquire gasoline and diesel outside of service stations and authorized distributors," Pemex said in a statement, warning that unfinished fuels can cause engine damage. Pemex's unfinished gasoline and diesel will have a different color than the finished versions of the products, making the work of inspectors easier. Mr. Lozoya said it would be very difficult for the black-marketeers to finish the fuels on their own. "I have seen comments in the press that now the criminals will do the mixing themselves. It's easy to mix additives into a small barrel of gasoline but not into the thousands of liters that are being extracted from Pemex pipelines." George Baker, a Houston-based oil analyst who follows Pemex, said there still could be problems if motorists unwittingly buy unfinished fuels at Pemex service-station franchises, which have been known to buy fuels from the black market to save money or are pressured by organized crime. "Cars are breaking down and now we're going to track down where they bought their gasoline?" he said. "How's that going to work out?" Still, Mr. Baker applauded Pemex for trying a novel approach. "Even if it doesn't perfectly solve all of Pemex's problems, it is making it more difficult for the narcos," said Mr. Baker, referring to organized-crime groups that deal in drugs as well as stolen petroleum products. "It's disrupting their business and their income, and that's what you want to do." Pemex is investing in technology to better monitor pipelines, but officials have said the task is daunting because of the sheer expanse of the national pipeline network. The company is launching a pilot project in limited areas and will soon know how the public reacts to its plan. Write to Laurence Iliff at laurence.iliff@wsj.com Credit: By Laurence Iliff
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655777843
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655777843?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Rail Line Reopens After Ontario Crude-Oil Train Derailment; Canadian National Railway expects delays until resumption of normal traffic flows
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Canadian National Railway Co., the train operator, posted the update on its website and said customers should expect some delays in the ramp-up to normal traffic flows.
Full text: TORONTO--The site of a weekend crude-oil train derailment in Northern Ontario that blocked a main rail line to Eastern Canada was cleared late Tuesday and the line has reopened. Canadian National Railway Co., the train operator, posted the update on its website and said customers should expect some delays in the ramp-up to normal traffic flows. "Trains have resumed running through the derailment area at a reduced speed due to the ongoing cleanup work at the site," Canadian National spokesman Patrick Waldron said in an emailed statement Wednesday. Late Saturday, a 100-car Canadian National train carrying crude oil derailed near the town of Timmins in northern Ontario, causing a fire but no reported injuries. The derailment, which, according to early assessments, involved just under 30 cars, occurred in a remote wooded area and blocked the main rail line between Manitoba and Canada's east coast. The tanker cars involved were CPC-1232 model cars, Mr. Waldron confirmed. Those modern tankers, hailed by the rail industry as safe , are the same as ones involved in a crude-oil train derailment and explosion in West Virginia on Monday. Two tanker cars involved in the derailment are still on fire, Mr. Waldron said. "Firefighting experts have allowed a controlled fire involving two tanker cars to continue to burn. Those cars are a safe distance from the tracks and present no danger to rail operations or ongoing cleanup work," he said. The Montreal-based railway, Canada's biggest, is working with the provincial environment ministry to clean up the spill on the snow near the derailment site, Mr. Waldron said in an earlier emailed statement. He noted that the spill had been contained in the derailment area. The incident is under investigation by Canada's transportation safety agency. Crude-by-rail transportation has risen in recent years because of gains in North American oil production, but the practice has been under scrutiny since an oil train derailed and exploded in a small Quebec town in 2013, killing 47 people. That incident, along with numerous others, prompted regulators in Canada and the U.S. to tighten rules around the shipment of crude by rail. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Railroad accidents & safety; Petroleum production
Location: Manitoba Canada
Company / organization: Name: Canadian National Railway Co; NAICS: 926120, 482111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655797794
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Central Bank Cuts Mexican Growth Forecasts; Weaker-than-expected global expansion, risk of more-volatile world markets and continued lower oil prices cited
Author: Harrup, Anthony
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract: None available.
Full text: MEXICO CITY--The Bank of Mexico on Wednesday lowered its forecast for economic growth for the nation this year, citing weaker expected global growth and risks of increased international market volatility and further declines in oil prices. In its quarterly inflation report, the central bank said it expects gross domestic product to grow between 2.5% and 3.5% this year, less than its previous estimate of 3%-4%. For 2016, the bank lowered its forecast growth range to 2.9%-3.9% from 3.2%-4.2%. The central bank said GDP likely expanded 2.1% in 2014, which is in line with the consensus of private economists. The National Statistics Institute is scheduled to report fourth-quarter GDP on Friday. On the external front, lower-than-expected world growth and heightened uncertainty in financial markets are risks to Mexican economic activity. Mexico is a major oil producer. Further declines in oil prices and lower Mexican oil production could affect the country's budgets and external accounts, while social unrest in Mexico could have a negative impact on spending decisions, the central bank said. Meanwhile, upside possibilities in the forecast include better-than-expected U.S. economic performance and positive investor reaction to the implementation of Mexico's economic overhauls. The U.S. accounts for about 80% of Mexico's exports. The central bank expects a marginal impact on growth from the budget cuts announced last month by the government that were a preventive measure, given the drop in oil prices and expectations of more difficult financing conditions ahead. Bank of Mexico Gov. Agustín Carstens told a news conference that the spending cuts should contribute to greater investor confidence, as they will help the government stick to its plan to narrow fiscal deficits gradually in coming years. "It makes all the sense in the world to depend less on public debt," he said, adding that the fiscal restraint contributes to an orderly depreciation of the peso and eases upward pressure on interest rates. The central bank kept its overnight lending rate target at a record-low 3% last month, but is widely expected to raise it once the U.S. Federal Reserve begins increasing rates from near zero. Mr. Carstens said the central bank doesn't know whether or not it will try to get ahead of the Fed in raising rates. "We can't determine a reaction which depends on what the Fed will do. We don't know when or how the Fed is going to act," he said. Barclays Mexico economist Marco Oviedo said the central bank report "confirms the belief that there is a high probability that Banxico [Bank of Mexico] will react to a Fed intention to start hiking." The Bank of Mexico maintained its expectation, expressed in recent monetary policy statements, that inflation will reach its 3% target by midyear and end 2015 below that level. Core inflation, which excludes energy and volatile prices for fruits and vegetables, is expected to remain below 3% for most of this year. Annual inflation as measured by the consumer price index eased to 3.1% in January from 4.1% at the end of 2014. Mr. Carstens said the bank won't rest on its laurels once the 12-month inflation rate reaches the target. "It isn't enough to reach 3%, but that it should consolidate at those levels," he said. Write to Anthony Harrup at anthony.harrup@wsj.com Credit: By Anthony Harrup
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655836129
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Explosion at Exxon Mobil Refinery Raises Gas-Price Fears; If facility remains offline for long, local retail gas prices could rise to $3.25 a gallon, an analyst says
Author: Ailworth, Erin; Sider, Alison
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Reports from workers indicated the problem may have started at the refinery's fluid catalytic cracking unit, according to Dave Campbell, secretary and treasurer of the United Steelworkers Union Local 675.
Full text: An explosion at Exxon Mobil Corp.'s refinery in Torrance, Calif., on Wednesday sparked worries the facility could remain offline for months, pushing up local spot gasoline prices. Spot prices for California gas rose nearly 12 cents to close at $2.01, said Tom Kloza, global head of energy analysis at the Oil Price Information Service. "I think the market is telling you they expect that unit to be down through April," he said, adding that if the refinery remains out of service for that long, retail gas prices could rise to as much as $3.25 a gallon, from a recent average in California of about $2.80. Exxon said the explosion at its refinery about 20 miles south of Los Angeles happened just before 9 a.m. local time. The company said it is investigating the cause of the incident. Reports from workers indicated the problem may have started at the refinery's fluid catalytic cracking unit, according to Dave Campbell, secretary and treasurer of the United Steelworkers Union Local 675. The union has 274 members at the refinery. Exxon's plant isn't one of the nine refineries where workers are currently on strike in a standoff between the industry and the United Steelworkers union that is currently in its third week. Police and fire authorities in Torrance initially asked those in the area to shelter-in-place as ash floated through the air and shut down a nearby street. Four contract workers were taken to Long Beach Medical Center with minor injuries. "I think we got lucky with this one," said David Dumais, deputy fire chief of the Torrance Fire Department. He said the explosion caused a small ground fire that was quickly extinguished and caused a small gasoline leak on plant property. Write to Erin Ailworth at Erin.Ailworth@wsj.com and Alison Sider at alison.sider@wsj.com Credit: By Erin Ailworth and Alison Sider
Subject: Steel industry; Petroleum industry; Price increases; Fires; Explosions; Gasoline prices; Strikes
Location: California Los Angeles California
Company / organization: Name: United Steelworkers of America; NAICS: 813930; Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655867323
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Marathon Oil Further Reduces Projected 2015 Capital Spending; Company expects production excluding Libya to increase 5% to 7% year over year
Author: Armental, Maria
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]18 Feb 2015: n/a.
Abstract:
Marathon Oil Corp. further reduced its projected capital spending for 2015 amid lower commodity prices.
Full text: Marathon Oil Corp. further reduced its projected capital spending for 2015 amid lower commodity prices. The Houston company now expects to spend $3.52 billion in investment and exploration, down from its December estimate of $4.3 billion to $4.5 billion. By slashing exploration spending from the year-ago period and narrowing focus on its three key U.S. resource plays, Marathon Oil said it expects production excluding Libya to increase 5% to 7% year over year. Marathon ramped up capital spending and sold assets to narrow its operations and boost output. Last year, for example, it sold its Norwegian business but decided to keep its U.K. North Sea business after bids came in too low. In the latest period, total sales volume from continuing operations--which excludes its Libya operations--rose nearly 17%, while net production available for sale rose nearly 13%. Exploration expenses more than doubled to $479 million from the year-earlier period. Overall, Marathon Oil reported a profit of $926 million, or $1.37 a share, up from $375 million, or 54 cents a share, a year earlier. Excluding items, the company posted a loss from continuing operations was of 13 cents, compared with a year-earlier profit of 26 cents. Revenue fell 2% to $2.5 billion. Analysts surveyed by Thomson Reuters expected three cents a share on $2.42 billion in revenue. Shares edged down 0.9% to $28.75 in recent after-hours trading. Through Tuesday's close, the stock had fallen 13% over the past 12 months. Write to Maria Armental at maria.armental@wsj.com Credit: By Maria Armental
Subject: Petroleum industry; Exploration & development expenses; Financial performance; Profits
Location: Libya United States--US
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Marathon Oil Corp; NAICS: 486110, 324110, 211111, 213112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 18, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655891625
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Weak Yen Leads to Jump in Japanese Exports in January; Surging Exports, Drop in Oil Prices Brings About 58% Smaller Trade Deficit
Author: Obe, Mitsuru
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract: None available.
Full text: TOKYO--Japan's exports continued to rebound in January while imports shrank, as the yen's sharp fall and the nation's powerful manufacturing industry helped the country deal with a weak domestic economy. Exports for the month grew 17% from a year ago, according to data released Thursday by the Ministry of Finance. Imports decreased 9% as the price tag for inbound shipments of crude oil was dramatically smaller. The trade balance came to a deficit of ¥1.18 trillion, marking the 31st straight month of shortfalls. But that was 58% less than the trade deficit the country logged in January 2014. Japan tends to post larger trade deficits in January, when exporters typically are away from the market. While the headline figure was positive, there is no guarantee exports will continue to rise in this fashion. "The global economy faces the prospect of subpar growth, notwithstanding a boost from the recent drop in oil prices," said Naoyuki Shinohara, deputy managing director of the International Monetary Fund, in Tokyo Wednesday. Japanese exporters have been helped by a sharply weaker yen and strong demand for electronics components from rapidly growing Chinese smartphone makers. Demand has also been strong from the U.S., whose economy has been growing at a faster-than-expected pace in recent quarters. Japan's gross domestic product data, released Monday, confirmed these trends. Exports grew 2.7% in the fourth quarter of 2014 from the previous three-month period, or an annualized pace of 11%. Reviving exports has been a key policy goal of Prime Minister Shinzo Abe, who has pushed for aggressive monetary easing under his "Abenomics" program, unleashing a 30% fall in the yen against the dollar. For now, however, export growth has been largely fueled by growth in external demand, rather than by any changes caused by Abenomics. The Bank of Japan's export-price indicator shows most Japanese exporters are still refraining from cutting the prices of their products, opting instead to pocket fatter profits created by the cheaper currency. With exports rising and imports falling, some economists now expect the trade balance to turn positive as early as this spring. But others caution against premature optimism. "Japan's tight labor market means companies have little room for increasing exports," said Ryutaro Kono, chief economist at BNP Paribas. Last year, trade deficits totaled ¥13 trillion, or about 2.6% of the nation's GDP. Mr. Kono predicts that deficits will narrow to around 1% of GDP this year, but won't be eliminated entirely. Write to Mitsuru Obe at mitsuru.obe@wsj.com Credit: By Mitsuru Obe
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 16559050 39
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Porous Syria-Turkey Border Poses Challenge in Fight Against Islamic State; Fighters, Oil and Military Supplies Flow Across Frontier
Author: Trofimov, Yaroslav
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
The issue dates back to the outset of the Syrian conflict in 2011, when Turkey, eager to speed up the ouster of President Bashar al-Assad's regime, essentially threw its border with Syria open to rebels and foreign fighters, including many who ended up joining Islamic State.
Full text: KARKAMIS, Turkey--Officially, Turkey's border with the Islamic State-run region of Syria is closed to all traffic. That, however, doesn't stop some two dozen professional smugglers from accosting prospective clients in full view of a lone Turkish soldier, a few yards from the Karkamis border gate. How hard is it to get across? "Only 50 lira," or $20, offered Maher, a 35-year-old Iraqi smuggler who said he had been imprisoned in Abu Ghraib and showed off the scars he said were from fighting U.S. forces in Iraq. "It's very easy--you just walk for five minutes and you are in Syria," he added, beckoning a foreigner to follow into the wooded hills. "There are a thousand roads, it is all open." Across the railway tracks from Karkamis sits the Syrian city of Jerablus, under Islamic State's rule. It is an hour's drive from the main metropolis in the this part of Turkey, Gaziantep. The porousness of Turkey's 500-mile border with Syria has become a strategic problem for Western efforts to defeat Islamic State and prevent terrorist attacks at home. The militant group controls roughly half the frontier, the main gateway for the influx of thousands of foreign fighters into the battlefields of Syria and Iraq. It costs as little as $200 to fly to Gaziantep from Europe, and European citizens can usually travel here without passports, just on their national ID cards. The border problem became evident when Hayat Boumeddiene, the partner of an Islamic State follower involved in the Paris terror attacks last month, used the well-trodden path not far from here to escape into Syria . And it isn't just people who are crossing: Islamic State smuggles out oil and brings in military supplies, too, Western diplomats and security analysts say. The issue dates back to the outset of the Syrian conflict in 2011, when Turkey, eager to speed up the ouster of President Bashar al-Assad's regime, essentially threw its border with Syria open to rebels and foreign fighters, including many who ended up joining Islamic State. Some 1.6 million Syrian refugees have settled in Turkey since then. "Turkey's policy from 2011 and until mid-2014 was that anyone and everyone who wanted to fight Assad was welcome to go to Syria and do so," said Soner Cagaptay, director of the Turkish Research Program at the Washington Institute for Near East Policy, a think tank. "That policy has ended now--but it's very hard to go back to a nonporous border because you have already allowed all these smuggling networks to be established." Turkish officials acknowledge the difficulty of protecting the Syrian frontier, pointing out that it cuts through areas where populations on both sides are linked by historic, family and tribal ties. Yet, Ankara said it is actively cracking down on the influx of foreign fighters to Syria, establishing new "risk analysis units" to weed out suspected jihadists in airports and collaborating closely with European intelligence agencies. Turkey has deported 1,100 foreigners suspected of wanting to join the fight in Syria and Iraq, and added 5,000 names to its no-entry list last year alone, said a foreign ministry official. "For a foreign terrorist fighter, Turkey is the last stop before the destination point [in] a journey that should not begin at all," the official said. "Foreign terrorist fighter travel cannot be stopped with a blame game....Measures should be adopted by all, for all. To do this, our efforts should concentrate on spotting and stopping foreign fighters at their country of departure." Gonul Tol, executive director of the Center for Turkish Studies at the Middle East Institute in Washington, said there has been real change in Turkey's attitude to securing the Syrian border since Islamic State seized a large part of Iraq last summer. "It is a matter of capacity at this point, whereas in the past it was a matter of willingness," she said. Whenever Western governments pass specific information, Turkish officials now usually act on it and detain or follow suspects--often several cases a day, Western diplomats said. But for every jihadist stopped in Istanbul airport, several others make it through to the border areas in southern Turkey from where they usually proceed into Syria unmolested. This, some Western officials said, is because more vigorous efforts to seal the border would expose Turkey to retaliation from Islamic State, which has thousands of followers both among Turkey's own population and among the Syrian refugees. A Russian widow of a Norwegian Islamic State fighter blew herself up in a police station in Istanbul's tourist district of Sultanahmet, killing one officer, last month. Some Western officials said they viewed the attack as a warning shot by Islamic State--a signal that the militant group has the capacity to cripple Turkey's critical tourism industry should the government really shut down the frontier. "Turkey is trapped now--it created a monster and doesn't know how to deal with it," one Western diplomat said. A smuggler and former fighter with the U.S.-backed Free Syrian Army rebel group who goes by the name Abu Abdu said he knows firsthand how widespread Islamic State's network inside Turkey has become. He said he already survived two assassination attempts by Islamic State, one in the border city of Kilis and one in the regional hub of Gaziantep. Abu Abdu's former unit specialized in bringing foreign fighters into Syria, and was headed by his former schoolteacher in Aleppo, a veteran of Iraqi and Chechen wars. Early last year, the teacher and most other members of the 84-man unit joined Islamic State, also known as ISIS. Among those who, like Abu Abdu, refused, 11 have already been hunted down and killed, he said. "ISIS has many spies here in Turkey, and not just spies but killers. They have points where they can cross the border anytime they want," Abu Abdu said. "The Turks are afraid of ISIS, and so they don't want to make problems for ISIS." Write to Yaroslav Trofimov at yaroslav.trofimov@wsj.com Credit: By Yaroslav Trofimov
Subject: Religious fundamentalism; Islamism
Location: Turkey Iraq Syria
People: Assad, Bashar Al
Company / organization: Name: Abu Ghraib Prison-Iraq; NAICS: 922140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655964684
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655964684?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News: Inflation Softness Driven by Cheap Oil
Author: Leubsdorf, Ben
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]19 Feb 2015: A.2.
Abstract:
A broad and sustained decline in consumer prices, as seen in the Great Depression, can generate a downward spiral of lower spending, job losses and further price cuts.
Full text: U.S. inflation gauges are sliding toward negative territory for the first time in more than five years. But the oil-fueled tumble in prices is far from the kind of growth-sapping episodes of deflation that tend to worry economists. A Labor Department report Wednesday showed broad weakness in prices for everything from medical services to food. The producer-price index for final demand, which measures prices that businesses receive for their goods and services, fell a seasonally adjusted 0.8% in January from the prior month. The index was flat from a year earlier, slipping from 1.1% annual growth in December. Annual measures of consumer-price inflation could turn negative in coming months, one consequence of the tumble in prices at gas pumps. High inflation can damage an economy, but so can deflation when it signals underlying economic weakness. A broad and sustained decline in consumer prices, as seen in the Great Depression, can generate a downward spiral of lower spending, job losses and further price cuts. Some economists worry even more about deflation because it's harder to combat with traditional monetary-policy tools. The Federal Reserve has said the ongoing inflation slowdown is likely transitory, driven by falling prices for energy products like gasoline. And few economists see a risk of persistent deflation that would push down wages and prices for a prolonged period. "It's absolutely not going to happen," Pantheon Macroeconomics chief economist Ian Shepherdson said. "You need to have a broad decline in prices, and at the moment we absolutely do not have that by any stretch of the imagination." Several broad gauges of U.S. consumer prices saw year-over-year declines in 2009, at the tail end of the last recession, before bouncing back into the black. U.S. inflation has undershot the Fed's 2% annual target for nearly three years. Still, the latest slowdown largely reflects the plunge in global oil prices since last June. Two closely watched broad gauges of consumer prices could follow the PPI gauge down in the coming weeks. The Labor Department's consumer-price index rose just 0.8% in December, with the January reading due out Feb. 26. The Commerce Department's personal consumption expenditures price index -- the Fed's preferred inflation gauge -- posted annual growth of just 0.7% in December. January data are expected in early March. Credit: By Ben Leubsdorf
Subject: Recessions; Consumer Price Index; Price cuts; Crude oil; Inflation
Location: United States--US
Classification: 9190: United States; 1110: Economic conditions & forecasts
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Feb 19, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655970136
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655970136?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil's Volatility Reflects Debate: Is Worst Over Yet? Stockpiles swell but some traders, expecting worse, take it as a cue to buy
Author: Friedman, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
"The big question is, when do those refineries come back?" said Michael Cohen, analyst at Barclays PLC. If global demand for fuels doesn't pick up, he said, "you're processing all those barrels and sending out the products into a world that doesn't need it." In January, Mr. Kubie's fund added to its investments in exchange-traded funds that track the stock prices of oil producers.
Full text: New evidence of surging U.S. oil supplies sent prices on a roller-coaster ride Thursday, reflecting the growing divide among traders over whether an eight-month rout is over. The U.S. Energy Information Administration said oil inventories grew by 7.7 million barrels in the week ended Feb. 13. Analysts said swelling stockpiles are a sign that producers aren't cutting back on output despite a more than 50% collapse in prices since last summer. In its report, the EIA said U.S. oil production was on track to reach a 42-year high this month. But traders in the futures market had been bracing for much worse, and many took the data as a cue to buy. On Wednesday, an industry group had estimated a jump of 14.3 million barrels for last week, which would have been a record had it been borne out in the government data. Although both reports depend on surveys of industry participants, the EIA survey is mandatory for companies to complete. U.S. oil futures, at one point down more than 5%, ended the day off by 1.9% at $51.16 a barrel on the New York Mercantile Exchange. Brent, the international benchmark, briefly turned positive and settled down 0.5% at $60.21 a barrel on ICE Futures Europe. The weekly U.S. supply data is shaping a debate within the oil market about whether prices have hit bottom. Prices rallied this month, reaching a high for the year on Tuesday, buoyed in part by reports that U.S. producers were cutting back on drilling. But many investors and analysts still harbor doubts about whether prices are low enough to curb production or spur new demand, two ingredients needed for a rebound. The uncertainty has triggered huge daily price moves in both directions this year. "I think there's a bit of a fight going on" between bearish investors concerned about high supplies today and bulls who expect low prices to lead to production cuts, said Bart Melek, head of commodities strategy at TD Securities. "The market is a little bit over-optimistic...there's an awful lot of crude still coming into inventory." U.S. crude inventories are at their highest on record, according to weekly data going back to August 1982. Monthly data, which don't exactly line up with weekly data, show that stockpiles last exceeded this level in 1930. The oversupply is being worsened by a seasonal slump in demand, which typically falls in February and March as refiners shut units for seasonal maintenance. Analysts expect supplies to continue to build in the coming weeks. Refineries operated at 88.7% of capacity last week, down 1.3 percentage points. "The big question is, when do those refineries come back?" said Michael Cohen, analyst at Barclays PLC. If global demand for fuels doesn't pick up, he said, "you're processing all those barrels and sending out the products into a world that doesn't need it." Traders are closely watching inventory levels in Cushing, Okla., the delivery point for the Nymex contract. Cushing supplies rose by 3.7 million barrels last week to 46.3 million barrels, the highest level since July 2013. In the past, when Cushing supplies have risen, the U.S. benchmark oil price has fallen relative to global prices. U.S. oil futures trade nearly $9 a barrel below Brent, from near parity a month ago. The large nationwide storage build "pretty much stopped [the rally] in its tracks," said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "Supply still outweighs demand overall." While still-growing oil inventories are pushing prices lower, some investors saw bullish signs for fuels. Supplies of distillate, a class of fuels that includes diesel and heating oil, fell by more than expected in Thursday's data. Some see frigid temperatures in the eastern U.S. boosting demand for those products to heat homes and fuel power plants. Diesel futures rose 1.8% to $1.9938 a gallon on the Nymex. Gasoline futures rose 2.7% to $1.6162 a gallon. The weekly count of rigs drilling for oil in the U.S. has dropped in recent weeks to the lowest total since August 2011, and a number of oil companies have lowered their spending plans for this year. "The shale wells tend to deplete very fast," said Scott Kubie, chief investment strategist at CLS Investments LLC, which manages about $7 billion. In January, Mr. Kubie's fund added to its investments in exchange-traded funds that track the stock prices of oil producers. Even if prices fall further in the near term, Mr. Kubie said he believes prices will increase "somewhere around six months out." But a drop in drilling and investment could still take months to result in lower oil output, analysts say. Meantime, supplies will continue to rise, putting more downward pressure on the market. "The dramatic fall in rig counts does not automatically translate into a fall in production," said Michael Hulme, commodity fund manager at Carmignac Gestion Group, which has [euro]50 billion in assets under management. "Inventories are still building sharply." Georgi Kantchev contributed to this article. Write to Nicole Friedman at nicole.friedman@wsj.com Credit: By Nicole Friedman
Subject: Petroleum refineries; Petroleum industry; Inventory; Petroleum production
Location: United States--US
Company / organization: Name: Barclays PLC; NAICS: 522110, 523110, 551111; Name: New York Mercantile Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1655996200
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1655996200?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Stocks Slip Amid Greece Talk, Oil Prices; Germany rejects Greece's bailout extension request
Author: Strumpf, Dan
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
Shares of Dow component Wal-Mart Stores Inc. fell 3.2% after the company reported higher earnings of $4.97 billion but an increase in revenue that fell short of analyst projections, and a plan to raise salaries for their employees. Priceline Group Inc. shares climbed 8.5% after posting a better-than-expected 19% increase in revenue in the quarter ended December, though it said bookings are expected to slow and foreign currency effects will weigh on future performance.
Full text: U.S. stocks slipped Thursday, as investors focused on negotiations over Greece's bailout and a renewed decline in oil prices. The Dow Jones Industrial Average fell 44.08, or 0.2%, to 17985.77. The S&P 500 index eased 2.23, or 0.1%, to 2097.45. The Nasdaq Composite rose 18.34, or 0.4%, to 4924.70. Investors kept their focus on events in Europe after Germany rebuffed a request by Greece to extend its bailout, set to expire at the end of February. Greece and its creditors have been in negotiations for weeks over the broad terms of new financing for the country, though most investors expect a deal will emerge that keeps Greece in the eurozone. "Everyone is sitting here waiting to figure out what happens with Greece," said Jesse Lubarsky, equity trader at Raymond James in New York. Although the talks over Greece's bailout have captured investor attention in recent weeks, many investors say a notable calm has settled over the stock market in recent weeks. Last month, the Dow swung by 1% or more during 10 sessions in January. But far in February, it has only done so only three times Meantime, stocks have resumed their march toward record levels. The Dow is just 0.1% below its record of 18053.71 and the S&P 500 is 0.4% away from Tuesday's closing record of 2100.34. The Nasdaq Composite, meanwhile, is 2.5% of its high of 5048.62 last reached in March 2000. Still, many long-term investors remain bullish on U.S. stocks. Rex Macey, chief allocation officer at Wilmington Trust, said he thinks stocks still have room to head higher, given the steadily improving U.S. economy. "We've had this view that with the positive economy, we like equities better than bonds," he said. Energy stocks eased after oil prices extended their recent slide. Crude-oil futures have fallen 4.4% the last two sessions, settling Thursday at $51.16 a barrel. Oil prices have tumbled by more than half since the middle of last year. The S&P 500 energy index fell 0.8%. In the Dow, Chevron fell 1.9%. Exxon Mobil shares lost 1.7%. "There's weakness in oil prices that are a little bit at play," said Gordon Charlop, managing director at Rosenblatt Securities. "That raises a specter of uncertainty." European stocks recovered early losses, with Germany's DAX settling 0.4% higher. The Stoxx Europe 600 index gained 0.3%. Fourth-quarter earnings reports continued to trickle in Thursday. Shares of Dow component Wal-Mart Stores Inc. fell 3.2% after the company reported higher earnings of $4.97 billion but an increase in revenue that fell short of analyst projections, and a plan to raise salaries for their employees. Shares of T-Mobile US Inc. gained 2.7% after the country's fourth-largest wireless carrier said it swung to a quarterly profit as revenue surged. Priceline Group Inc. shares climbed 8.5% after posting a better-than-expected 19% increase in revenue in the quarter ended December, though it said bookings are expected to slow and foreign currency effects will weigh on future performance. In economic news, the Labor Department said jobless claims fell by 21,000 to 283,000 in the week ended Feb. 14. Economists surveyed by The Wall Street Journal had expected 290,000 claims. Japanese stocks hit a 15-year high Thursday. The Nikkei Stock Average advanced 0.4% to 18264.79, the highest level since May 2000. In commodity markets, gold futures added 0.6% to $1,207.10 an ounce. The yield on the 10-year Treasury note rose to 2.112% from 2.067%, as prices fell. Saumya Vaishampayan contributed to this article. Write to Dan Strumpf at daniel.strumpf@wsj.com Credit: By Dan Strumpf
Subject: Stock exchanges; Financial performance; Investments; Bailouts
Location: Germany Greece United States--US Europe
Company / organization: Name: Exxon Mobil Corp; NAICS: 447110, 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656049812
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656049812?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibit ed without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Noble Energy's Revenue Falls on Lower Oil Prices; Company reduces plans for 2015 capital investments
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
Noble Energy has been selling its noncore assets, positioning itself to focus on horizontal drilling operations in the U.S. and offshore projects in the Gulf of Mexico, the Mediterranean and west Africa.
Full text: Noble Energy Inc. said the sharp drop in oil prices dented its revenue in the fourth quarter, offsetting higher sales volumes. The company also outlined a 40% reduction in planned capital investments for 2015 to $2.9 billion, following a number of other energy companies that have slashed their spending in the wake of sharply lower oil prices. Noble Energy has been selling its noncore assets, positioning itself to focus on horizontal drilling operations in the U.S. and offshore projects in the Gulf of Mexico, the Mediterranean and west Africa. Major initiatives have included projects in Israel and Equatorial Guinea. It has instead been focusing on developing the DJ Basin and Marcellus Shale. Chief Executive David Stover said this development has been crucial in helping grow volume and stabilize the company during "the dramatic commodity-price volatility over the last several months." Additionally, the company has suspended nearly all investment in Israel due to antitrust issues related to two natural-gas reservoirs. Chief Executive David Stover said on a call with analysts that the company would wait to make further investments in Israel and that "a predictable and stable regulatory environment is a critical requirement." For the most recently ended quarter, Noble Energy reported a profit of $402 million, or $1.05 a share, up from $134 million, or 37 cents a share, a year earlier. Excluding special items such as write-downs, earnings were 38 cents a share in the quarter, down from 53 cents. Revenue fell to $1.07 billion from $1.33 billion. Analysts polled by Thomson Reuters had expected earnings of 34 cents a share and revenue of $1.25 billion. Total sales volume grew 8%, due mostly to the company's development of the Basin and Marcellus Shale resource plays. However, average realized prices for crude oil and condensates fell 29%, while prices increased about 2.4% for natural gas. Shares of Noble, which were inactive premarket, have risen about 7% this year through Wednesday's close. Credit: By Angela Chen
Subject: Petroleum industry; Prices; Energy industry
Location: United States--US Africa Israel Gulf of Mexico Equatorial Guinea
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656049933
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
OMV Becomes Latest Oil-And-Gas Company to Post a Loss; Operational security concerns in Libya, Yemen hurts production
Author: Lundeen, Nicole
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
OMV followed other large European oil companies like Total SA of France and Italy's Eni SpA , recording a 2014 fourth-quarter net loss of [euro]308 million ($350.
Full text: VIENNA--OMV AG on Thursday became the latest oil-and-gas company to post a net loss after the crude-price collapse, while pressing operational security issues in Libya and Yemen adversely affected production. The midsize European oil producer, that is a standard-bearer in Austria, has sizable operations in Libya but the descent into lawlessness and civil war has roiled the petroleum industry. Jaap Huijskes, head of exploration and production, said OMV has stopped producing oil in the country and its office in Tripoli is effectively closed, with only local staff working from home. The last of OMV's expatriate workers left in the autumn. For the entire year, OMV's production in Libya was only at 25% of capacity. If it were able to operate at full capacity in 2015, production would be around 43,000 barrels of oil equivalent a day. "The [2014] production in Libya was not a highlight, [but] a lowlight," Mr. Huijskes told reporters at a news conference on fourth-quarter earnings. Mr. Huijskes said the company continued to produce oil in Yemen, where a rebel group has effectively taken over the government. "But of course, Yemen at the moment is a very difficult environment," he said. OMV's original goal was to increase total production to 400,000 barrels of oil equivalent a day by 2016. That still remains the company's target, but it will miss its 2016 deadline. "When exactly we reach the goal. depends on oil price developments," Mr. Huijskes said, adding that it also depends on production in Libya and Yemen. OMV followed other large European oil companies like Total SA of France and Italy's Eni SpA , recording a 2014 fourth-quarter net loss of [euro]308 million ($350. 7 million) from a [euro]78 million net loss on year. OMV's fourth-quarter clean current cost of supply net profit--net profit adjusted for changes in stock levels and a key figure for commodity companies--notched [euro]348 million, up from [euro]178 million in the fourth-quarter of 2013. For the year as a whole, OMV posted a net profit of [euro]357 million, down 69% from [euro]1.16 billion in 2013. Chief Executive Gerhard Roiss blamed much of the loss on oil prices that have tumbled from more than $110 a barrel for Brent crude, the global benchmark, last summer to less than $50 a barrel in January. Brent was trading about $59 a barrel in Londonon Thursday afternoon . Mr. Roiss said the company expected low oil prices to continue over the medium term and would restructure by cutting costs and divesting noncore assets. It has also set capital expenditure at a total of between [euro]2.5 billion and [euro]2.8 billion in 2015. Last month, OMV cut its investment plan over the next three years from its original plan to invest [euro]3.9 billion a year. "Our assumption is an oil price between $50-$60 a barrel. If it's higher, we'll be happy," Mr. Roiss said. OMV's management provided few details about planned divestments and which investments would be delayed, saying things were under review. Mr. Huijskes said some of the cuts would come from Austria and Romania, resulting in a likely cut in production in the two countries. The fields in both countries are relatively old and OMV's goal has been to stabilize production. In addition, OMV's gas portfolio is under review, with more information to be made available later this year. OMV's downstream division, combining gas and power, refining and marketing, will also be looking to divest from noncore assets, the division's head Manfred Leitner said. One bright spot was that new assets in Norway allowed OMV to increase production 8% in 2014 to an average of 309,000 barrels of oil equivalent a day. OMV's management will propose a dividend of $1.25 for 2014, unchanged from 2013. OMV's largest shareholder is the Austrian government through its holding company the Oesterreichische Industrieholding AG with 31.5% of the shares. OeIAG has a shareholder agreement with OMV's second-largest shareholder, Abu Dhabi's IPIC, which holds 24.9% of OMV's shares. Write to Nicole Lundeen at nicole.lundeen@wsj.com Credit: By Nicole Lundeen
Subject: Net losses; Petroleum industry; Financial performance; Corporate profits; Crude oil prices
Location: Libya Yemen Austria
Company / organization: Name: Eni SpA; NAICS: 324110, 211111; Name: Total SA; NAICS: 447190, 324110, 211111; Name: OMV AG; NAICS: 324110
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Bus iness
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656085105
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656085105?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Big Investors Exit Petrobras as Corruption Scandal Drags On; Soros, BlackRock and Fidelity Management cut their stakes in the Brazilian oil company
Author: Jelmayer, Rogerio
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract: None available.
Full text: SÃO PAULO--Some big international investors have been selling shares in Brazil's state-run oil company Petróleo Brasileiro SA, or Petrobras, as the company faces the biggest crisis of its history amid corruption allegations. Investors including Soros Fund Management LLC, which invests for billionaire investor George Soros and his family; BlackRock Fund Advisors; and Fidelity Management Research Co., cut their stakes in the Brazilian company in the fourth quarter, when the corruption scandal gained force. "Big international investors prefer to stay away from Petrobras because the uncertainty surrounding the company is huge. So they've opted to take a conservative path until they see a clearer scenario for the company," said João Pedro Brugger, a portfolio manager at Leme Investimentos, based in Florianopolis. Mr. Brugger said his company owns shares in Petrobras as part of a portfolio matching Brazil's Ibovespa stocks index. Soros slashed its stake in Petrobras by 60% to 2 million of the company's American depositary receipts at the end of the fourth quarter, versus the third quarter of 2014, according to a filing posted on the Securities and Exchange Commission's website. BlackRock Fund Advisors, meanwhile, sold 8.28 million shares in the oil company last quarter, according to FactSet, leaving it with 89.2 million shares at the end of 2014. Fidelity Management cut its stake by 690,100 shares to 5.9 million shares, according to FactSet. The firms didn't respond to interview requests regarding their respective strategies. Since early September, when damaging news reports about the scandal started to come more frequently, the company's ADRs lost nearly 70% of their value and its market capitalization shrank by nearly $80 billion. Even with the sharp drop in the share price in the past few months, now isn't the time to go bargain hunting, according to analysts. "No investors are looking at Petrobras for the medium and long term, even though the shares have fallen a lot. It's not a buying opportunity because the company still has a lot of doubts to clear up--they haven't even released an audited balance yet," said Alvaro Bandeira, a director at the Órama Investimentos fund brokerage in Rio de Janeiro. Earlier this month, Petrobras named Aldemir Bendine --the former head of state-controlled lender Banco do Brasil--as its new boss after former Chief Executive Maria das Graças Silva Foster and five other top executives resigned amid the investigation into allegations of kickbacks and payments to company officials and politicians. None of the departing executives have been implicated in the alleged scandal. Petrobras in January published its long-awaited third-quarter results, but the numbers were unaudited and the company failed to provide a figure for potential write-downs that might be generated by the probe. The company, which twice postponed the release of its third-quarter results, said it is still working to assess the financial damage from the alleged corruption, and is also still evaluating alternatives to measure the potential size of any write-downs. Meanwhile, the company said it would cut investment and sell assets because of the fall in oil prices and its huge debt. Some investors have nevertheless adopted a neutral position and are keeping their stakes in Petrobras for the time being. Longtime emerging markets investor Mark Mobius, the executive chairman of Templeton Emerging Markets Group, has said he remains committed to Latin America's largest economy despite its current struggles with slow growth and high inflation. Templeton has about $1.6 billion invested in Brazil, and Mr. Mobius said recently at a news conference that although he was "surprised and blindsided" by the apparent extent of the alleged corruption at Petrobras, the fund will maintain its approximately $100 million investment in the company. Write to Rogerio Jelmayer at rogerio.jelmayer@wsj.com Credit: By Rogerio Jelmayer
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656088377
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656088377?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil-Drop Pain Spreads to Saudi Arabia's Energy Behemoth; Aramco looks for cut costs, asking oil-services providers for deals; pushing for a phone-bill discount
Author: Said, Summer; Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract: None available.
Full text: Saudi Arabia's refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom's own oil company is feeling the pain. As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter. The company--the world's largest oil producer--is also considering slashing its future spending on production and exploration by as much as 25%, much like private oil companies, industry sources said. "Like everyone else, we're using the downturn as an opportunity to sharpen our fiscal discipline," Aramco CEO Khalid Al Falih said in public remarks during the World Economic Forum in Davos in January. "We're cutting on a few things that we could cut, but we're as committed as ever to our long-term strategy." The measures demonstrate some of the risks the Organization of the Petroleum Exporting Countries took when it decided in November to forsake its traditional role of cutting production to boost prices. The Saudi-backed decision has hurt big, publicly listed companies, such as Royal Dutch Shell PLC and Chevron Corp., but is now ricocheting and hitting national oil companies. Not only is revenue to state treasuries falling, but OPEC nation oil companies--like their private counterparts--are making cuts that may make it difficult for them to capitalize when prices begin to rise. The measures are a departure for Aramco, which had boosted its spending on pumping oil and launched its first efforts at deep-sea production when crude was regularly trading at more than $100 a barrel from 2011 to 2014. The price of Brent crude, the world benchmark, has nearly halved since June, trading around $60 a barrel in London on Thursday. To be sure, the retrenchment is small scale for Aramco and Gulf oil producers--whose production costs are much lower than for most international rivals--and executives say it won't threaten output levels in big fields in Saudi Arabia, Kuwait or the United Arab Emirates. The cuts don't appear to be as deep as those after the mid-1980s price crash, when Aramco and others laid off thousands of workers and cut back production to historically low levels. Government companies like Aramco and others in the Gulf hold monopolies on the production of their huge crude reserves and don't have to produce public accountings of their business, so it is difficult to know precisely what they plan to spend and cut or whether they are losing money. But oil prices have produced a new cost-consciousness across the Persian Gulf's state-owned companies. In December, Aramco was advised by the Saudi government to cut costs, one Saudi official said. Aramco, which usually bases its investment on oil supply and demand, is trying to execute some projects at lower costs, while deferring others until the picture of the oil market is clearer, the official said. Aramco executives are considering slashing production and exploration spending to $30 billion a year from $40 billion while oil prices remain low, according to industry sources. Aramco has joined oil companies, big and small, in pushing aggressively for discounts from its contractors, seeking rebates from telecommunications providers and power suppliers, for example, according to executives. In December, the Saudi oil company summoned oil-services companies including Baker Hughes Inc., Halliburton Co. and Schlumberger Ltd. to its offices in the northeastern city of Al Khobar to ask for discounts of up to 20% on certain services, for instance, well-testing procedures, according to people familiar with the matter. The companies do about $6 billion a year in business with Aramco combined, according to people familiar with the matter. Baker Hughes offered a small discount, but Aramco has held out for 20%, according to people familiar with the matter. The two parties are still in talks to find a common ground, but no contracts have been canceled, they said. Halliburton, Baker Hughes and Schlumberger declined to comment. In an earnings conference call last month, Baker Hughes Chief Executive Martin Craighead said the company was in discussions with "bigger companies with pretty sophisticated procurement groups" to reduce prices. In an earnings conference call at Schlumberger, CEO Paal Kibsgaard said he expected a reduction in spending in the Middle East. Also in a conference call, Halliburton Chairman Dave Lesar said he anticipated "headwinds" in the Middle East, though he expected his company to be more resilient than most, notably because of recent contracts in Saudi Arabia. Aramco has pushed back by a year plans to build a $2 billion clean-fuels plant and put on hold deep-water oil and gas exploration and drilling activities in the Red Sea because their profitability is now in question, said people familiar with the matter. Geologists have estimated that Saudi territory in the Red Sea could hold the equivalent of more than a third of the Kingdom's known oil-and-gas reserves, but these reservoirs are also much more expensive to develop than onshore. Deep-water projects world-wide typically need $53 a barrel to break even, according to Norwegian energy consultancy Rystad Energy. Aramco isn't the only big state oil company seeking to cut costs. Suhail bin Mohammed al-Mazroui, the oil minister of the United Arab Emirates, said in January that his country, along with other producers, would squeeze oil contractors' costs to adapt to lower oil prices. "We will need the service companies and contractors to understand the cycle [of the oil market]," he said at an energy event in Dubai. Qatar Petroleum said earlier this year it has shelved a petrochemicals project in the Gulf emirate with partner Shell. In Oman, a Gulf country with moderate oil reserves and production that isn't an OPEC member, state company Petroleum Development of Oman postponed in December the award of a $1 billion contract to supply and manage oil-production pumps for seven years, according to people familiar with the matter. The government informed bidders they will have to wait for a year to see how oil prices are evolving before committing to major projects, one Omani official said. While Aramco is beginning to feel some pain, OPEC doesn't appear likely to change its strategy of maintaining production before its next meeting in June. The cartel has put a premium on maintaining its customer base, and Saudi Arabia has made tactical price cuts. This week, PIRA Energy Group, a New York research firm, said Saudi Arabian production was pumping more crude than usual, as much as 10 million barrels a day--close to Aramco's estimated capacity. Sarah Kent contributed to this article. Write to Summer Said at summer.said@wsj.com and Benoit Faucon at benoit.faucon@wsj.com Credit: By Summer Said and Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656160742
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656160742?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
West Virginia Oil Train That Derailed Was Traveling Under Speed Limit; CSX Corp. train that exploded was going 33 mph in a 50 mph zone; derailment cause still under investigation
Author: Maher, Kris
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]19 Feb 2015: n/a.
Abstract:
The plaintiffs, who are seeking class-action status, allege that they suffered economic damages and inconvenience as a result of the water interruption, the evacuations and lost business.
Full text: The crude-oil train that derailed and exploded in West Virginia on Monday was traveling well below the track's speed limit, according to an onboard recording system, a federal official said Thursday. Sarah Feinberg, acting head of the Federal Railroad Administration, said the CSX Corp. train that derailed near Mount Carbon, W.Va., was going 33 miles an hour in a 50 mph zone. The cause of the derailment remains under investigation, and Ms. Feinberg said investigators would look at the condition of the rails, tanker car wheels and other factors that could have contributed to the accident. Investigators have so far examined outward-facing video footage from the train, as well as information from a data-recording device on the locomotive. "The data we're able to glean from it is incredibly useful, but we're very early in the investigation," said Ms. Feinberg. "The reality is we really need to make some progress at the scene. We've still got some fires burning." The train was hauling 107 tank cars of crude oil from North Dakota to Yorktown, Va., when 26 cars derailed, with 19 eventually catching fire and several exploding and sending fireballs into the sky. One nearby home burned to the ground, and one person was treated for possible respiratory problems before being released. Fires at the site, along a creek that flows beside the Kanawha River about 30 miles from the state capital of Charleston, have kept investigators from examining the scene thoroughly. One fire continued to smolder Thursday, said Gary Sease, a spokesman for CSX. Yet Mr. Sease said company crews on Thursday were finally able to begin to move closer to pump off the remaining oil from the damaged cars. That oil will be removed via trucks to a temporary storage site before being disposed of, he said. Each tanker car carried 29,500 gallons of oil. But it isn't yet clear how much leaked from the ruptured cars. "The closer work today as part of the oil-transfer process will enable us to make an estimate of the lost product," Mr. Sease said. Mr. Sease said the company couldn't say yet when the track would reopen. On Wednesday, two restaurants filed a lawsuit in Fayette County court against CSX and West Virginia American Water, which shut a water system for 2,000 customers as a precaution after the derailment. The plaintiffs, who are seeking class-action status, allege that they suffered economic damages and inconvenience as a result of the water interruption, the evacuations and lost business. "It was a major disruption for thousands of people," said Tim Bailey, an attorney for the plaintiffs. Laura Jordan, a spokeswoman for West Virginia American Water, said the company was aware of the lawsuit but hasn't yet been able to analyze the allegations. She said the company responded quickly to the incident. Mr. Sease didn't immediately respond to a request for comment on the lawsuit. Write to Kris Maher at kris.maher@wsj.com Credit: By Kris Maher
Subject: Investigations
Location: West Virginia
Company / organization: Name: West Virginia-American Water Co; NAICS: 221310
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 19, 2015
Section: US
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656167692
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656167692?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
U.S. News: Oil Train Was Traveling Below Track Speed Limit
Author: Maher, Kris
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Feb 2015: A.2.
Abstract:
Sarah Feinberg, acting head of the Federal Railroad Administration, said the CSX Corp. train that derailed near Mount Carbon, W. Va., was going 33 miles per hour in a 50-mph zone.
Full text: The crude-oil train that derailed and exploded in West Virginia on Monday was traveling well below the track's speed limit, according to an onboard recording system, a federal official said Thursday. Sarah Feinberg, acting head of the Federal Railroad Administration, said the CSX Corp. train that derailed near Mount Carbon, W. Va., was going 33 miles per hour in a 50-mph zone. The cause of the derailment remains under investigation, and Ms. Feinberg said investigators would look at the condition of the rails, tanker-car wheels and other factors that could have contributed to the accident. Investigators have so far examined outward-facing video footage from the train, as well as information from a data-recording device on the locomotive. "The data we're able to glean from it is incredibly useful, but we're very early in the investigation," she said. "The reality is we really need to make some progress at the scene. We've still got some fires burning." The train was hauling 107 tank cars of crude oil from North Dakota to Yorktown, Va., when 26 cars derailed, with 19 eventually catching fire and several exploding and sending fireballs into the sky. One nearby home burned to the ground, and one person was treated for possible respiratory problems before being released. Fires at the site, along a creek that flows beside the Kanawha River about 30 miles from the state capital of Charleston, have kept investigators from examining the scene thoroughly. One fire continued to smolder Thursday, said Gary Sease, a spokesman for CSX. Yet Mr. Sease said company crews on Thursday were finally able to begin to move closer to pump off the remaining oil from the damaged cars. That oil will be removed via trucks to a temporary storage site before being disposed of, he said. Credit: By Kris Maher
Subject: Accident investigations; Oil spills; Railroad accidents & safety
Location: West Virginia
Company / organization: Name: CSX Corp; NAICS: 482111
Classification: 9190: United States; 8350: Transportation & travel industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: A.2
Publication year: 2015
Publication date: Feb 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656249859
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656249859?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Delhi Police Arrest Seven for Allegedly Stealing Documents; The police action followed complaints by India's oil ministry that official documents were being stolen
Author: Roy, Rajesh
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
"Investigations further revealed that the stolen documents were being sold to some individual of private energy consultancy companies as well as to those in the petrochemical, energy industry," the police statement said.
Full text: NEW DELHI--Indian police arrested seven people on charges of allegedly stealing official documents from the petroleum ministry and selling them to energy companies and consultants. In a statement late Thursday, the Delhi police said it found classified documents in the possession of these people who were allegedly trespassing the office of the Ministry of Petroleum and Natural Gas. "Investigations further revealed that the stolen documents were being sold to some individual of private energy consultancy companies as well as to those in the petrochemical, energy industry," the police statement said. Police said the seven arrested included two former and two current staff working in Shastri Bhawan, the building in central Delhi that houses several government departments including the petroleum ministry. It didn't elaborate the departments for which they were working. All have yet to be formally charged. It isn't immediately clear if the persons have appointed lawyers to represent them. Local media reported that the Delhi police has also questioned two executives of Reliance Industries and Essar Group in connection with the case. Police didn't confirm. A Reliance Industries official said the company is cooperating in the investigation and has nothing to hide. Essar Group officials weren't immediately available for comment. The police action followed complaints by the oil ministry that official documents were being stolen. "We had suspicion that such leaks were happening so we had alerted the agencies," Oil Minister Dharmendra Pradhan said in an interview with NDTV news channel. "The culprits won't be spared." Ever since assuming office in May last year, Prime Minister Narendra Modi's government has moved to check leakage of classified information from government departments. Closed circuit cameras and televisions have been installed in most ministries as a precautionary measure. Write to Rajesh Roy at rajesh.roy@wsj.com Credit: By Rajesh Roy
Subject: Petroleum industry; Energy industry; Classified information
People: Modi, Narendra
Company / organization: Name: Essar Group; NAICS: 551112
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656260645
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Traders Are In Search Of Bottom For Oil
Author: Friedman, Nicole
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Feb 2015: C.1.
Abstract:
"The big question is, when do those refineries come back?" said Michael Cohen, analyst at Barclays PLC. If global demand for fuels doesn't pick up, he said, "you're processing all those barrels and sending out the products into a world that doesn't need it."
Full text: New evidence of surging U.S. oil supplies sent prices on a roller-coaster ride Thursday, reflecting the growing divide among traders over whether an eight-month rout is over. The U.S. Energy Information Administration said oil inventories grew by 7.7 million barrels in the week that ended Feb. 13. Analysts said swelling stockpiles are a sign producers aren't cutting back on output, despite a more-than-50% collapse in prices since last summer. In its report, the EIA said U.S. oil production was on track to reach a 42-year high this month. But traders in the futures market had been bracing for much worse, and many took the data as a cue to buy. On Wednesday, an industry group had estimated a jump of 14.3 million barrels for last week, which would have been a record had it been borne out in the government data. Although both reports depend on surveys of industry participants, the EIA survey is mandatory for companies to complete. U.S. oil futures, at one point down more than 5%, ended the day off 98 cents, or 1.9% at $51.16 a barrel on the New York Mercantile Exchange. Brent, the international benchmark, briefly turned positive before settling down 0.5%, at $60.21 a barrel, on the ICE Futures Europe exchange. The weekly U.S. supply data is shaping a debate within the oil market about whether prices have hit bottom. Prices rallied this month, reaching a high for the year on Tuesday, buoyed in part by reports that U.S. producers were cutting back on drilling. But many investors and analysts still harbor doubts about whether prices are low enough to curb production or spur new demand, two ingredients needed for a rebound. The uncertainty has triggered huge daily price moves in both directions this year. "I think there's a bit of a fight going on" between bearish investors concerned about high supplies today and bulls who expect low prices to lead to production cuts, said Bart Melek, head of commodities strategy at TD Securities. "The market is a little bit overoptimistic. . . . There's an awful lot of crude still coming into inventory." U.S. crude inventories are at their highest on record, according to weekly data going back to August 1982. Monthly data, which don't exactly line up with weekly data, show stockpiles last exceeded this level in 1930. The oversupply is being worsened by a seasonal slump in demand, which typically falls in February and March as refiners shut units for seasonal maintenance. Analysts expect supplies to continue to build in the coming weeks. Refineries operated at 88.7% of capacity last week, down 1.3 percentage points from the prior week. "The big question is, when do those refineries come back?" said Michael Cohen, analyst at Barclays PLC. If global demand for fuels doesn't pick up, he said, "you're processing all those barrels and sending out the products into a world that doesn't need it." Traders are closely watching inventory levels in Cushing, Okla., the delivery point for the Nymex contract. Cushing supplies rose by 3.7 million barrels last week to 46.3 million barrels, the highest level since July 2013. In the past, when Cushing supplies have risen, the U.S. benchmark oil price has fallen relative to global prices. U.S. oil futures settled Thursday about $9 a barrel below Brent, from near parity a month ago. The large nationwide storage buildup "pretty much stopped [the rally] in its tracks," said Ric Navy, senior vice president for energy futures at brokerage R.J. O'Brien & Associates LLC. "Supply still outweighs demand overall." While still-growing oil inventories are pushing prices lower, some investors saw bullish signs for fuels. Supplies of distillate, a class of fuels that includes diesel and heating oil, fell by more than expected in Thursday's data. Some see frigid temperatures in the eastern U.S. boosting demand for those products to heat homes and fuel power plants. Diesel futures rose 1.8% to $1.9938 a gallon on the Nymex. Gasoline futures rose 2.7% to $1.6162 a gallon. The weekly count of rigs drilling for oil in the U.S. has dropped in recent weeks to the lowest total since August 2011, and a number of oil companies have lowered their spending plans for this year. "The shale wells tend to deplete very fast," said Scott Kubie, chief investment strategist at CLS Investments LLC, which manages about $7 billion. In January, Mr. Kubie's fund added to its investments in exchange-traded funds that track the stock prices of oil producers. --- Georgi Kantchev contributed to this article.
Credit: By Nicole Friedman
Subject: Commodity prices; Crude oil
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.1
Publication year: 2015
Publication date: Feb 20, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656261089
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Aramco, Too, Feels the Pain Of Collapse In Oil Prices
Author: Said, Summer; Faucon, Benoit
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Feb 2015: B.1.
Abstract:
[...]state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter.
Full text: Saudi Arabia's refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom's own oil company is feeling the pain. As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter. The company -- the world's largest oil producer -- is also considering slashing its future spending on production and exploration by as much as 25%, much like private oil companies, industry sources said. "Like everyone else, we're using the downturn as an opportunity to sharpen our fiscal discipline," Aramco CEO Khalid Al Falih said in public remarks during the World Economic Forum in Davos in January. "We're cutting on a few things that we could cut, but we're as committed as ever to our long-term strategy." The measures demonstrate some of the risks the Organization of the Petroleum Exporting Countries took when it decided in November to forsake its traditional role of cutting production to boost prices. The Saudi-backed decision has hurt big, publicly listed companies, such as Royal Dutch Shell PLC and Chevron Corp., but is now ricocheting and hitting national oil companies. Not only is revenue to state treasuries falling, but OPEC nation oil companies -- like their private counterparts -- are making cuts that may make it difficult for them to capitalize when prices begin to rise. The measures are a departure for Aramco, which had boosted its spending on pumping oil and launched its first efforts at deep-sea production when crude was regularly trading at more than $100 a barrel from 2011 to 2014. The price of Brent crude, the world benchmark, has nearly halved since June, trading around $60 a barrel in London on Thursday. To be sure, the retrenchment is small scale for Aramco and Gulf oil producers -- whose production costs are much lower than for most international rivals -- and executives say it won't threaten output levels in big fields in Saudi Arabia, Kuwait or the United Arab Emirates. The cuts don't appear to be as deep as those after the mid-1980s price crash, when Aramco and others laid off thousands of workers and cut back production to historically low levels. Government companies like Aramco and others in the Gulf hold monopolies on the production of their huge crude reserves and don't have to produce public accountings of their business, so it is difficult to know precisely what they plan to spend and cut or whether they are losing money. But oil prices have produced a new cost-consciousness across the Persian Gulf's state-owned companies. In December, Aramco was advised by the Saudi government to cut costs, one Saudi official said. Aramco, which usually bases its investment on oil supply and demand, is trying to execute some projects at lower costs, while deferring others until the picture of the oil market is clearer, the official said. Aramco executives are considering slashing production and exploration spending to $30 billion a year from $40 billion while oil prices remain low, according to industry sources. Aramco has joined oil companies, big and small, in pushing aggressively for discounts from its contractors, seeking rebates from telecommunications providers and power suppliers, for example, according to executives. In December, the Saudi oil company summoned oil-services companies including Baker Hughes Inc., Halliburton Co. and Schlumberger Ltd. to its offices in the northeastern city of Al Khobar to ask for discounts of up to 20% on certain services, for instance, well-testing procedures, according to people familiar with the matter. The companies do about $6 billion a year in business with Aramco combined, according to people familiar with the matter. Baker Hughes offered a small discount, but Aramco has held out for 20%, according to people familiar with the matter. The two parties are still in talks to find a common ground, but no contracts have been canceled, they said. Halliburton, Baker Hughes and Schlumberger declined to comment. In an earnings conference call last month, Baker Hughes Chief Executive Martin Craighead said the company was in discussions with "bigger companies with pretty sophisticated procurement groups" to reduce prices. In an earnings conference call at Schlumberger, CEO Paal Kibsgaard said he expected a reduction in spending in the Middle East. Also in a conference call, Halliburton Chairman Dave Lesar said he anticipated "headwinds" in the Middle East, though he expected his company to be more resilient than most, notably because of recent contracts in Saudi Arabia. Aramco has pushed back by a year plans to build a $2 billion clean-fuels plant and put on hold deep-water oil and gas exploration and drilling activities in the Red Sea because their profitability is now in question, said people familiar with the matter. Geologists have estimated that Saudi territory in the Red Sea could hold the equivalent of more than a third of the Kingdom's known oil-and-gas reserves, but these reservoirs are also much more expensive to develop than onshore. Deep-water projects world-wide typically need $53 a barrel to break even, according to Norwegian energy consultancy Rystad Energy. Aramco isn't the only big state oil company seeking to cut costs. Suhail bin Mohammed al-Mazroui, the oil minister of the United Arab Emirates, said in January that his country, along with other producers, would squeeze oil contractors' costs to adapt to lower oil prices. "We will need the service companies and contractors to understand the cycle [of the oil market]," he said at an energy event in Dubai. Qatar Petroleum said earlier this year it has shelved a petrochemicals project in the Gulf emirate with partner Shell. In Oman, a Gulf country with moderate oil reserves and production that isn't an OPEC member, state company Petroleum Development of Oman postponed in December the award of a $1 billion contract to supply and manage oil-production pumps for seven years, according to people familiar with the matter. The government informed bidders they will have to wait for a year to see how oil prices are evolving before committing to major projects, one Omani official said. While Aramco is beginning to feel some pain, OPEC doesn't appear likely to change its strategy of maintaining production before its next meeting in June. The cartel has put a premium on maintaining its customer base, and Saudi Arabia has made tactical price cuts. This week, PIRA Energy Group, a New York research firm, said Saudi Arabian production was pumping more crude than usual, as much as 10 million barrels a day -- close to Aramco's estimated capacity. --- Sarah Kent contributed to this article. Credit: By Summer Said and Benoit Faucon
Subject: Petroleum industry; Cost reduction; Petroleum production; Crude oil prices
Location: Saudi Arabia
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249; Name: World Economic Forum; NAICS: 926110; Name: Saudi Arabian Oil Co; NAICS: 211111
Classification: 9180: International; 3400: Investment analysis & personal finance; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.1
Publication year: 2015
Publication date: Feb 20, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656261112
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656261112?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Blue Chips Slip; Tech Lifts Nasdaq --- Drop in oil price hits Dow industrials; Greece worries also take a toll on U.S. stock markets
Author: Strumpf, Dan
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]20 Feb 2015: C.4.
Abstract:
Priceline Group shares climbed 95.06, or 8.5%, to 1,218.05 after posting a better-than-expected 19% increase in revenue in the quarter ended December, though it said bookings are expected to slow and foreign-currency effects will weigh on future performance.
Full text: The Dow industrials and S&P 500 edged lower in quiet trading as energy shares slipped, but technology stocks continued their recent winning ways. The Dow Jones Industrial Average fell 44.08, or 0.2%, to 17985.77. The S&P 500 index lost 2.23, or 0.1%, to 2097.45. But the tech-heavy Nasdaq Composite continued its monthslong trend higher, rising 18.34, or 0.4%, to 4924.70. With Thursday's gain, the Nasdaq has risen for seven sessions in a row. The index is on its longest winning streak since last February, when it climbed for eight consecutive trading days. Over the past seven trading days, the Nasdaq has gained 4.2%. Within the S&P 500, technology stocks were the best-performing group, rising 0.4%. Overseas early Friday, Japan's Nikkei was up 0.3%, while Australia's S&PASX 200 was down 0.4%. Markets in most of Asia were closed for the Lunar New Year holiday. In the U.S., Thursday supplanted Wednesday as the second-slowest full-day trading session of 2015, with 5.9 billion shares changing hands. The slowest day of the year was Jan. 2. Much of the focus for investors was on events in Europe after Germany rebuffed a request by Greece to extend its bailout, set to expire at the end of this month. Greece and its creditors have been in negotiations for weeks over the broad terms of new financing for the country, though most investors expect a deal will emerge that keeps Greece in the eurozone. "Everyone is sitting here waiting to figure out what happens with Greece," said Jesse Lubarsky, equity trader at Raymond James in New York. Energy stocks slipped as oil prices extended their recent slide. Crude-oil futures have fallen 4.4% the last two sessions, settling Thursday at $51.16 a barrel. Oil prices have tumbled by more than half since the middle of last year but are up from their most recent lows. Oil hit a low of $44.45 on Jan. 28. The S&P 500 energy index fell 0.8%. In the Dow, Chevron fell $2.09, or 1.9%, to $108.35. Exxon Mobil shares lost 1.57, or 1.7%, to 89.44. Although talks over the Greek bailout and the potential for a rebound in oil prices have captured investor attention in recent weeks, many investors say a notable calm has settled over the stock market. The Dow closed up or down by 1% or more during 10 sessions in January. But so far this month, it has done so only three times. While price swings have narrowed, the market has resumed its grind toward record levels. The Dow is just 0.4% below its record of 18053.71 and the S&P 500 is 0.1% away from Tuesday's closing record of 2100.34. The Russell 2000 index of small-company stocks snapped a four-day winning streak as it closed a hair below its most recent record set Wednesday, finishing down 0.04 points at 1227.91 Fourth-quarter earnings reports continued to trickle in Thursday. Shares of Dow component Wal-Mart Stores fell 2.77, or 3.2%, to 83.52 after the retailer reported higher earnings of $4.97 billion but an increase in revenue that fell short of analyst projections, and a plan to raise employee pay. Shares of T-Mobile US gained 85 cents, or 2.7%, to 31.85 after the country's fourth-largest wireless carrier said it swung to a quarterly profit as revenue surged. Priceline Group shares climbed 95.06, or 8.5%, to 1,218.05 after posting a better-than-expected 19% increase in revenue in the quarter ended December, though it said bookings are expected to slow and foreign-currency effects will weigh on future performance. European stocks recovered from early losses, with Germany's DAX settling 0.4% higher at a record. The Stoxx Europe 600 index gained 0.3%. --- Saumya Vaishampayan contributed to this article. Credit: By Dan Strumpf
Subject: Dow Jones averages; Stock prices; Daily markets (wsj)
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: C.4
Publication year: 2015
Publication date: Feb 20, 2015
column: Thursday's Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656261552
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656261552?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Oil Retreats on U.S. Supply Highs; U.S. rig count drops, but concerns about oversupply persist
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
[...]you see it slowing down, there's always going to be this downward pressure on the market."
Full text: Oil prices fell for a third-straight session as slowing rig count cuts added to losses that had been mounting because of historically high U.S. supplies. The U.S. Energy Information Administration reported on Thursday that U.S. crude inventories reached another record last week, a sign that cheap prices haven't begun to affect production yet. The rising supplies led to the oil market's first weekly loss in nearly a month. Rig counts kept falling in new data released Friday, but the 37-rig decline was less than half of that registered a week ago. That could be a bearish sign that production won't fall to balance the market as quickly as some had hoped. The day's losses mounted on the news. Light, sweet crude for March delivery, the U.S. benchmark, settled down 82 cents, or 1.6%, to $50.34 a barrel on The New York Mercantile Exchange. The March contract expired at the end of Friday's trading. The more actively traded April contract settled down $1.02 cents, or 2%, at $50.81 a barrel. The front-month April contract for Brent crude settled up 1 cent, or 0.02%, at $60.22 a barrel on London's ICE Futures exchange. Dean Hazelcorn, trader at Coquest Inc. in Dallas, said he was surprised prices didn't move more on the news. Randall Collum, an analyst at Genscape Inc., had said earlier in the day that the rig-count cuts tallied by Baker Hughes Inc. likely would slow in the weeks to come. "I have to think it met exactly expectations," Mr. Hazelcorn said. The market "has been so docile." Expiration likely sapped some of the volatility, he added. Others said growing stocks were still pushing a selloff. The EIA said oil inventories grew by 7.7 million barrels last week to 426 million barrels, the highest level for this time of year for at least 80 years. "It's just crazy, these numbers and how it just keeps coming," said Peter Donovan, broker for Liquidity Energy in New York. "Until you see it slowing down, there's always going to be this downward pressure on the market." Oil futures had received a boost from petroleum products, which are surging in part because of weather in the U.S., brokers said. Cold weather boosts demand for heating fuel like diesel, and subzero and subfreezing temperatures are going to be common for most of the country through next week, meteorologists said. Two East Coast refiners are also having problems Friday, including frozen equipment that has kept ships from unloading at Delta's Trainer refinery, Reuters reported Friday. March diesel skyrocketed to a two-month high, settling up 11.8 cents, or 6%, at $2.1118 a gallon. Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 1.5% to $1.6407 a gallon. Mr. Collum and others warned that it could be months before the market reduces its oversupply, which analysts estimate at about 2 million barrels a day. The EIA reported on Thursday that U.S. crude production was running at a multiyear high of 9.3 million barrels a day. Other major producers also appear to be ramping up output. Saudi Arabia could be producing as much as 10 million barrels of oil a day, PIRA Energy Group said in a report this week. The Kingdom's output has kept steady in recent months at about 9.7 million barrels a day, according to Organization of the Petroleum Exporting Countries data. Saudi-led OPEC decided not to cut output last year despite the price rout in an apparent attempt to defend its market share against the booming U.S. shale industry. On Friday, financial markets were focused on the impasse between Greece and its creditors over a new financing deal for the country. Eurozone finance ministers are due to meet later Friday to hammer out a deal to avert a potential Greek exit from the eurozone, a prospect that has rattled markets in recent weeks . Tepid oil demand from Europe's struggling economies contributed to the oil price crash last year. Georgi Kantchev Nicole Friedman and Tommy Stubbington contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Crude oil; Supply & demand; Prices; Inventory
Location: United States--US
Company / organization: Name: Genscape Inc; NAICS: 511140, 518210; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656263207
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656263207?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Ivanhoe Energy Files For Bankruptcy Protection; Oil exploration company remains in talks with stakeholders to recapitalize
Author: McKinnon, Judy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
The Vancouver company, which has struggled to make interest payments on its debts and recently received a $2.37 million bridge loan from Mr. Friedland, said its board determined the move would be in the best interest of the company given its current financial situation.
Full text: Ivanhoe Energy Inc., the oil exploration company founded by mining magnate Robert Friedland, said on Friday it would file for bankruptcy protection in Canada as it continues to pursue restructuring options. The Vancouver company, which has struggled to make interest payments on its debts and recently received a $2.37 million bridge loan from Mr. Friedland, said its board determined the move would be in the best interest of the company given its current financial situation. Ivanhoe has been hit hard by slumping energy prices. Even before oil started its sharp slide last year, Ivanhoe suspended its Tamarack oil-sands project in Alberta, citing regulatory hurdles. It lost two chief financial officers last year, the first resigning in May, followed by a second months later. Last month, Ivanhoe said it would scale back operations in Ecuador as a result of oil's slump and stalled talks with a partner on development plans for a heavy-oil project in that country. Ivanhoe on Friday said it would continue to pursue strategic alternatives while under protection from its creditors, including debt restructuring options and the sale of assets. It said it remains in talks with "various stakeholders" to recapitalize the company. The company said if it fails to reach its financing and restructuring target, it would become bankrupt. Its stock fell 39% to 42 cents at 4p.m. Nasdaq trading on Friday. The Toronto Stock Exchange said the stock is under revenue for delisting. Ernst & Young Inc. has been named as trustee under the bankruptcy protection filing, the company said. Ivanhoe, whose largest shareholder as of October 2014 is Mr. Friedland, has operations in Canada, the U.S. and Ecuador. Earlier this month, Mr. Friedland provided a bridge loan to the company, which it said it would use to satisfy its current obligations. In October 2014, he provided a $2.2 million secured bridge loan. Ivanhoe missed an interest payment of around $1.8 million due on a convertible debenture on Dec. 31 and in late January announced it didn't expect to pay that charge by the end of January. Earlier this week, it received a default notice for missing the payment. Write to Judy McKinnon at judy.mckinnon@wsj.com Credit: By Judy McKinnon
Subject: Bankruptcy; Debt restructuring; Bankruptcy reorganization
Location: Canada Ecuador
Company / organization: Name: EY Global Services Ltd; NAICS: 541211; Name: Ivanhoe Energy Inc; NAICS: 211111; Name: Toronto Stock Exchange; NAICS: 523210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656304877
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656304877?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Cabot Oil Slashes Capital Budget, Production Guidance For 2015; Energy company swings to quarterly loss amid plunging oil prices
Author: Dulaney, Chelsey
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
Cabot Oil & Gas Corp. on Friday slashed its capital budget and pared back its production plans for 2015, as the energy company said it swung to a fourth-quarter loss amid plummeting energy prices.
Full text: Cabot Oil & Gas Corp. on Friday slashed its capital budget and pared back its production plans for 2015, as the energy company said it swung to a fourth-quarter loss amid plummeting energy prices. Cabot had posted stronger earnings in recent years as it benefited from the energy boom and last year announced plans to spend $210 million to boost acreage in the Eagle Ford Shale, a rock formation in south Texas. But oil prices have plunged since June as an oversupply from U.S. energy firms has flooded the global market. Oil prices fluctuated Friday and were headed for their first weekly loss in a month after data showed U.S. oil supplies were at an 80-year high. Cabot said it has cut its 2015 capital budget to $900 million from the $1.53 billion to $1.6 billion it said it expected to spend in October. The Houston company also pared back its expected production growth to 10% to 18% from its previous guidance of 20% to 30% growth. For the quarter ended Dec. 31, Cabot swung to a loss of $221.8 million, or 54 cents a share, from a profit of $77.9 million, or 19 cents a share, a year earlier. The latest quarter's results included a $771 million write-down of some of Cabot's oil and gas properties, primarily in East Texas. The company said it has decided not to pursue further activity in the areas in light of the current price environment. Excluding the impairment charge and other items, per-share earnings were 23 cents. Revenue grew 26.8% to $618 million. Analysts polled by Thomson Reuters had expected earnings of 22 cents per share on revenue of $550.4 million. Cabot's natural-gas price realizations, including the effect of hedges, were $2.96 per thousand cubic feet in the quarter, down 14% from the fourth quarter of 2013. Oil price realizations, including the effect of hedges, were $72.35 per barrel, down 24% from a year earlier. Production volume rose to 151.9 billion cubic feet equivalent, an increase of 25% over last year's comparable quarter. Shares of Cabot, inactive premarket, are down about 29.5% in the last year. Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com Credit: By Chelsey Dulaney
Subject: Financial performance; Petroleum industry; Stock prices; Energy economics; Natural gas
Location: United States--US East Texas
Company / organization: Name: Thomson Reuters; NAICS: 511110, 511140; Name: Cabot Oil & Gas Corp; NAICS: 211111
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656305705
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
U.S. Oil-Rig Count Falls; Rig count fell by 37 to 1019, the lowest in years
Author: Chen, Angela
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
The U.S. oil-rig count fell by 37 to 1019 in the latest week, according to Baker Hughes Inc. Oil prices spiked earlier this month after Baker Hughes reported that the U.S. oil rig count had dropped to a two-year low of 1,223.
Full text: The U.S. oil-rig count fell by 37 to 1019 in the latest week, according to Baker Hughes Inc. Oil prices spiked earlier this month after Baker Hughes reported that the U.S. oil rig count had dropped to a two-year low of 1,223. This week, the number nearly dropped below 1,000. Oil rigs were last below 1,000 in June 2011. Just five months ago, there were 1,609. Oil futures fell 1.2% to $50.54 in Friday trading. Gas rigs were down 11 to 289 this week. The U.S. offshore rig count is at 54, up two rigs from last week and down three from the same period in the year-earlier period. For all rigs, including natural gas, the week's drop was 48 to 1310. Compared with a year ago, this week's down is down 461 from 1,771. Write to Angela Chen at angela.chen@dowjones.com Credit: By Angela Chen
Subject: Petroleum industry; Oil service industry
Location: United States--US
Company / organization: Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656409233
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656409233?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Enbridge Considering New Crude Pipeline to Eastern Gulf Coast; Company says U.S. Gulf is becoming more of a competitive market for Canadian oil
Author: Dawson, Chester
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]20 Feb 2015: n/a.
Abstract:
The expanded pipeline access comes as some Canadian oil sands producers have stopped shipments by rail to the Gulf, citing the higher cost of crude by rail compared with pipelines and the recent drop in global crude oil prices, which has compressed their profit margins.
Full text: CALGARY, Alberta--Enbridge Inc. said it is considering opening a new route to bring crude oil from western Canada and North Dakota to U.S. Gulf Coast refiners, and may do so by partially converting an existing natural-gas pipeline. The project was originally announced in early 2013 with a planned startup date this year. That would have repurposed existing infrastructure to connect the company's Flanagan South pipeline, which ends at a storage hub in Cushing, Okla., with the eastern Gulf Coast. Enbridge wasn't able to secure commitments with shippers two years ago, but believes that now there may be more demand for such a pipeline due to increased interest in Gulf Coast refineries, said Guy Jarvis, the company's senior executive in charge of liquids pipelines business, on a conference call Friday. "The U.S. Gulf Coast is kind of reasserting itself as a very competitive market for Canadian crude [so] we've gone back to the drawing board, so to speak," Mr. Jarvis said, adding that "at this stage, it's still pretty conceptual." In 2013, Enbridge, along with partners Energy Transfer Partners LP and Energy Transfer Equity LP, said the project would convert segments of Trunkline Gas Co.'s natural-gas pipeline to bring as much as 660,000 barrels of oil from the Patoka, Ill., storage hub to the eastern Gulf market via the crude-oil hub at St. James, La. It's unclear if the project would involve the same routing or partners. "There's nothing secured. We're looking at opportunities," Enbridge spokesman Glen Whelan said after the call. If Enbridge moves forward, the project would become the third pipeline to bring large amounts of Canadian and North Dakotan oil from the Midwest to the U.S. refining hub along the Gulf Coast, joining Enterprise Products Partners' Seaway Twin pipeline, which also links to Enbridge's Flanagan South, and TransCanada Corp.'s Keystone XL. The southern leg of the KXL went into service a year ago and the expanded Seaway began shipments in December. The expanded pipeline access comes as some Canadian oil sands producers have stopped shipments by rail to the Gulf, citing the higher cost of crude by rail compared with pipelines and the recent drop in global crude oil prices, which has compressed their profit margins. U.S. and Canadian oil production has skyrocketed in recent years amid advances in drilling methods that have unlocked crude trapped in shale rock formations. The increase led to distribution bottlenecks and severe discounting of Canadian oil, but new pipeline access to the Gulf Coast has helped to narrow the pricing gap between U.S. and Canadian crudes. Write to Chester Dawson at chester.dawson@wsj.com Credit: By Chester Dawson
Subject: Pipelines; Petroleum industry; Crude oil; Crude oil prices; Petroleum production; Natural gas utilities
Location: Canada North Dakota
Company / organization: Name: TransCanada Corp; NAICS: 486210; Name: Trunkline Gas Co; NAICS: 486210, 221210; Name: Energy Transfer Equity LP; NAICS: 486210
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 20, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656427257
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Retreats on U.S. Supply Highs; U.S. rig count drops, but concerns about oversupply persist
Author: Puko, Timothy
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Feb 2015: n/a.
Abstract:
[...]you see it slowing down, there's always going to be this downward pressure on the market."
Full text: Oil prices fell for a third session in a row, as slowing cuts to rig counts added to losses that had been mounting because of historically high U.S. supplies. The U.S. Energy Information Administration reported Thursday that U.S. crude inventories reached another record last week, a sign cheap prices haven't begun to affect production yet. The rising supplies led to the oil market's first weekly loss in nearly a month. Rig counts kept falling in new data released Friday, but the 37-rig decline was less than half of that registered a week ago. That could be a bearish sign that production won't fall to balance the market as quickly as some had hoped. The day's losses mounted on the news. Light, sweet crude for March delivery, the U.S. benchmark, settled down 82 cents, or 1.6%, to $50.34 a barrel on the New York Mercantile Exchange. The March contract expired at the end of Friday's trading. The more actively traded April contract settled down $1.02 cents, or 2%, at $50.81 a barrel. The front-month April contract for Brent crude settled up one cent, or 0.02%, at $60.22 a barrel on London's ICE Futures exchange. Dean Hazelcorn, a trader at Coquest Inc. in Dallas, said he was surprised prices didn't move more on the news. Randall Collum, an analyst at Genscape Inc., had said earlier in the day that the rig-count cuts tallied by Baker Hughes Inc. likely would slow in the weeks to come. "I have to think it met exactly expectations," Mr. Hazelcorn said. The market "has been so docile." Expiration likely sapped some of the volatility, he added. Others said growing stocks were still pushing a selloff. The EIA said oil inventories grew by 7.7 million barrels last week to 426 million barrels, the highest level for this time of year for at least 80 years. "It's just crazy, these numbers and how it just keeps coming," said Peter Donovan, broker for Liquidity Energy in New York. "Until you see it slowing down, there's always going to be this downward pressure on the market." Oil futures had received a boost from petroleum products, which are surging in part because of weather in the U.S., brokers said. Cold weather boosts demand for heating fuel like diesel, and subzero and subfreezing temperatures are going to be common for most of the country through next week, meteorologists said. Two East Coast refiners also were having problems Friday, including frozen equipment that kept ships from unloading at Delta's Trainer refinery, Reuters reported Friday. March diesel skyrocketed to a two-month high, settling up 11.8 cents, or 6%, at $2.1118 a gallon. Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--rose 1.5% to $1.6407 a gallon. Mr. Collum and others warned that it could be months before the market reduces its oversupply, which analysts estimate at about two million barrels a day. The EIA reported Thursday that U.S. crude production was running at a multiyear high of 9.3 million barrels a day. Other major producers also appear to be ramping up output. Saudi Arabia could be producing as much as 10 million barrels of oil a day, PIRA Energy Group said in a report this past week. The kingdom's output has kept steady in recent months, at about 9.7 million barrels a day, according to Organization of the Petroleum Exporting Countries data. Saudi-led OPEC decided not to cut output last year despite the price rout in an apparent attempt to defend its market share against the booming U.S. shale industry. Georgi Kantchev contributed to this article. Write to Timothy Puko at tim.puko@wsj.com Credit: By Timothy Puko
Subject: Petroleum industry; Crude oil; Prices; Inventory
Location: United States--US
Company / organization: Name: Genscape Inc; NAICS: 511140, 518210; Name: ICE Futures; NAICS: 523210; Name: New York Mercantile Exchange; NAICS: 523210; Name: Baker Hughes Inc; NAICS: 213112, 333132, 333249
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 21, 2015
Section: Markets
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656487400
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656487400?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-21
Database: The Wall Street Journal
Canada Unveils an Oil-Train Safety Tax; Funds would be used for cleanup costs of crude derailments
Author: Vieira, Paul
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]21 Feb 2015: n/a.
Abstract: None available.
Full text: OTTAWA--Canada said it would create a compensation fund to cover the potential costs of oil-train derailments and finance the move with a new levy on crude shippers. The planned fund--first reported by The Wall Street Journal earlier Friday--was one of several new measures Canada unveiled to bolster the safety of a rail system carrying growing volumes of crude. Canada had pledged to hold railways and shippers more accountable after the derailment of a crude-carrying train in Quebec in July 2013 killed 47 people and wiped out the town's core. The Lac-Mégantic accident spurred regulatory changes in the U.S. and Canada--from beefed up emergency-preparedness requirements to new rules governing railcars--while raising concerns about the risks the oil-by-rail boom poses to communities across North America. Those risks were highlighted again in two fiery derailments this past week, in West Virginia and northern Ontario . Neither led to deaths or injuries. Crude shippers will have to pay 1.65 Canadian dollars ($1.32) per metric ton of crude oil carried, Canadian Transport Minister Lisa Raitt said. Canada said it would also mandate minimum insurance coverage levels for railways based on the type and volume of crude they carry. The minimum required insurance for companies carrying more than 1.5 million metric tons of crude annually is C$1 billion--affecting the country's two biggest railroads, Canadian National Railway Co. and Canadian Pacific Railway Ltd. The measures are "an assurance that what needs to be done will be done when it comes to safe transportation," Ms. Raitt said, adding they are meant "to ensure there are sufficient funds available to compensate the victims of accidents, and pay for any clean up required." Spokespeople for CN and CP said the companies were reviewing the announcement. The amount of crude moving by rail in Canada has quadrupled since 2012, and is forecast to more than triple, to 700,000 barrels a day, between now and 2016. Rail has become an attractive option due to a lack of pipeline infrastructure. Canadian transportation officials last year had warned that liability insurance might "not be adequate" in the case of a catastrophic event involving dangerous goods, such as crude. Montreal Maine and Atlantic Railway, which operated the train that derailed in Lac-Mégantic, had C$25 million in coverage. The cleanup tab has been far higher. The Quebec government has said in court documents it expects to spend up to C$409 million for cleanup and rebuilding purposes, while the Canadian government has so far contributed C$155 million. Greg Stringham, a vice president at the Canadian Association of Petroleum Producers, said the crude levy for rail is similar to a regime Canada has in place for marine transportation of oil. He said the levy adds costs for producers already dealing with the more than 50% plunge in oil prices since last June, and amounts to about 25 cents a barrel. "We know this levy needs to be in place in order to be seen and be documented as a safe way of moving the commodity," he said. "It is an additional cost but it is being collected over time." Canada said the levy will stay in place until the compensation fund reaches C$250 million. The Railway Association of Canada, a lobby group, said the industry supports the idea of having more stakeholders share in the costs associated with rail accidents involving dangerous goods, "but the regime can be improved by including other dangerous goods in the compensation fund right away." CAPP's Mr. Stringham echoed that view. Ms. Raitt said shippers of other dangerous goods could be subject to a levy at a later date. Shipping crude by rail is costlier than via pipelines. The compressed profit margins from lower oil prices have prompted some Canadian oil companies--including Cenovus Energy Inc.--to halt crude-by-rail shipments to the Gulf of Mexico. Most Canadian crude is shipped via pipeline, and crude-by-rail has been seen as a stopgap measure pending the completion of more pipelines. Expanded pipeline access in recent months to the U.S. Gulf Coast has eased pressure on bottlenecks at key storage hubs such as Cushing, Oklahoma, and narrowed a discount between Canadian and U.S. crudes. Chester Dawson contributed to this article. Write to Paul Vieira at paul.vieira@wsj.com Credit: By Paul Vieira
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 21, 2015
Section: Business
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656487732
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Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: U.S. Issues First Rules Governing Arctic Oil Drilling
Author: Harder, Amy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Feb 2015: B.4.
Abstract:
According to Interior Department data released in 2011, the federal waters in the Beaufort and Chukchi seas hold 22 billion barrels of technically recoverable oil and 93 trillion cubic feet of recoverable natural gas.
Full text: WASHINGTON -- The Interior Department on Friday proposed the first-ever federal regulations for oil and natural-gas drilling in the Arctic Ocean requiring companies to prepare extensive contingency plans that could swiftly respond to and contain an oil spill in the region's frigid, isolated waters. No energy company currently is drilling in the U.S. portion of the Arctic Ocean. Royal Dutch Shell has plans to begin drilling this summer in the Chukchi and Beaufort seas, in what is currently the company's largest, most high-profile and expensive exploration project. ConocoPhillips and Statoil also own leases in the Arctic, though neither company has immediate plans to drill there. The rules would put in place most of what Shell has already committed to do this summer, including having available an additional rig that could drill a relief well in the case the company loses control of a well. The regulation technically won't apply to Shell's plans to drill this summer, since it won't be final by then and would only apply to future drilling operations. Many parts of the proposed rule stem from an agreement between Shell and the Interior Department following missteps the London-based company made in 2012. That summer, Shell's first, and so far only, drilling attempt since it began its Arctic pursuit in 2007 failed amid bad weather and mechanical failures. The region's cold climate provides a window -- generally from July to October -- when companies can drill safely given the icy conditions the rest of the year. In addition to requiring another rig on standby nearby, the regulations would require companies to construct and test a containment dome in case of a spill and submit region-specific response plans. The American Petroleum Institute criticized the need for an additional rig as "unnecessarily burdensome." Such requirements are also required for drilling in the Gulf of Mexico, but resources are often pooled among the many operators in that region. Given the Arctic's remoteness and absence of current drilling activity, the cost of the regulation could be higher for companies seeking to drill there. "For a single operator, that poses a heavier financial challenge to provide that capability," said Brian Salerno, who directs the Interior Department's Bureau of Safety and Environmental Enforcement. The proposed regulations, which must go through a 60-day comment period before becoming final, would apply only to exploratory wells. An Interior Department spokeswoman would not say when the regulations would become final. Mr. Salerno said the department would eventually pursue a rule governing production, though that isn't expected to occur for several years. According to Interior Department data released in 2011, the federal waters in the Beaufort and Chukchi seas hold 22 billion barrels of technically recoverable oil and 93 trillion cubic feet of recoverable natural gas. Shell plans to invest $1 billion in its Arctic project this year, adding to the $6 billion the company has already spent on exploration drilling offshore Alaska in the past eight years. "Of paramount concern in all of our operations is safety and environmental protection," Shell spokesman Curtis Smith said. "We support regulations that further these imperatives in the Arctic, provided they are clear, consistent and well-reasoned." Credit: By Amy Harder
Subject: Proposals; Federal regulation; Offshore drilling
Location: United States--US Arctic Ocean
Company / organization: Name: Department of the Interior; NAICS: 924120
Classification: 9190: United States; 4310: Regulation; 8510: Petroleum industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.4
Publication year: 2015
Publication date: Feb 21, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656549474
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656549474?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission .
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Mideast Unrest Fuels Defense Boom --- On edge, Persian Gulf monarchies step up military spending even as oil revenue slows
Author: Wall, Robert; Jones, Rory
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Feb 2015: B.10.
Abstract:
Executives from U.S. and European defense contractors, as well as competitors such as China National Aero-Technology Import & Export Corp., and Brazil's Embraer SA, are gathering in Abu Dhabi this weekend to show off their wares at the International Defence & Exhibition Conference, a U.A.E. trade show that has grown in importance in recent years as Mideast buyers open their wallets.
Full text: ABU DHABI -- Facing a host of military threats, the oil-rich monarchies of the Persian Gulf have been boosting outlays for defense equipment -- providing a shot in the arm for Western arms suppliers facing government cutbacks in much of the rest of the world. Lower oil prices may eventually damp the buying binge, as they did during a price slump in 1999. But for now, weapon sales to Middle East buyers, chief among them Saudi Arabia, are booming. Riyadh spent $80.8 billion on defense in 2014, up 43% from just two years earlier and trailing only the U.S. and China, according to the International Institute for Strategic Studies. The four biggest Persian Gulf defense customers -- Saudi Arabia, the United Arab Emirates, Oman and Qatar -- spent a total $109.9 billion last year, up 44% from 2012. Fueling demand from the Arab monarchies are new military challenges in the region, including the threat posed by Islamic State and other militant groups, and continuing concerns about Iran's regional ambitions. "The pressure to spend is much higher than it was in the late 1990s," said Pieter Wezeman, a senior researcher at the Stockholm International Peace Research Institute. Middle East countries "see so many different threats coming from so many directions," he said. Jordan and Bahrain, as well as the U.A.E., Qatar, and Saudi Arabia, have conducted airstrikes against Islamic State positions in Syria, sometimes in partnership with U.S. forces. Egypt recently joined the fray, sending war planes against Islamic State elements in Libya after a video purported to show the execution of more than a dozen Egyptians by the group there. Executives from U.S. and European defense contractors, as well as competitors such as China National Aero-Technology Import & Export Corp., and Brazil's Embraer SA, are gathering in Abu Dhabi this weekend to show off their wares at the International Defence & Exhibition Conference, a U.A.E. trade show that has grown in importance in recent years as Mideast buyers open their wallets. The new threats have piqued interest in equipment beyond the usual shopping list of fighter jets, tanks and guns. Mideast customers are looking for ways to counter Internet-savvy militants, or track groups' disparate factions on the ground. They are also buying more sophisticated antimissile systems to counter Iran. Last year, Saudi Arabia put in an order for as many as eight Spydr aircraft, a relatively small spy plane made by L-3 Communications Holding Inc. The U.S. used a similar system in Afghanistan to track Taliban insurgents and find roadside bombs. "The demand for that platform in the region is great given what's going on," said Michael T. Strianese, chief executive of New York-based L-3. Interest in cybersecurity tools and domestic security equipment also is rising as states look to counter insurgent threats. European aviation and defense giant Airbus GroupNV said last month it won a contract from Lebanon's interior ministry for a secure radio system for one of the country's intelligence agencies. "The cyberthreat is real and growing," said Danny E. Sebright, president of the U.A.E.-U.S. Business Council and a former U.S. Defense Department official. "Key Middle East countries are working feverishly to better protect themselves in the future." For many Mideast buyers, the drop in the price of oil could moderate their appetite. "Export orders, particularly from Saudi and Bahrain, may not come through as expected in 2015," said Rami Myerson, a defense company analyst at Investec. Still, Saudi Arabia has a war chest brimming with oil revenue that should help insulate it from a prolonged price slump. Other Gulf producers don't have the same cushion, but so far are showing few signs of scrimping on defense. Buyers are still looking to bolster national security "in spite of any volatility in world oil markets and price levels," said Marillyn Hewson, chief executive of Lockheed Martin Corp., the world's biggest arms maker by sales, on a recent earnings call following a trip to the Middle East. For some customers in the region, cheaper oil is a boon. Egypt, a big energy importer, should benefit from lower outlays on subsidized fuel, for instance. This week, Cairo agreed to buy 24 Rafale combat jets, built by Dassault Aviation SA, and a warship in a deal with France valued at more than $5 billion. Credit: By Robert Wall and Rory Jones
Subject: Suppliers; Defense spending; Military sales
Location: Europe United States--US Persian Gulf states Middle East
Classification: 9178: Middle East; 1120: Economic policy & planning; 8680: Transportation equipment industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.10
Publication year: 2015
Publication date: Feb 21, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656549511
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656549511?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
No Relief For Falling Crude Oil
Author: Puko, Timothy
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Feb 2015: B.5.
Abstract:
[...]you see it slowing down, there's always going to be this downward pressure on the market."
Full text: U.S. oil prices fell for a third session in a row, as slowing cuts to rig counts added to losses that had been mounting because of historically high U.S. supplies. The U.S. Energy Information Administration reported Thursday that U.S. crude inventories reached another record last week, a sign cheap prices haven't begun to affect production yet. The rising supplies led to the oil market's first weekly loss in nearly a month. Rig counts kept falling in new data released Friday, but the 37-rig decline was less than half of that registered a week ago. That could be a bearish sign that production won't fall to balance the market as quickly as some had hoped. The day's losses mounted on the news. Light, sweet crude for March delivery, the U.S. benchmark, settled down 82 cents, or 1.6%, to $50.34 a barrel on the New York Mercantile Exchange. The March contract expired at the end of Friday's trading. The more actively traded April contract settled down $1.02, or 2%, at $50.81 a barrel. The front-month April contract for Brent crude settled up one cent, or 0.02%, at $60.22 a barrel on London's ICE Futures exchange. Dean Hazelcorn, a trader at Coquest Inc. in Dallas, said he was surprised prices didn't move more on the news. Randall Collum, an analyst at Genscape Inc., had said earlier in the day that the rig-count cuts tallied by Baker Hughes Inc. likely would slow in the weeks to come. "I have to think it met exactly expectations," Mr. Hazelcorn said. The market "has been so docile." Expiration likely sapped some of the volatility, he added. Others said growing stocks were still pushing a selloff. The EIA said oil inventories grew by 7.7 million barrels last week to 426 million barrels, the highest level for this time of year for at least 80 years. "It's just crazy, these numbers and how it just keeps coming," said Peter Donovan, broker for Liquidity Energy in New York. "Until you see it slowing down, there's always going to be this downward pressure on the market." Oil futures had received a boost from petroleum products, which are surging in part because of weather in the U.S., brokers said. Cold weather boosts demand for heating fuel like diesel, and subzero and subfreezing temperatures are going to be common for most of the country through next week, meteorologists said. Two East Coast refiners also were having problems Friday, including frozen equipment that kept ships from unloading at Delta's Trainer refinery, Reuters reported. March diesel skyrocketed to a two-month high, settling up 11.8 cents, or 5.9%, at $2.1118 a gallon. Nymex reformulated gasoline blendstock for March -- the benchmark gasoline contract -- rose 1.5% to $1.6407 a gallon. Mr. Collum and others warned that it could be months before the market reduces its oversupply, which analysts estimate at about two million barrels a day. The EIA reported Thursday that U.S. crude production was running at a multiyear high of 9.3 million barrels a day. Other major producers also appear to be ramping up output. Saudi Arabia could be producing as much as 10 million barrels of oil a day, PIRA Energy Group said in a report this past week. The kingdom's output has kept steady in recent months, at about 9.7 million barrels a day, according to Organization of the Petroleum Exporting Countries data. Saudi-led OPEC decided not to cut output last year despite the price rout in an apparent attempt to defend its market share against the booming U.S. shale industry. --- Georgi Kantchev contributed to this article. Credit: By Timothy Puko
Subject: Futures trading; Crude oil prices
Location: United States--US
Classification: 9190: United States; 3400: Investment analysis & personal finance
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.5
Publication year: 2015
Publication date: Feb 21, 2015
column: Commodities Report
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656549933
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656549933?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Business News: Canada Unveils An Oil Safety Tax
Author: Vieira, Paul
Publication info: Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]21 Feb 2015: B.3.
Abstract:
The minimum required insurance for companies carrying more than 1.5 million metric tons of crude annually is C$1 billion-affecting the country's two biggest railroads, Canadian National Railway Co. and Canadian Pacific Railway Ltd. The measures are "an assurance that what needs to be done will be done when it comes to safe transportation," Ms. Raitt said, adding they are meant "to ensure there are sufficient funds available to compensate the victims of accidents, and pay for any clean up required."
Full text: OTTAWA -- Canada said it would create a compensation fund to cover the potential costs of oil-train derailments and finance the move with a new levy on crude shippers. The planned fund -- first reported by The Wall Street Journal earlier Friday -- was one of several new measures Canada unveiled to bolster the safety of a rail system carrying growing volumes of crude. Canada had pledged to hold railways and shippers more accountable after the derailment of a crude-carrying train in Quebec in July 2013 killed 47 people and wiped out the town's core. The Lac-Megantic accident spurred regulatory changes in the U.S. and Canada -- from beefed up emergency-preparedness requirements to new rules governing railcars -- while raising concerns about the risks the oil-by-rail boom poses to communities across North America. Those risks were highlighted again in two fiery derailments this past week, in West Virginia and northern Ontario. Neither led to deaths or injuries. Crude shippers will have to pay 1.65 Canadian dollars ($1.32) per metric ton of crude oil carried, Canadian Transport Minister Lisa Raitt said. Canada said it would also mandate minimum insurance coverage levels for railways based on the type and volume of dangerous goods they carry. The minimum required insurance for companies carrying more than 1.5 million metric tons of crude annually is C$1 billion-affecting the country's two biggest railroads, Canadian National Railway Co. and Canadian Pacific Railway Ltd. The measures are "an assurance that what needs to be done will be done when it comes to safe transportation," Ms. Raitt said, adding they are meant "to ensure there are sufficient funds available to compensate the victims of accidents, and pay for any clean up required." Spokespeople for CN and CP said the companies were reviewing the announcement. The amount of crude moving by rail in Canada has quadrupled since 2012, and is forecast to more than triple, to 700,000 barrels a day, between now and 2016. Rail has become an attractive option due to a lack of pipeline infrastructure. Canadian transportation officials last year had warned that liability insurance might "not be adequate" in the case of a catastrophic event involving dangerous goods, such as crude. Montreal Maine and Atlantic Railway, which operated the train that derailed in Lac-Megantic, had C$25 million in coverage. The cleanup tab has been far higher. The Quebec government has said in court documents it expects to spend up to C$409 million for cleanup and rebuilding purposes, while the Canadian government has so far contributed C$155 million. Greg Stringham, a vice president at the Canadian Association of Petroleum Producers, said the crude levy for rail is similar to a regime Canada has in place for marine transportation of oil. He said the levy adds costs for producers already dealing with the more than 50% plunge in oil prices since June, and amounts to about 25 cents a barrel. "We know this levy needs to be in place in order to be seen and be documented as a safe way of moving the commodity," he said. "It is an additional cost but it is being collected over time." Canada said the levy will stay in place until the compensation fund reaches C$250 million. The Railway Association of Canada, a lobby group, said the industry supports the idea of having more stakeholders share in the costs associated with rail accidents involving dangerous goods, "but the regime can be improved by including other dangerous goods in the compensation fund right away." CAPP's Mr. Stringham echoed that view. Ms. Raitt said shippers of other dangerous goods could be subject to a levy at a later date. Shipping crude by rail is costlier than via pipelines. The compressed profit margins from lower oil prices have prompted some Canadian oil companies -- including Cenovus Energy Inc. -- to halt crude-by-rail shipments to the Gulf of Mexico. Most Canadian crude is shipped via pipeline, and crude-by-rail has been seen as a stopgap measure pending the completion of more pipelines. --- Chester Dawson contributed to this article. Credit: By Paul Vieira
Subject: Compensation; Crude oil; Railroad accidents & safety; Taxes
Location: Canada
Classification: 9172: Canada; 4200: Taxation; 8350: Transportation & travel industry
Publication title: Wall Street Journal, Eastern edition; New York, N.Y.
Pages: B.3
Publication year: 2015
Publication date: Feb 21, 2015
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics--Banking And Finance
ISSN: 00999660
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1656550246
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1656550246?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
Oil Flows Resume at Libya's Largest Field; Resumption Comes One Week After Pipeline Was Blown Up
Author: Faucon, Benoît
Publication info: Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]22 Feb 2015: n/a.
Abstract: None available.
Full text: Libya's largest oil field and a key oil port were brought back online Sunday, though attacks by Islamic extremists have continued elsewhere in the war-torn nation. The resumption of oil flows from the Sarir oil field, which pumps about two-thirds of the country's remaining output, was a rare piece of good news following renewed fighting in Libya's civil war and a string of attacks by Islamic State militants. A pipeline carrying 185,000 barrels a day from Sarir to the Hariga terminal in eastern Libya was blown up about a week ago by unknown militants. "The pipeline was repaired. Production restarted today" at 9 a.m. Libyan time, a spokesman for the state-owned National Oil Co. told The Wall Street Journal. No group has claimed responsibility for the sabotage but Libyan oil officials have blamed Islamic State, which has made headway in the North African country after capturing swaths of Iraq and Syria. Separately, operations restarted at the Zueitina terminal in eastern Libya, Libyan officials said late Sunday. The terminal, which had been shut for about a year for security concerns, was scheduled to soon start loading a tanker carrying 600,000 barrels when the weather allows, they said Sunday. Islamic State's emergence in Libya has exacerbated existing unrest in the country, where an internationally recognized government in the east is fighting an Islamist militia called Dawn for control. In recent weeks, Islamic State has stormed a French-Libyan oil field, attacked a hotel in Tripoli, and beheaded 21 Egyptian Christians. On Friday, the group said it had carried out suicide bombings that killed more than 40 people in the eastern town of Qubbah, in retaliation for Egyptian air raids against its bases. Attacks continued over the weekend. On Sunday, the group claimed a rocket attack the previous day on the Labraq airport in Eastern Libya, which is used by the government to carry out air raids. Recent violence has taken a toll on Libya's oil industry. Before the pipeline from Sarir was shut down, Libya's production had collapsed to 325,000 barrels a day, a decline of almost two-thirds since October. Islamic State's Tripoli branch also said it was responsible for a car bombing at the vacant residence of Iran's ambassador to Libya and released a picture of the explosion. The claims were made by a Twitter account where Islamic State's Libyan franchise has taken credit for previous terrorist acts by publishing videos and pictures of attackers and the killing of the Egyptians. The pipeline explosion hadn't completely stopped exports. The Hariga terminal had been exporting oil in storage in recent days. "The shipping program will continue as normal," the spokesman said. Pictures posted on Sarir's official Facebookpage showed explosive devices uncovered along the pipeline and welding to repair the facility. Write to Benoit Faucon at benoit.faucon@wsj.com Credit: By Benoît Faucon
Publication title: Wall Street Journal (Online); New York, N.Y.
Pages: n/a
Publication year: 2015
Publication date: Feb 22, 2015
Section: World
Publisher: Dow Jones & Company Inc
Place of publication: New York, N.Y.
Country of publication: United States, New York, N.Y.
Publication subject: Business And Economics
Source type: Newspapers
Language of publication: English
Document type: News
ProQuest document ID: 1657189086
Document URL: https://login.ezproxy.uta.edu/login?url=https://search-proquest-com.ezproxy.uta.edu/docview/1657189086?accountid=7117
Copyright: (c) 2015 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.
Last updated: 2017-11-22
Database: The Wall Street Journal
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